[Ip-health] US compulsory license in DirectTV patent case - Finisar Corp. v. DirecTV Group, Inc.

[Amy Kapczynski]

This is really interesting for another reason.  Until the eBay case last
term in the US Supreme Court, everyone presumed that injunctions were
automatic when a patent is found to be infringed.  But eBay said that trial
judges could look at traditional factors including the public interest to
decide whether money (a compulsory license) or an injunction (an order to
stop infringing) was the proper remedy.  This creates the possibility for a
lot of compulsory licensing through the back door, so to speak,
particularly in cases like this where you have serious potential for hold
up.  And it looks like trial courts are taking the invitation to be more
rigorous and skeptical before imposing an injunction.

This is almost certainly TRIPS compliant, and represents another
"flexibility" that countries concerned w/ the over-protection of IPRs may
want to consider.

Amy K.

At 09:21 AM 11/17/2006, James Love wrote:
>Definitely not a public health emergency, but a case involving access
>to satellite television, which shows that some countries know how to
>use the TRIPS flexibilities. Jamie
>
> From the decision:
>
>"For the reasons stated at the July 6, 2006 hearing, the Court denied
>Plaintiff=92s motion for injunctive relief and granted a compulsory
>license. Defendants are hereby ORDERED, for the remaining life of the
>` 505 patent, to pay Plaintiff an ongoing royalty of $1.60 per
>Integrated Receiver Decoder, commonly referred to as a set top box,
>activated by or on behalf of or for any of the named Defendants or
>their present or future affiliates or subsidiaries after June 16,2006."
>
>http://www.fr.com/news/articledetail.cfm?articleid=3D605
>
>Here is the Fish and Richardson analysis of: Finisar Corp. v. DirecTV
>Group, Inc.
>
>Judge Ron Clark denied Finisar Corp.'s motion for entry of a
>permanent injunction against DirecTV, following a jury's finding that
>DirecTV infringed Finisar's information transmission system
>technology, and that the infringement was willful. The Court analyzed
>the case under the four-factors set forth by the Supreme Court in
>eBay: irreparable harm, adequacy of remedies available at law,
>balance of hardships, and public interest. The Court found that there
>was no irreparable harm because Finisar never sold the rights to the
>patent or made an attempt to practice the patented technology. The
>Court held that a compulsory license would adequately compensate
>Finisar for DirecTV's future use of the patent. Looking at the
>balance of hardships and the public interest, the Court noted that
>the satellite television market is a two-competitor market. An
>injunction could have put DirecTV out of business and created a
>monopoly. Furthermore, the Court noted that an injunction would
>negatively affect thousands of DirecTV employees, and 15 million
>DirecTV subscribers could lose their television service. These facts
>lead the Court to conclude that the balance of the hardships favored
>DirecTV and the public would be best served by not granting an
>injunction.
>
>(For more commentary, see: http://www.patentlyo.com/patent/2006/08/
>injunction_deni.html)
>
>
>Case 1:05-cv-00264-RHC Document 333 Filed 07/07/2006 Page 1 of 2
>
>IN THE UNITED STATES DISTRICT COURT
>FOR THE EASTERN DISTRICT OF TEXAS
>BEAUMONT DIVISION
>
>Civil Action No. 1:05-CV-264 , JUDGE RON CLARK
>
>FINISAR CORP., Plaintiff,
>v.
>THE DIRECTV GROUP, INC., ET AL., Defendants.
>
>FINAL JUDGMENT
>
>Pursuant to Rule 58 of the Federal Rules of Civil Procedure and in
>accordance with the jury verdict delivered on June 23, 2006 and the
>Court=92s oral findings and conclusions entered on the record July 6,
>2006, the Court hereby enters judgment for Plaintiff Finisar Corp.
>and against Defendants The DirecTV Group, Inc., DirecTV Holdings,
>LLC, DirecTV Enterprises, LLC, DirecTV Operations, LLC, DirecTV,
>Inc., and Hughes Network Systems, Inc. for infringement of U.S.
>Patent No. 5,404,505, claims 16, 17, 22, 24, 26, 39, and 44. IT IS
>THEREFORE ORDERED that Plaintiff Finisar Corp. shall have and recover
>from Defendants The DirecTV Group, Inc., DirecTV Holdings, LLC,
>DirecTV Enterprises, LLC, DirecTV Operations, LLC, DirecTV, Inc., and
>Hughes Network Systems, Inc., jointly and severally, the total sum of
>$103,920,250.25, plus prejudgment interest at the agreed rate of 6%,
>calculated as stated on the record at the July 6, 2006 hearing, on
>the damages found by the jury, said prejudgment interest totaling
>$13,359,276.00, together with post judgment interest on the entire
>sum calculated pursuant to 28 U.S.C. =A7 1961.
>
>For the reasons stated at the July 6, 2006 hearing, the Court denied
>Plaintiff=92s motion for injunctive relief and granted a compulsory
>license. Defendants are hereby ORDERED, for the
>
>
>Case 1:05-cv-00264-RHC Document 333 Filed 07/07/2006 Page 2 of 2
>
>remaining life of the ` 505 patent, to pay Plaintiff an ongoing
>royalty of $1.60 per Integrated Receiver Decoder, commonly referred
>to as a set top box, activated by or on behalf of or for any of the
>named Defendants or their present or future affiliates or
>subsidiaries after June 16,2006. Royalties shall be paid quarterly
>accompanied by a statement in accordance with the provisions of
>paragraph 3.8 of the MPEG-2 Patent Portfolio License, dated February
>22, 2001, granted to Hughes Network Systems, Inc. Payments shall
>begin three months after the date of signing of this judgment and
>shall be made quarterly thereafter. Payments not made within 14 days
>of the date due shall accrue interest at the rate of 10% , compounded
>monthly. Finisar shall have the right to request audits in accordance
>with the provisions of paragraph 3.9 of said MPEG-2 Patent Portfolio
>License. It is anticipated that, as sophisticated entities with
>experience in licensing agreements, the parties may wish to agree to
>more comprehensive or convenient terms. The parties shall promptly
>notify the court of any such agreement. The court maintains
>jurisdiction to enforce this portion of the Final Judgment.
>
>Costs are taxed against Defendants The DirecTV Group, Inc., DirecTV
>Holdings, LLC, DirecTV Enterprises, LLC, DirecTV Operations, LLC,
>DirecTV, Inc., and Hughes Network Systems, Inc. jointly and
>severally. All relief not specifically granted herein is denied. All
>pending motions not previously ruled on are denied. This is a Final
>Judgment and is appealable.
>
>So Ordered and Signed this 7 day of July, 2006
>
>Signed
>Ron Clark, United States District Judge
>
>---------------------------------
>James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
>tel. +1.202.332.2670 / mobile +1.202.361.3040
>
>"If everyone thinks the same: No one thinks."  Bill Walton"
>
>
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