Sealant Sys. Int'l Inc. v. TEK Global S.R.L., Case No. 5:11-cv-00774-PSG (Magistrate Judge Grewal, October 13, 2014)

Back in March, we reported that Magistrate Grewal enjoined defendant TEK Global from selling any tire repair kit that practices Accessories Marketing , Inc. ("AMI")'s patent after the jury found TEK infringed. Now TEK has returned to ask for a stay of the injunction or at least an extension of the nine-month sunset period pending the Federal Circuit's decision of TEK's appeal. Magistrate Grewal denied the stay and extension request.

What's interesting about this order is that Magistrate Grewal acknowledged that the patentee, AMI, does not practice the asserted patent. TEK argued that AMI, which also sells tire repair kits, is not significantly harmed because AMI does not practice the asserted patent. (AMI brought the patent from another third-party to assert against TEK after TEK sued AMI for patent infringement—TEK's patent was dismissed on summary judgment and the jury found TEK to infringe AMI's patent). It is important to keep in mind however, that even though AMI does not practice the asserted patent, Magistrate Grewal also noted that strong evidence of fierce competition between TEK and AMI in the on-board-tire-repair-kit market had been presented during trial.

Magistrate Grewal concluded that AMI has the right to exclude others from practicing its patent notwithstanding that it doesn't practice the patent. Magistrate Grewal also rejected TEK's suggestion that it be permitted to sell the accused products during the extended stay to certain customers with royalties covered by the bond posted because that is tantamount to a compulsory license. Noting that AMI had never licensed its patent, he concluded that it is not fair to impose a compulsory license on AMI, even if AMI is not actively using the patented technology. As for the market and the public, although the public has a strong interest in maintaining a competitive market for tire repair kits, it is also in the public's interest to enforce patent rights. Accordingly, the Court denied TEK's request to stay the injunction or extend the sunset period. Whether such a conclusion would be reached under similar circumstances but in the absence of "fierce competition" between the parties" must be left for another day.

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