The DOJ and PTO’s trial balloon on patent injunctions

Almost two decades ago the Supreme Court handed down what has turned out to be one of its most significant patent decisions of this century: eBay v. MercExchange.  The eBay case has had the effect of precluding prevailing patentees from being able to expect or rely upon obtaining an injunction against an adjudged infringer.  And it has led to the era of “efficient infringement,” creating circumstances where it makes economic sense to infringe and pay the price (in patentee lost profits) for doing so rather than obtaining a license.  One of the most significant targets of this stratagem have been so-called “non-practicing entities,” usually sole inventors, small companies, and universities. These parties were castigated (unfairly) at the turn of the century (perhaps creating the climate for eBay) as being “patent trolls” (particularly in high tech industries). The argument against this group is that they could not be irreparably harmed because royalty payments would make them whole (if they deserved recompense at all) and thus failed one prong of the (traditional) four-part test for obtaining an injunction revitalized in patent cases by the Court’s eBay decision.

There have been efforts in Congress to rectify this situation, most notably the RESTORE Patent Rights Act of 2025 (and unsuccessfully 2024) which has been introduced in the past Congress and the current one (as H.R. 1574 and S. 708). The prospects for enactment are murky, particularly in view of the political power of the beneficiaries of the status quo. Recently there are indications that the current administration has done a rethink about this issue, the evidence of which is the filing of a Statement of Interest under 28 U.S.C. § 517 by the Department of Justice Antitrust Division (DOJ) and the Patent and Trademark Office (PTO) in Radian Memory Systems LLC v. Samsung Electronics Co., Ltd. before the U.S. District Court for the Eastern District of Texas, Marshall Division. This case arose in the context of plaintiff’s allegations of patent infringement (also sounding in anticompetitive activity but not antitrust, curiously) and that a product standard developed by a private consortium that includes several large firms who practice the standardized technology had exercised monopsony power (see, Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 549 U.S. 312, 322 (2007)) to preclude Radian’s participation in the marketplace.  The DOJ and PTO filed their Statement in support of Radian’s motion for preliminary injunction regarding its technology for improved flash solid-state drives, asserting irreparable harm for loss of market opportunities and market position as a technology pioneer. Relevant to the Statement, Samsung has opposed Radian’s preliminary injunction motion, inter alia, on the grounds that as a non-practicing entity Radian can be made whole by money damages and thus will not be irreparably harmed.

In their Statement, the DOJ and PTO focused on the second of the conventional requirements for preliminary injunctive relief: “(1) a likelihood of success on the merits; (2) a likelihood of irreparable harm (with no adequate remedy at law); (3) the balance of the hardships is in favor of the party seeking injunction; and (4) that an injunction is in the public interest,” citing Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The Statement acknowledges the Supreme Court’s holding in eBay rejecting the Federal Circuit’s “general rule” that “an injunction will issue upon a finding of infringement and validity.” In practice, according to the Statement, as a consequence of eBay, the Federal Circuit has found irreparable harm in instances where “patents are hard to value and damages are difficult to calculate.”

Regarding irreparable harm and determinations thereof, the Statement then sets forth arguments why patents can be difficult to value as a unique asset in the context of decisions in several Circuit Courts of Appeal about the difficulties in assessing value.  Completing the litany of what the Federal Circuit has and has not done in this regard, the Statement asserts that “the Federal Circuit has not held that an ongoing royalty can never be difficult to calculate or that it meant there could be no irreparable harm,” citing ActiveVideo Networks, Inc. v. Verizon Communs., Inc., 694 F.3d 1312, 1338 (Fed. Cir. 2012) and that “the prospect of an injunction can facilitate negotiation among the parties,” citing In re Mahurkar Double Lumen Hemodialysis Catheter Pat. Litig., 831 F. Supp. 1354, 1397 (N.D. Ill. 1993) (Circuit Court Judge Easterbrook, sitting by designation).

The Statement gets to the crux of the difficulties created by eBay when it asserts that “[t]he possibility of an injunction also helps prevent potential licensees from viewing infringement as economically efficient, which would further erode the patent’s value and the patentee’s control over it,” crediting law review articles by Kristen Osenga (“Efficient” Infringement and Other Lies, 52 SETON Hall L. Rev. 1085 (2022)) and Adam Mossoff (The Injunction Function: How and Why Courts Secure Property Rights in Patents, 96 NOTRE DAME L. REV. 1581 (2021)) for this insight as well as pre-eBay decisions from the Federal Circuit; see, Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1456-57 (Fed. Cir. 1988). This situation affects the judicial system negatively as well, according to the Statement, which notes that “the chances any company will take a license are significantly reduced until a court renders a final verdict, thereby reducing incentives to settle and increasing the number and durations of cases, while also inflicting additional cost on the patent owner simply to get to that result.”

The DOJ and PTO clarifies that it is not advocating for a particular outcome in this case but that the district court should consider, in assessing the irreparable harm prong of the preliminary injunction test, the difficulties of calculating damages in ongoing litigation as well as the effect (without having an injunction) of Radian’s loss of control of its patent.

While the eBay case re-established the High Court’s supremacy over patent law, it is unlikely that the Justices considered the unexpected consequences of this decision and other such decisions. The DOJ/PTO Statement is at best a toe in the water or a trial balloon regarding administrative reactions to these consequences; Congress is where any lasting change is to be sought no matter how unlikely or protracted that process proves to be.