Reebok Intern. Ltd. v. J. Baker, Inc., 94-1145

• Citation: 31 USPQ2d 1781,32 F.3d 1552
• Decision Date: 15 August 1994
• Docket Number: No. 94-1145,94-1145
• Parties: REEBOK INTERNATIONAL LTD., Plaintiff-Appellant, v. J. BAKER, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1552

32 F.3d 1552

31 U.S.P.Q.2d 1781

REEBOK INTERNATIONAL LTD., Plaintiff-Appellant, v. J. BAKER, INC., Defendant-Appellee.

No. 94-1145.

United States Court of Appeals Federal Circuit.

Aug. 15, 1994.

David K.S. Cornwell, Sterne, Kessler, Goldstein & Fox, Washington, DC, argued, for plaintiff-appellant. With him on the brief were Tracy-Gene G. Durkin and William C. Allison, V.

David Wolf, Wolf, Greenfield & Sacks, P.C., Boston, MA, argued, for defendant-appellee. Of counsel was Donald R. Steinberg.

Before MICHEL and LOURIE, Circuit Judges, and CARMAN, Judge. ^*

MICHEL, Circuit Judge.

Reebok International Ltd. (Reebok) appeals the December 29, 1993 order issued by the United States District Court for the District of Massachusetts denying Reebok's motion for a preliminary injunction. Because the district court did not clearly err in finding that Reebok will not suffer irreparable harm due to the denial and did not abuse its discretion in denying the motion, we affirm. Although the court erred by not making findings on likelihood of success while still denying Reebok the presumption of irreparable harm it may have been entitled to had such findings been made, on this record that error was harmless. Defendant's evidence was sufficient to rebut such a presumption.

BACKGROUND

On December 7, 1993, design patent, U.S. Patent No. Des. 341,931 (the '931 patent) for "Shoe Upper" issued to Reebok. The patent protects the design of an athletic shoe, exclusive of the sole, which Reebok's SHAQ I model shoe embodies. On the issue date, Reebok filed a complaint alleging that J. Baker, Inc. (Baker) infringed the '931 patent by making, using or selling its Olympian model athletic shoe. Reebok also filed a motion for a temporary restraining order, which was denied, and a motion for a preliminary injunction requesting that the district court enjoin Baker from making, using or selling the Olympian model shoe. At the preliminary injunction hearing, several facts were established.

Baker began manufacturing and selling the Olympian model shoe in July, 1993, although Reebok did not learn of the Olympian model until November, 1993. By December 7, 1993, the date Reebok filed its complaint, Baker had discontinued production of the Olympian model, but approximately 33,000 pairs of the shoe remained in stock.

Reebok began manufacturing the SHAQ I model shoe in November, 1992. To promote the SHAQ I shoe, Reebok undertook an extensive advertising campaign featuring the popular pro basketball player, Shaquille O'Neal. However, by the date the '931 patent had issued and Reebok had filed its complaint, Reebok had discontinued production of the SHAQ I model. Moreover, by December, 1993, Reebok no longer promoted the SHAQ I model shoe because the company had replaced the SHAQ I with the SHAQ II model ¹ for reasons unrelated to Baker's alleged infringement.

On December 29, 1993, the district court denied Reebok's motion for a preliminary injunction. The order explained:

After hearing on Plaintiff Reebok International Ltd.'s Motion for Preliminary Injunction, the Court denies same on the ground that the Plaintiff has failed to establish irreparable harm. In that the alleged infringing sneakers and the alleged infringed sneakers ² are no longer being produced, in that the design patent was issued only on December 7, 1993, after the alleged infringed sneakers' production was discontinued, and in that only 30,000 pairs Even though the case remains untried, Reebok appealed to this court. We have jurisdiction pursuant to 28 U.S.C. Sec. 1295(a)(1) (1988).

of the alleged infringing sneakers are available for sale, the actual damages sustained by the Plaintiff can be calculated with exact certainty.

STANDARD OF REVIEW

A trial court's decision whether to issue a preliminary injunction is discretionary. When a preliminary injunction is denied, to obtain reversal the movant must show not only that one or more of the findings relied on by the district court was clearly erroneous, but also that denial of the injunction amounts to an abuse of the court's discretion upon reversal of erroneous findings. New England Braiding Co., Inc. v. A.W. Chesterton Co., 970 F.2d 878, 882, 23 USPQ2d 1622, 1625 (Fed.Cir.1992). An appeal from a denial of a preliminary injunction based on patent infringement involves substantive issues unique to patent law and, therefore, is governed by the law of this court. Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1451 n. 12, 7 USPQ2d 1191, 1195 n. 12 (Fed.Cir.1988).

