High Tech Medical Instrumentation, Inc. v. New Image Industries, Inc., 94-1360

• Decision Date: 06 March 1995
• Docket Number: No. 94-1360,94-1360
• Citation: 33 USPQ2d 2005,49 F.3d 1551
• Parties: HIGH TECH MEDICAL INSTRUMENTATION, INC., Plaintiff-Appellee, v. NEW IMAGE INDUSTRIES, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1551

49 F.3d 1551

33 U.S.P.Q.2d 2005

HIGH TECH MEDICAL INSTRUMENTATION, INC., Plaintiff-Appellee, v.NEW IMAGE INDUSTRIES, INC., Defendant-Appellant.

No. 94-1360.

United States Court of Appeals Federal Circuit.

March 6, 1995.

Jack L. Slobodin, Cartwright, Slobodin, Bokelman, Borowsky, Wartnick, Moore & Harris, San Francisco, CA, argued for plaintiff-appellee.With him on the brief was Stephen J. Akerley.

Mark E. Miller, Fliesler, Dubb, Meyer & LoveJoy, San Francisco, CA, argued for defendant-appellant.With him on the brief were Martin C. Fliesler and Burt Magen.

Before MICHEL, SCHALL and BRYSON, Circuit Judges.

BRYSON, Circuit Judge.

This is an appeal from an order of the United States District Court for the Northern District of California, No. C93-4152 SBA(June 3, 1994), granting a patent holder's motion for a preliminary injunction in a patent infringement suit.Although the district judge engaged in a detailed analysis that makes us reluctant to second-guess her judgment, we have concluded that the court committed legal errors that require reversal of the order granting preliminary injunctive relief.

I

AppelleeHigh Tech Medical Instrumentation, Inc., (HTMI) is the assignee of all rights to reexamined United States PatentNo. 4,858,001(the '001 patent).The patent discloses a hand-held endoscope--a miniature imaging device--that is designed for use in dental work.A small video camera is contained within a thin, tube-shaped device that can be placed inside a patient's mouth so that a dentist can obtain an electronic image of any area of the oral cavity.The image can then be displayed on a screen in the dentist's office or preserved for later review.

The claim principally at issue in this case is claim 24 of the '001 patent.That claim recites:

An endoscopic optical device comprising:

a body member;

a camera disposed in said body member, said camera being rotatably coupled to said body member; and

an objective element coupled to said body member and arranged to focus an image of a target upon said camera.

As explained in the specification of the '001 patent, a camera that is "rotatably coupled" to its housing permits the operator to rotate the camera within the housing during use while the camera remains at the proper distance from the objective element so that the image remains in focus.The rotation of the camera results in the rotation of the image produced by the camera on the viewing screen, so that the operator, by twisting a section of the handle that is attached to the camera, can turn the image on the screen to the orientation most convenient for viewing.

Early in 1991, appellantNew Image Industries, Inc., (New Image) acquired a company that was making an intraoral endoscope and began marketing a version of its device under the name "AcuCam."In November 1993, HTMI filed an action charging New Image with infringement of its rights under the '001 patent.The complaint alleged infringement of claims 24, 30, and 31 of the '001 patent.At the same time, HTMI moved for a preliminary injunction to prevent New Image from infringing its rights under the '001 patent pending trial.

In considering whether to grant preliminary injunctive relief, the district court took evidence and made findings with regard to the structure and operation of the AcuCam.The evidence showed that although the AcuCam is similar in some respects to the endoscope claimed in the '001 patent, the AcuCam camera, as designed and sold, does not rotate within its housing.Instead, the camera is fixed within the housing by two set screws, which prohibit the rotation of the camera when they are tightened.The district court found that, when the two set screws are loosened, the AcuCam camera can rotate within its housing.New Image contested that finding and argued that, in any event, there is no reason for an operator to loosen the set screws during routine use.New Image's counsel represented to the district court that the AcuCam system uses software, not physical rotation of the camera, to rotate the image to the preferred orientation on the viewing screen.

The district court applied the familiar four-part test to determine whether to grant a preliminary injunction: (1) whether the moving party is likely to succeed on the merits; (2) whether the moving party will suffer irreparable harm if a preliminary injunction is not granted; (3) whether the balance of hardships tips in favor of the moving party or the opponent; and (4) whether the grant of preliminary injunctive relief will adversely affect the public interest.Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555, 31 USPQ2d 1781, 1783(Fed.Cir.1994).

