EI du Pont de Nemours & Co. v. Phillips Petrol. Co.

Citation659 F. Supp. 92
Decision Date06 April 1987
Docket NumberCiv. A. No. 81-508-JLL.
CourtUnited States District Courts. 3th Circuit. United States District Court (Delaware)
PartiesE.I. du PONT de NEMOURS & COMPANY, Plaintiff, v. PHILLIPS PETROLEUM COMPANY, Phillips 66 Company, and Phillips Driscopipe, Inc., Defendants.

William O. LaMotte III of Morris, Nichols, Arsht & Tunnell, Wilmington, Del. and John O. Tramontine, Edward F. Mullowney, Glenn A. Ousterhout and Thomas J. Vetter of Fish & Neave, New York City of counsel, for plaintiff.

C. Waggaman Berl, Jr., Wilmington, Del., Fred H. Bartlit, Jr., Philip S. Beck, Emily Nicklin, John Donley, and Philip C. Swain of Kirkland & Ellis, Chicago, Ill. and Harry J. Roper, George S. Bosy, Lawrence E. Apelzon, Raymond N. Nimrod and Steven R. Trybus of Neuman, Williams, Anderson & Olson, Chicago, Ill. of counsel, for defendants.

Richard E. Poole and Peter M. Sieglaff of Potter, Anderson & Corroon, Wilmington, Del. and Ford F. Farabow, Jr., Basil J. Lewis of Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C. and Patrick L. Henry of Morristown, N.J. of counsel, for Allied-Signal, an applicant for leave to file an amicus brief.

Henry N. Herndon, Jr., of Morris, James, Hitchens & Williams, Wilmington, Del., for Mobil Oil Corp., an applicant for leave to file an amicus brief.

LATCHUM, Senior District Judge.

I. BACKGROUND

In this patent infringement case brought by E.I. du Pont de Nemours and Company ("DuPont") against Phillips Petroleum Company, Phillips 66 Company, and Phillips Driscopipe, Inc. (collectively "Phillips"), this Court on February 26, 1987, 656 F.Supp. 1343, entered an Opinion (Docket Item "D.I." 264) and a Judgment (D.I. 265) which held 82 of Phillips' products infringed one or more of claims 1, 2, 5, 10, 12, and 14 of DuPont's United States Patent No. 4,076,698 ("the '698 patent"). Paragraph 6 of that Judgment permanently enjoined defendants, their officers, agents, employees, and licensees, if any, from continuing to infringe, manufacture, use or sell any product which embodies the invention of the '698 patent. (Id. ¶ 6.)

The permanent injunction was granted only after the Court had conducted a 21-day non-jury trial from July 21, 1986 through August 18, 1986, on the merits of the liability issues of validity, enforceability and infringement, heard firsthand the testimony of 29 fact and expert witnesses, reconsidered 3,300 pages of trial transcripts, reviewed 999 exhibits, and digested 409 pages of post-trial briefs.

On February 27, 1987, Phillips moved, pursuant to Rule 62(c), Fed.R.Civ.P., for a stay of the injunction pending appeal. At a conference with opposing counsel held on that same date, the Court at Phillips' request and without objection by DuPont reluctantly stayed the permanent injunction until this Court had received briefs according to an established schedule and ruled on Phillips' motion for a stay of the injunction pending appeal. (D.I. 268.)

Two non-parties, Allied-Signal and Mobil Oil Corporation, on March 13, 1987, moved for leave to file amicus briefs in support of Phillips' stay motion. These non-parties also filed briefs with their motions. (D.I. 270, 271 & 274.) While the Court did not formally rule on these motions, it has read the proffered briefs and has taken their contents into consideration in ruling upon Phillips' motion for a stay.1

II. DISCUSSION

35 U.S.C. § 283 provides that a court "may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the Court deems reasonable." Under this provision, the decision whether to grant a permanent injunction is a matter within the sound discretion of the trial court. Roche Products v. Bolar Pharmaceutical Co., 733 F.2d 858, 865 (Fed.Cir.1984). As a court of equity, the Court must consider all circumstances, including the adequacy of the legal remedy, irreparable injury, whether the public interest would be served, and the hardship on the parties and third parties. Roche, 733 F.2d at 865-66; Shiley Inc. v. Bentley Laboratories, Inc., 601 F.Supp. 964, 969 (C.D. Cal.1985), aff'd, 794 F.2d 1561 (Fed.Cir. 1986).

