The Software IP Report

Court Finds Evonik Entitled to Permanent Injunction

By David Hannon

Categories: The Software IP Report

In August 2009, Evonik Degussa GmbH filed a complaint for infringement of its U.S. Patent No. 7,378,528 directed to olefin metathesis catalysts containing NHC (N-heterocyclic carbene) ligands against Materia Inc.  After nearly eight years of lengthy litigation, and following findings of validity, infringement, and damages before a jury, the Court has now ruled that Evonik is entitled to a permanent injunction.  Evonik Degussa GmbH v. Materia Inc., 1-09-cv-00636, (D. Del. Aug. 9, 2017).

While the Court directed the parties to confer on the specific terms, the Court analyzed Evonik’s entitlement to a permanent injunction per the traditional factors as interpreted in the Supreme Court’s eBay decision:  (1) irreparable harm, (2) adequacy of monetary damages, (3) balance of hardships, and (4) public interest.  eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).

For irreparable harm, the Court cited the trial record regarding the parties’ competition and Evonik’s unwillingness to license competitors under the patent-in-suit.

For adequacy of monetary damages, the Court relied on the same “irreparability” factors – competition and unwillingness to license, coupled with Evonik’s maintenance of its unwillingness to license through the lengthy litigation.  The Court rejected Evonik’s argument that Materia’s ability to pay a further judgment was in doubt, stating that it “does not find that it is ‘improbab[le] that [Evonik] could collect a money judgment’ from Materia.”  (Internal citation omitted).  The Court noted the facts were mixed, citing testimony that Materia was not profitable, but generated revenues of about $28 million.  Nevertheless, the Court found that this factor favored Evonik, with seemingly great weight placed on Evonik’s unwillingness to license.

Evonik obtained in finding in view of yet other facts that appear on their face to favor Materia.  The Court expressly acknowledges that Evonik is much larger than Materia, that the jury award of ~$1.5 million in damages (including the time period during the lengthy litigation), and that only two years of term are left on the patent-in-suit.  For context, in the press release following the trial, Evonik notes that its 2015 revenue was €13.5 billion, resulting in a profit of €2.47 billion.  It appears that Evonik’s presentation of its unwillingness to license was quite persuasive.

The “adequacy” analysis apparently carries the day in “balancing the hardships.”  Indeed, the decision merely provides the conclusion of this analysis – “[f]orcing Evonik to continue competing with its own patented technology would impose a weighty hardship under the circumstances of this case, and would be simply inequitable.”  As to “the circumstances of this case,” it should be noted that, over its eight years (to date), there are nearly 1000 docket entries. 

Finally, for the public interest factor, the Court cited the protection of property rights in favor of Evonik, and, more significantly, rejected Materia’s argument regarding the effect an injunction would have on Materia’s customers.  The Court stated that Materia’s argument was not supported by sufficient evidence.

Lessons for Practice

It appears that Evonik was greatly aided by being able to establish, at trial, discrete facts relevant to an injunction analysis, such as a finding of its unwillingness to license competitors under the patent-in-suit.  Moreover, Evonik was aided by its participation in the lengthy litigation itself as a relevant factor, as it was consistent with its unwillingness to license.  Likely any patent litigant is well served in having and proving consistency in policy, behavior, and relief sought.