ANALYSIS

Injunctive relief in patent cases is authorized by 35 U.S.C. Sec. 283 (1988). Whether a preliminary injunction should issue turns upon four factors: (1) the movant's reasonable likelihood of success on the merits; (2) the irreparable harm the movant will suffer if preliminary relief is not granted; (3) the balance of hardships tipping in its favor; and (4) the adverse impact on the public interest. Hybritech, 849 F.2d at 1451, 7 USPQ2d at 1195; New England Braiding, 970 F.2d at 882, 23 USPQ2d at 1625. The burden is always on the movant to show entitlement to a preliminary injunction. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 388, 2 USPQ2d 1926, 1928 (Fed.Cir.1987).

A. Likelihood of Success on the Merits

Although the district court made no findings regarding Reebok's likelihood of success on the merits of its infringement claim, Reebok argues for reversal on the ground that it has shown a reasonable likelihood of success. Baker counters that the record would support our independently finding that the '931 patent is invalid and not infringed and, therefore, Reebok has not shown likelihood of success.

A reasonable likelihood of success requires a showing of validity and infringement. Hybritech, 849 F.2d at 1451, 7 USPQ2d at 1195. Deciding whether Reebok has demonstrated a reasonable likelihood of success would require us to make factual findings and decide a factual issue in the first instance, tasks which we, as an appellate court, may not undertake. See Oakley, Inc. v. International Tropic-Cal, Inc., 923 F.2d 167, 169, 17 USPQ2d 1401, 1403 (Fed.Cir.1991) ("We cannot make the necessary factual findings relating to infringement at the appellate level."). Consequently, we must review the district court's denial of a preliminary injunction without the aid of any finding regarding this important factor.

Although it is always preferable that a district court make findings regarding each of the four factors which weigh in the balance concerning whether to deny a preliminary injunction, see Nutrition 21 v. United States, 930 F.2d 867, 869, 18 USPQ2d 1347, 1349 (Fed.Cir.1991) ("Sufficient factual findings on the material issues are necessary to allow this court to have a basis for meaningful review."), the incompleteness of relevant findings here does not necessarily require that we vacate the district court's order and remand for further fact finding. Cf. Oakley, 923 F.2d 167, 17 USPQ2d 1401 (vacating preliminary injunction based on conclusion that trial court's findings supporting the grant were so limited that meaningful review was not possible).

A movant seeking a preliminary injunction must establish a reasonable likelihood

                of success on the merits both with respect to validity and infringement of its patent.  Hybritech, 849 F.2d at 1451, 7 USPQ2d at 1196.   The movant is also required to establish that it will suffer irreparable harm if the preliminary injunction is not granted.  Id. at 1456, 7 USPQ2d at 1199.   Thus, a movant cannot be granted a preliminary injunction without findings by the district court that the movant carried its burden on both factors
                

(i) Relationship to Other Factors

If a preliminary injunction is denied, the absence of an adequate showing with regard to any one of the four factors may be sufficient, given the weight or lack of it discretionarily assigned the other factors by the trial court, to justify the denial. Chrysler Motors Corp. v. Auto Body Panels of Ohio, Inc., 908 F.2d 951, 953, 15 USPQ2d 1469, 1471 (Fed.Cir.1990). Because, irrespective of relative or public harms, a movant must establish both a likelihood of success on the merits and irreparable harm (keeping in mind the burden shifting rule discussed below), the district court may deny a preliminary injunction based on the movant's failure to establish either of these two crucial factors without making additional findings respecting the other factors. Thus, in New England Braiding we affirmed the denial of a preliminary injunction even though the district court did not make findings respecting irreparable harm, the balance of hardships and public interest because the district court did not commit clear error in finding that the movant was not likely to succeed on the merits at trial. 970 F.2d at 882, 23 USPQ2d at 1622.

Arguably, our cases suggest that a district court must always consider all four factors when deciding whether to issue a preliminary injunction. E.g., Illinois Tool Works, Inc. v. Grip-Pak, Inc., 906 F.2d 679, 681, 15 USPQ2d 1307, 1309 (Fed.Cir.1990) ("[t]hose factors and circumstances tend to overlap, but none may be ignored"); Hybritech, 849 F.2d at 1451, 7 USPQ2d at 1195 ("the district court must weigh and measure each factor against the other factors"). In such cases, the district court did consider all four factors. However, as New England Braiding indicates, a closer examination is required.

While a district court must consider all four factors before granting a preliminary injunction to determine whether the moving party has carried its burden of establishing each of the four, we specifically decline today to require a district court to articulate findings on the third and fourth factors when the court denies a preliminary injunction because a party fails to establish either of the two critical factors. See T.J. Smith and Nephew Ltd. v. Consolidated Med. Equip., Inc., 821 F.2d 646, 3 USPQ2d 1316 (Fed.Cir.1987) ...