Federal Circuit Grants X’s (Twitter) Motion on Patent Injunction

The Federal Circuit has granted a motion by Twitter, Inc., which operates the social media website now known as “X,” for summary affirmance of a lower court’s dismissal of VidStream’s attempt to obtain a preliminary injunction in a patent infringement dispute.

As explained in a previous order,

Original plaintiff Youtoo Technologies LLC filed this action against Twitter for patent infringement. Twitter moved to dismiss under Rule 12(b)(6), arguing that the patents were addressed to unpatentable subject matter under 35 U.S.C. § 101. … The Court eventually granted the motion to dismiss. … A somewhat complicated process followed. Twitter filed for inter partes review with the Patent Trial and Appeal Board. Eventually, the IPR proceedings were resolved in favor of Youtoo. … Meanwhile, Youtoo went into bankruptcy. During the bankruptcy process, VidStream acquired the rights to the patents-in-suit.

VidStream is a non-practicing entity (NPE). i.e., it doesn’t make products covered by its patents.

Section 101 states a patent can be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

Not “all improvements in computer-related technology are inherently abstract,” but where claims “simply [add] conventional computer components to well-known business practices,” courts have held they are directed toward an abstract idea “because computers are merely invoked as a tool.”

The two patents-in-suit are U.S. Patent Nos. 8,464,304 (the “'304 Patent”) and 8,601,506 (the “'506 Patent”). The '304 Patent addresses a Content Creation and Distribution System (“CCDS”) for “collecting video data from a user, converting that video into the desired format, and distributing the converted video to a distributor.”

The latest order was in response to Vidstream seeking an injunction to stop X/Twitter from distributing user-generated videos on its social media platform.

VidStream challenged the lower court’s refusal to grant the injunction based on the argument that “the district court here simply had no discretion to require additional harm beyond ongoing infringement VidStream established.”

The Federal Circuit noted that

VidStream’s argument clearly runs afoul of the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393 (2006), which rejected such a “broad” and “categorical rule” in deciding motions for injunctive relief in the context of patent infringement.

In 2011, the Federal Circuit noted in the case of Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 “that eBay jettisoned the presumption of irreparable harm” and “abolishe[d] our general rule that an injunction normally will issue when a patent is found to have been valid and infringed”).

Prior to the eBay decision, it was relatively easy for a patent owner to get an injunction after a finding of patent infringement "absent exceptional circumstances."

In eBay, the Supreme Court held that traditional principles of equity were applied when deciding whether to grant an injunction. Now, a patent-owner plaintiff must show the following to get an injunction against the unauthorized use or sale of a patented invention:

1. that it has suffered irreparable injury,
2. that remedies at law (e.g., monetary damages) are inadequate,
3. that a balancing of hardships favors a grant of injunction and
4. that the public interest would "not be disserved" by the grant of a preliminary injunction.