With respect to HTMI's prospects of success on the merits, the district court found that HTMI had made a clear showing that the AcuCam infringed claim 24 of the '001 patent.Focusing on the "rotatably coupled" limitation of claim 24--the only limitation in dispute--the court found that because the AcuCam camera can be rotated within its housing when the set screws are loosened, the AcuCam camera must be considered "rotatably coupled" to the body member.

As to the validity of claim 24, the court found that HTMI had clearly established validity for purposes of the preliminary injunction proceedings.The court relied on the statutory presumption of validity, 35 U.S.C. Sec. 282, and the fact that New Image had been "unable to offer any credible challenge" to the validity of the '001 patent.

The district court next turned to the irreparable harm element of the four-part test.Based on its findings that both infringement and validity were clearly shown, the court held that HTMI was entitled to a presumption that it would suffer irreparable harm in the absence of preliminary injunctive relief.Although the court noted that HTMI had delayed filing suit for almost 17 months after the issuance of the reexamination certificate, the court concluded that HTMI's delay in seeking preliminary relief was not sufficient by itself to rebut the presumption of irreparable harm.

The district court next found that, in light of the time and resources HTMI expended in securing the '001 patent, the balance of hardships tipped in HTMI's favor.Although the court noted that AcuCam sales made up approximately 77 percent of New Image's revenues during the prior year, the court ruled that it "is not appropriate ... for an infringer to cite to losses suffered as a result of enjoining that infringement as a 'hardship,' where, as here, the plaintiff has made a strong showing of validity and infringement."

The court found that the fourth factor--the effect of an injunction on the public interest--weighed slightly in New Image's favor and against granting an injunction.The court noted that New Image had cited the public health benefits of intraoral cameras and that New Image was supplying a substantial share of the market of such cameras.Upon considering all four factors together, however, the district court concluded that the public interest did not outweigh the factors supporting a preliminary injunction.The court therefore granted an injunction against New Image's infringement of claim 24 of the '001 patent and prohibited New Image from "making, using, or selling the AcuCam in the United States or its territories pending resolution of this matter at trial on the merits."

The court reached a different result on HTMI's request for an injunction against infringement of claim 30 of the '001 patent.The court found that HTMI had failed to prove that it was likely to succeed in establishing infringement of claim 30 at trial and therefore was not entitled to preliminary injunctive relief as to that claim.HTMI withdrew its reliance on claim 31 as a basis for seeking a preliminary injunction.

II

Congress has authorized district courts in patent cases to 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."35 U.S.C. Sec. 283.That provision authorizes courts in infringement actions to grant preliminary injunctions pending trial, as well as permanent injunctions after a full determination on the merits.This court has made clear that the standards applied to the grant of preliminary injunctions are the same in patent cases as in other areas of the law.H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387, 2 USPQ2d 1926, 1927(Fed.Cir.1987).The court has noted that a preliminary injunction is "not to be routinely granted."Intel Corp. v. ULSI Sys. Technology, Inc., 995 F.2d 1566, 1568, 27 USPQ2d 1136, 1138(Fed.Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 923, 127 L.Ed.2d 216(1994).After a district court has granted a preliminary injunction, however, this court will reverse only if the district court has "abused its discretion, committed an error of law, or seriously misjudged the evidence."Hybritech Inc. v. Abbott Lab., 849 F.2d 1446, 1449, 7 USPQ2d 1191, 1194(Fed.Cir.1988).

New Image challenges the district court's decision on each of the issues on which the court ruled against it.We conclude that the district court committed legal errors in the course of disposing of two of the issues before it: HTMI's likelihood of success on the merits of its infringement claim, and HTMI's claim that it will suffer irreparable harm if it is denied injunctive relief pending trial.Because we conclude that the injunction granted in this case cannot be sustained in light of our disposition of those issues, it is unnecessary to address the arguments directed to the other factors bearing on the issuance of preliminary injunctive relief.

Infringement of Claim 24

As noted, the district court found that loosening the two set screws that attach the AcuCam camera to its housing permits the camera to rotate about the longitudinal axis of the housing without shifting position along that axis.The court acknowledged that...