Phillips, applying the traditional four-factor test, contends that this Court should stay the permanent injunction pending appeal because it has made a strong showing that it (1) is likely to succeed on the merits on appeal; and a showing that (2) unless a stay is granted, it will suffer irreparable injury, that (3) no substantial harm will come to other parties, and (4) that a stay will do no harm to the public interest. (D.I. 274.) The Court disagrees and finds that Phillips has not made the strong showing necessary for the relief requested. The Court will consider the four-factor test in order.

1. Phillips' Likelihood Of Success On Appeal

Under this heading, Phillips continues to argue that this Court was wrong in holding the '698 patent valid, enforceable and infringed. All of its arguments are warmed-over versions of its prior contentions upon which it did not prevail after trial. While this Court does not pretend to be infallible, it does know that its findings of fact were impartially made based on the credible testimony and evidence presented at trial and that its conclusions of law followed precedents established by controlling Supreme Court and Federal Circuit decisions. No purpose would be served here to rehash those findings of fact and conclusions of law already dealt with in great detail in the Court's February 26, 1987 Opinion. Phillips has not demonstrated that this Court was incorrect and is likely to be reversed on appeal. Accordingly, the Court concludes that Phillips has not made a strong showing of likelihood of success on appeal.

2. Phillips' Irreparable Harm

Phillips here argues that while the permanent injunction will not force it out of business or force it to tear down its plant, it will lose customers and business which it will probably be unable to recover if this Court's decision is reversed. However, the loss of customers or business built upon the sale and use of infringing products does not amount, in the context of a patent infringement suit, to irreparable harm from which Phillips should be shielded. Thus, in reality, the only harm that Phillips will suffer if the injunction is not stayed is the loss of profits from the use and sale of infringing products. The Court has already found that massive infringement has occurred in the past and now Phillips begs that it be permitted to continue to infringe. To put an end to infringement is the reason for 35 U.S.C. § 283 which gives the Court power to issue injunctions. As the Federal Circuit stated in Windsurfing International, Inc. v. AMF, Inc., 782 F.2d 995, 1003 n. 12 (Fed.Cir. 1986):

Downwind said its infringing sales were between 1,000 and 2,000 sailboards a year since it began operations in 1981. AMF was selling about 1,800 sailboards a year during the same four-year period. That sailboards are Downwind's primary product, and that an injunction might therefore put Downwind out of business, cannot justify denial of that injunction. One who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected. The district court, recognizing the absence of bad faith on the part of all parties, weighed the effect of its orders on each. In so doing it indicated that WSI's entire business was built on sailboards and accessories, and thus that Downwind and WSI were in the same boat. Under those circumstances, no warrant appears on this record for denying the requested injunction against continued infringement by Downwind.

Recent district court decisions are to the same effect, e.g., Crucible, Inc. v. Stora Kopparbergs Bergslags AB, 226 USPQ 842, 845 (W.D.Pa.1985), aff'd in part and remanded in part, 793 F.2d 1565 (Fed.Cir. 1986):

Stora, as in Smith International, was aware of Crucible's patents and, based upon the assumption it was infringing Crucible's patents, chartered a strategy "to check patent validity; contest patent validity; and in the process, to get defendants' products into the United States market." Crucible Inc. v. Stora Kopparbergs Bergslags A.B., 594 F.Supp. 1249 at 1264, 226 USPQ at 48. Stora assumed the risk that its strategy would not succeed, that the patents would be found valid and its business and markets thereafter disrupted.... Consequently, as in Smith International, plaintiff now is entitled to its injunction and Stora, therefore, should not be heard to complain of that which it had every reason to anticipate would be the result if it lost its gamble.

Also in Polaroid Corp. v. Eastman Kodak Co., 641 F.Supp. 828, 228 USPQ 305 (D.Mass.1985), aff'd, 789 F.2d 1556 (Fed. Cir.1986), the district court stated at 343-44:

I am not unmindful of the hardship an injunction will cause — particularly to Kodak customers and employees. It is worth noting, however, that the harm Kodak
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  • EI DuPont de Nemours v. Phillips Petroleum, Civ. A. No. 81-508-JLL.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • March 21, 1989
    ...patent. (D.I. 265.) This Court also denied Phillips' motion to stay the injunction pending appeal. See E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 659 F.Supp. 92 (D.Del. 1987). This Court's decision notwithstanding, the Federal Circuit granted Phillips' motion to stay "in view o......
  • EI Du Pont de Nemours v. Phillips Petroleum, Civ. A. No. 81-508-JLL.
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