A balanced injunction
There was a time when an application for an interim injunction was commonplace at the beginning of many patent infringement disputes. In recent decades, as it has become quicker to reach a judgment in English patent courts, applications for interim injunctions have become rarer. However, an interim injunction has recently been granted by the High Court in a patent dispute (Permavent Ltd v Makin [2017] EWHC 2077 (Pat), 24 July 2017). This was a little unusual in that the dispute was not an infringement action, but a patent entitlement dispute (i.e. who owns the patent).
The injunction, applied for by the claimant, prohibited any dealings with the patents subject to the proceedings. The defendant owned a number of patents which were licensed to the claimant company, which the claimant argued should be owned by them as the inventions had been made in the course of the defendant's employment by the claimant company (the defendant was also a founding director). These proceedings formed part of a wider dispute between the parties, which included issues of corporate mismanagement and shareholder claims.
As is usual when considering the issue of an injunction, the court referred to the test laid down in American Cyanamid: (1) was there a serious issue to be tried; (2) the question of irreparable harm to either party if an injunction is granted; and (3) the balance of convenience.
On point 1, Daniel Alexander QC (sitting as a Deputy Judge) held that the true ownership of the patents was a serious issue and that at this stage it was not clear which party was correct. This was a question that would require significant investigation at trial. Further, the matter was particularly complicated as both the claimant and defendant had appeared to have previously acknowledged the other side's claim to ownership; the defendant in an internal email and the claimant in entering the patent licence.
On point 2, the court reviewed the position of both parties. For the claimant, there was a real risk of harm if the patents were transferred by the defendant (particularly to a competitor), or a licence was entered into which the claimant could not later unravel in the event that the claimant was held to be the true owner. Whilst if the injunction was granted, the defendant might lose viable opportunities to sell or license the patents, Alexander QC held this to be of relatively modest impact.
Finally, in relation to point 3, the balance of convenience, the court commented that the real importance was to retain the status quo. Up to the time of the application, the claimant was selling products subject to the patents. Whilst the defendant did not have any real objection to this continuing, he was concerned that he would not be properly recompensed for his technical contribution to the patents if it transpired that the defendant was the proper owner. This led to the Deputy Judge imposing conditions on the injunction, including that the claimant company would pay the defendant a monthly payment as a quasi-royalty.
Comment
This case is a helpful reminder of the use of interim injunctions, and that they have applicability not just in infringement disputes, but also in other aspects of IP disputes, such as ownership. It further shows how interim injunctions need not be a binary injunction/no-injunction decision, but can be tailored by the court to provide a balance between parties' interests – granting relief for the claimant whilst still protecting the defendant's interest.