Bad Faith Required For Preliminary Injunction Against Patent Holder Warning Potential Infringers

In Judkins v. HT Window Fashion Corp. (No. 2007-1434; April 8, 2008), a Federal Circuit panel affirms a district court's denial of a preliminary injunction for an alleged violation of section 43(a) of the Lanham Act which was filed as a counterclaim in response to a claim for patent infringement. HT Window Fashion alleged that Judkins, the patent holder, sent their customers letters stating that HT Window Fashion infringed his patents in bad faith because the Judkins purportedly knew that the patent was unenforceable. The panel agrees that the Judkins' actions did not rise to the level of bad faith for HT Window Fashion to prevail on the section 43(a) claim stemming from a patentee's marketplace activity in support of his patent. Bad faith, in the context of informing potential infringers of a patent and potentially infringing activity, requires that no reasonable litigant could realistically expect to prevail in a dispute over infringement of the patent. In affirming the denial of a preliminary injunction, the Federal Circuit finds that the most significant factor for determining whether a party is entitled to an injunction is the likelihood that the moving party would succeed on the merits. The district's courts reliance on the patent's presumption of validity, even in view of the possibility of inequitable conduct, is not found to be an abuse of discretion.