{"id":3463,"date":"2023-02-17T21:48:00","date_gmt":"2023-02-18T03:48:00","guid":{"rendered":"https:\/\/patents.harnessip.com\/?p=3463"},"modified":"2023-02-18T19:58:51","modified_gmt":"2023-02-19T01:58:51","slug":"a-court-can-only-enjoin-public-accusations-of-infringement-if-they-are-objectively-baseless","status":"publish","type":"post","link":"https:\/\/patents.harnessip.com\/?p=3463","title":{"rendered":"A Court Can Only Enjoin Public Accusations of Infringement if They Are Objectively Baseless"},"content":{"rendered":"\n

In Lite-Netics, LLC v. Nu Tsai Capital, LLC, [2023-1146]<\/a> (February 17, 2023), the Federal Circuit vacated a preliminary injunction against Lite-Netics patent-related speech, holding that the district court abused its discretion.<\/p>\n\n\n\n

Lite-Netics brought a patent-infringement action against HBL, and sent two notices,
one before filing suit and one after, to its customers (some of which were also HBL customers), informing them of allegedly infringing competitors in the market and stating Lite-Netics\u2019s intent to enforce its patent rights. HBL counterclaimed for several state-law torts, and moved for a temporary restraining order and a preliminary injunction, based on two of the state law counterclaims, which the district court granted.<\/p>\n\n\n\n

Lite-Netics owns multiple patents on magnetic holiday string lights. HBL, a former customer of Lite-Netics, also sells holiday string lights. <\/p>\n\n\n\n

Lite-Netics owns multiple patents on magnetic holiday string lights. HBL, a former customer of Lite-Netics, also sells holiday string lights. Lite-Netics send a notice to the trade that Lite-Netics\u2019s magnetic string lights were protected by U.S. Patent Nos. 7,549,779 and 8,128,264; that other companies were attempting to \u201ccopy\u201d Lite-Netics\u2019s patented products; that Lite-Netics had filed a patent infringement lawsuit against HBL to stop it from making and selling infringing products; and that Lite-Netics was also considering including any known company using or reselling the HBL products as co-defendants in this lawsuit.<\/p>\n\n\n\n

The district court addressed (1) the likelihood of HBL\u2019s success on the merits of its tortious-interference and defamation claims; (2) the likelihood of irreparable injury
to HBL without the injunction; (3) the balance of equities; and (4) the public interest. <\/p>\n\n\n\n

In considering the first factor, the court recognized that state-law tort claims based on the communication of patent rights, such as HBL\u2019s tortious-interference and defamation claims, \u201care preempted by federal patent laws, unless the claimant can show that the patent holder acted in bad faith.\u201d However the district court concluded that HBL\u2019s state-law tort claims were not preempted here, centrally because it held that Lite-Netics\u2019s infringement allegations were so clearly meritless that their assertion was in bad faith. On that basis, the court ruled that HBL would likely succeed on its tortious-interference and defamation claims
and that the preliminary injunction should issue, because the non-merits preliminary-injunction considerations favored issuance.<\/p>\n\n\n\n

The Federal Circuit has held that federal patent law preempts state law tort liability for a patentholder\u2019s good faith conduct in communications asserting infringement of its patent and
warning about potential litigation. Thus, the Federal Circuit said that HBL\u2019s state-law claims
here thus can survive federal preemption only to the extent that those claims are based on a showing of \u2018bad faith\u2019 action in asserting infringement. The requirement of a showing of bad faith as prerequisite to applying state tort law to speech about infringement rests partly on First Amendment principles. Thus, a bad faith standard cannot be satisfied in the absence of a showing that the claims asserted were objectively baseless, and a patent-infringement allegation is objectively baseless only if no reasonable litigant could realistically expect
success on the merits.<\/p>\n\n\n\n

Lite-Netics argued on appeal that the district court erred in finding its infringement allegations concerning the \u2019779 patent, and its application to both accused products, to be objectively baseless, and the Federal Circuit agreed. Because there was an objectively reasonable basis for many of Lite-Netics\u2019s infringement allegations, the district court abused its discretion in finding that Lite-Netics could not have \u201crealistically expect[ed] success on the merits\u201d and, therefore, acted in bad faith.<\/p>\n\n\n\n

The Federal Circuit noted that the preliminary injunction was to a large extent based on three legal conclusions with respect to Lite-Netics\u2019s assertion of the \u2019779 patent, but concluded that Lite-Netics\u2019s position on all three of those disputes has not been shown, at this stage of the litigation, namely before full claim-construction proceedings or possible expert reports on infringement), to be objectively baseless. That conclusion requires vacatur of the preliminary injunction, without finally resolving the underlying disputes about claim construction, prosecution history estoppel, or other issues.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Lite-Netics, LLC v. Nu Tsai Capital, LLC, [2023-1146] (February 17, 2023), the Federal Circuit vacated a preliminary injunction against Lite-Netics patent-related speech, holding that the district court abused its discretion. Lite-Netics brought a patent-infringement action against HBL, and sent … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[110],"tags":[],"class_list":["post-3463","post","type-post","status-publish","format-standard","hentry","category-unfair-competition"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/3463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3463"}],"version-history":[{"count":1,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/3463\/revisions"}],"predecessor-version":[{"id":3464,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/3463\/revisions\/3464"}],"wp:attachment":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}