North Carolina Federal Court Denies Patent Holder’s Request for Temporary Restraining Order
In FBA Operating Co. v. ETN Capital, LLC d/b/a Beech Lane, the U.S. District Court for the Eastern District of North Carolina denied a patent holder’s rare motion for a temporary restraining order (“TRO”) seeking to halt the manufacture and sale of an allegedly infringing product at the outset of a lawsuit. Case No. 5:23-CV-505-D, 2023 WL 6612439 (E.D.N.C. Oct. 10, 2023). The court’s opinion confirmed the high bar for obtaining TROs for patent infringement.
FBA sued Beech Lane in mid-September for infringing FBA’s patent for a recreational vehicle leveling system. Two weeks later FBA moved for a TRO to prevent Beech Lane from manufacturing and selling its product during the pendency of the case.
A TRO is an extraordinary form of relief through which a court orders a party to do (or, more commonly, not to do) something while a case is pending. It is like a preliminary injunction, except that a TRO is decided on an accelerated schedule and can issue without notice to the restrained or enjoined party. The distinguishing feature of both TROs and preliminary injunctions is that they are in place before a case has been decided on the merits. By contrast, permanent injunctions issue after liability has been established following a trial or entry of summary judgment.
The Test for a TRO
TROs are disfavored, and they are rarely sought in patent infringement cases. To obtain a TRO (or a preliminary injunction), a party “must establish that (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm absent [a TRO], (3) the balance of equities tips in its favor, and (4) [a TRO] is in the public interest.” Id. at *1 (citing Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)).
The First Prong
FBA’s motion failed at the first prong because FBA failed to show that it was likely to succeed on the merits of its infringement claim. To succeed on an infringement claim, a patent holder “must show that, in light of the presumptions and burdens [of proof] that will inhere at trial on the merits,” it will likely prove that its patent has been infringed and its patent likely will withstand the defendant’s challenges to its validity and enforceability. Id. at *2 (quoting Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)). Beech Lane did not contest the validity of FBA’s patent, so the court’s analysis focused only on the first issue, whether FBA could establish infringement. Id.
The infringement inquiry is twofold. First, the court construes, or interprets, the patent claims at issue—claims being what define in technical terms the invention protected by the patent. Second, the court considers whether the properly construed claims encompass the allegedly infringing product. Id. (citing Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc)).
The claims at issue concerned the information shown on the display for the RV leveling system. The claims recited that the display device is configured to “simultaneously display the height adjustment amount and corresponding adjustment direction of each adjustment pair adjacent to each section of the [vehicle].” Id. at *3. After considering the patent specification, the plain text of the claims and the history of FBA’s prosecution of the claims before the U.S. Patent and Trademark Office, the court concluded that “the natural reading” of the claims indicated that “each adjustment pair” “correspond to the pitch and roll.” Id. Thus, the patent protected only the simultaneous display of both “(1) the amount and direction of the [necessary] pitch adjustment and (2) the amount and direction of the [necessary] roll adjustment” to level the RV. Id.
In addition, the claims were amended during prosecution to distinguish over prior art. The court noted that if the claims were construed to “require only display of one adjustment pair, such as the pitch adjustment pair,” that construction “would conflict with the prior art.” Id. This factor further supported the claim construction.
The court then turned to whether Beech Lane’s product infringed those claims as construed. There are two tests for infringement: literal infringement, which occurs when the allegedly infringing product includes “each and every limitation of the asserted claim(s),” and infringement under the doctrine of equivalents, which occurs when the allegedly infringing product “performs substantially the same function in substantially the same way to obtain the same result” as the patented product. Id. at *4 (first quoting Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1166 (Fed. Cir. 2014) then quoting Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950)). FBA could not prove literal infringement because Beech Lane’s product does not simultaneously display all the information set forth in the claims. Further, the doctrine of equivalents did not apply because (1) FBA could not show that Beech Lane’s products accomplished the same thing as the claimed device and, (2) in any event, FBA was estopped from relying on the doctrine of equivalents because it had narrowed its claims during prosecution by adding the “simultaneously” language to distinguish over the prior art and therefore was presumed to have surrendered all the equivalents. Id.
For these reasons, FBA failed to show it was likely to succeed on the merits “[a]t this preliminary stage,” and the court denied its motion for a TRO without reaching the second, third or fourth prongs of the test for a TRO. Id. at *5.
A motion for a TRO or a preliminary injunction at the outset of a patent case presents substantial risk for a defendant and can, if granted, be a powerful weapon. If successful it has the potential to effectively end a case and avoid years of protracted litigation. However, a TRO is an extraordinary remedy that is rarely granted, requires a high level of proof on both technical and equitable factors, and requires significant advance preparation. In addition, an unsuccessful motion, and an adverse finding of the patent holder’s likelihood of success on the merits, often put the patent holder at a disadvantage in the ensuing litigation.
If you have questions related to this alert, please contact Kelsey Nix, Co-Chair of Smith Anderson's IP Litigation Practice, Hope Garber or the Smith Anderson lawyer with whom you currently work.