Addressing preliminary injunction issues in a case between two
competitors, the US Court of Appeals for the Federal Circuit
affirmed the district court's grant of the injunction, finding
that the plaintiff would likely suffer irreparable harm as a result
of an "ecosystem effect" that made it difficult to
quantify damages. Metalcraft of Mayville, Inc. v. The Toro
Co., Case No. 16-2433 (Fed. Cir., Feb. 16, 2017) (Moore,
Metalcraft (doing business as Scag) owns a patent directed to a
lawnmower with a "suspended operator platform," which
suspends the operator's entire body above the mower chassis so
that the operator is isolated from vibrations or shocks resulting
from rough terrain. After Scag began marketing and selling its
suspended operator platform lawnmowers, Toro entered the market
with its version of the product. Toro's suspended operator
platform lawnmower was not identical, however; Scag's lawnmower
included a suspended control platform, while the controls on
Toro's mowers were fixed to the chassis. Scag filed an
infringement action against Toro and moved for a preliminary
injunction. After the district court granted Scag's request for
a preliminary injunction, Toro appealed.
Reviewing the district court's grant of the preliminary
injunction under an abuse of discretion standard, the Federal
Circuit affirmed the district court. For each factor, however, the
Federal Circuit reviewed the underlying determinations under their
corresponding standards (i.e., reviewing infringement for
clear error and reviewing claim construction and obviousness de
novo), except for subsidiary factual findings (such as the
district court's determination as to motivation to combine),
which the Court reviewed for clear error.
The Federal Circuit found no error in the district court's
infringement analysis and agreed with the district court's
claim construction. On this issue, Toro argued that its mowers did
not infringe because its platform did not suspend the "entire
body" of the operator as Toro believed the claims required.
According to Toro, because its lawnmowers included controls fixed
to the chassis, the operator's hands would not be
"suspended" when operating the controls. The Federal
Circuit rejected this argument, finding that district court
correctly determined that the claims did not require the controls
to be mounted on the suspended platform.
The Federal Circuit also found that there was no substantial
question of validity. On appeal, Toro argued that the district
court improperly rejected Toro's motivation to combine certain
prior art references. The Federal Circuit found no clear error in
this factual determination, noting that Toro provided no
explanation for how or why the references would be combined to
arrive at the claimed invention.
As to irreparable harm, the district court found that Scag would
likely suffer irreparable harm because it would be impossible to
quantify Scag's damages. Specifically, testimony of record in
the case showed that "ecosystem effects" made it too
difficult to quantify harm, because customers who purchased an
infringing Toro product may develop loyalty to Toro, continue to
buy Toro's products and recommend Toro products to others.
Given this unquantifiable, far-reaching and long-term impact on
Scag's future revenues, the Federal Circuit agreed that Scag
was likely to suffer irreparable harm without a preliminary
As to the balance of equities, the Federal Circuit found no
abuse of discretion in the district court's determination that
Scag's hardship in having to compete against its own patented
invention outweighed Toro's perceived hardship in disrupting
the status quo. Not only would the injunction highlight the
importance of encouraging innovation, the public would also
continue to have access to the patented system from Scag. For these
reasons, the Federal Circuit agreed that the balance of equities
favored Scag and that the grant of an injunction was in the public
In Wasica Finance GmbH v. Continental Automotive Systems, Inc., No. 15-2078 (Fed. Cir. 2017), the patentee Wasica Finance discovered, among other things, the importance of using consistent terminology in the patent specification and claims.
Why wait more than a week after the Supreme Court issued its March 21 decision in SCA Hygiene Products Aktiebolag et al. v. First Quality Baby Products, LLC, et al. to send a "Breaking News" eAlert? Because the Supreme Court said delay doesn't matter!
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