Asetek V. CMI: Fed. Circ. Guidance On Enjoining Nonparties

By Jason Keener, Fox Swibel Levin & Carroll LLP (May 8, 2017, 1:10 PM EDT) -- "Having your day in court" is a well-known concept that suggests, absent exceptional circumstances such as a temporary restraining order, a court should not issue an injunction curtailing the activities of a company when that company has not had the opportunity to be heard. This concept has a unique impact in determining the scope of a permissible injunction on nonparties. For example, where a plaintiff successfully shows a distributor is selling a product that infringes a valid patent, in many instances (especially involving competitors), the court may enter an injunction prohibiting future sales of the infringing product by the defendant. This injunction will often extend beyond the defendant and apply to agents, servants, employees, attorneys and others who are in active concert or participation with the defendant. The questions arises: How far can the injunction go to prohibit activities by the infringing product's manufacturer, a nonparty who did not yet "have its day in court"? Can the injunction reach the product's manufacturer, and if so, can it enjoin the manufacturer from selling the infringing products to parties other than the defendant?...

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