source means that the sulfuric acid and hydrofluoric acid content of the claimed aqueous cleaning composition comes from the addition of the acids themselves and not from the addition of salts or other compounds. Henkel has demonstrated that Coral's activities with its Clene 100 and ACC-2 products constitute active inducement of infringement.
E. Intervening Rights
45. Pursuant to 35 U.S.C. § 252, there are two doctrines, which are loosely called intervening rights. These two doctrines, however, are distinctly different in bases and result.
46. The first doctrine, sometimes called statutory or absolute intervening rights, is embodied in the first sentence of the second paragraph of § 252. It provides that a reissue patent is effective only as of its reissue date unless the reissue patent contains an infringed claim that is identical to a claim in the original patent. Henkel concedes that there is no identical claim carried over from the '115 patent into the '661 reissue patent and that no damages can be recovered for Coral's activities prior to the date of reissue, May 3, 1988. 35 U.S.C. § 252.
47. The second doctrine, which is called equitable intervening rights, is embodied in the second sentence of the second paragraph of § 252. It is an equitable doctrine based on the balance between: (a) the public interest in the patent system and the remedial purpose of the reissue statute; and (b) the private interest of an infringer who innocently and in good faith has undertaken substantial activities that because of reissue turn out to be infringement. Equitable intervening rights protect parties who in good faith innocently develop and manufacture an invention not claimed by an original patent. Seattle Box Co. v. Industrial Crating and Packing, 756 F.2d 1574, 1579, 225 U.S.P.Q. (BNA) 357 (Fed. Cir. 1985). "[Section] 252 protects third persons who rely on the scope of a claim as originally granted, as against subsequent changes in scope by reissue. " Slimfold Mfg. Co., Inc. v. Kinkead Industries, Inc., 810 F.2d 1113, 1117, 1 U.S.P.Q.2D (BNA) 1563 (Fed. Cir. 1987) (emphasis supplied). The doctrine arose in circumstances where the original patent claims were narrow and the reissue claims were broadened to embrace the infringer's activity for the first time. Of course, in a narrowing reissue as here, the infringer's activities are within the scope of both the original and the narrowed reissue claims.
48. Coral has proffered no evidence to show that it began to manufacture its Clene 100/ACC-2 product in good-faith reliance upon the scope of the original '115 patent. There is no evidence that patent counsel was consulted, or that an opinion was received and relied upon. Coral asserts that it has been manufacturing and selling Clene 100/ACC-2 since 1979, but it concedes that it made the majority of its investments after September 1980 when Coral had notice of the reissue proceedings. Coral has failed to establish any of the prerequisites of equitable intervening rights and thus Coral has failed to demonstrate even prima facie that it has the right to continue to infringe the '661 patent.
49. Where, as here, the reissued claims are significantly narrowed during reissue and the infringer, who was accused of infringing the original patent claims, simply disregards the reissue and continues to infringe, equity does not favor permitting the infringing conduct to continue. In the few decisions considering the application equitable intervening rights to "narrowed reissues," none have actually permitted the relief sought by Coral here, the unabated continued infringement of the reissue patent in question. See, e.g., Wayne-Gossard Corp. v. Sondra, Inc., 434 F. Supp. 1340 (E.D.Pa. 1977), aff'd per curiam, 579 F.2d 41 (3d Cir. 1978); Wayne-Gossard Corp. v. Moretz Hosiery Mills, Inc., 539 F.2d 986 (4th Cir. 1976); White v. Fafnir Bearing Co., 263 F. Supp. 788 (D. Conn. 1966), aff'd, 389 F.2d 750 (2d Cir. 1968).
49A. Courts have held: "The defense of intervening rights is unavailable when claims of a reissue patent are narrowed, rather than broadened." Mendenhall v. Astec Industries, Inc., 13 U.S.P.Q.2D (BNA) 1913, 1948 (E.D. Tenn. 1988), aff'd mem. 13 U.S.P.Q.2D (BNA) 1956 (Fed. Cir. 1989).
50. Equitable intervening rights are inapplicable in this case for another reason. Coral knew that Henkel was seeking the '661 reissue, and it fully participated in those proceedings from the beginning. Nevertheless, Coral continued at its peril to make and sell the accused compositions and to invest in facilities and equipment to further the infringing activity. It may not now complain that it took the risk and lost. See White v. Fafnir Bearing Co., 263 F. Supp. at 811 (investments made while defendant was "fully cognizant at all times of the questionable legal status of [its] conduct" were not made in good faith). Moreover, even before the '661 patent reissued, Coral knew there were non-infringing alternatives to the claimed cleaning compositions of the '661 patent. Despite this knowledge, Coral failed to avoid infringement of the '661 patent once it issued, which infringement continues. As stated in Colt Industries Operating Corp. v. Index Werke KG, 205 U.S.P.Q. (BNA) 990, 1005 (D.D.C. 1979):
Colt's knowledge of the original patent, the reissue application and the proceedings before the Patent Office on the reissue application and the issuance of the reissue, patent and plaintiff's [Colt's] failure to attempt to avoid infringement when the reissue application was filed or when the reissue patent issued, preclude Colt from acquiring any intervening rights.
51. To grant equitable intervening rights to Coral, excusing Coral's future infringement of the claims of the '661 patent would thwart the underlying purpose of § 252 and "would effectively extinguish the rights of the patentee under the guise of protecting the infringer." Wayne-Gossard Corp. v. Sondra, Inc., 434 F. Supp. at 1363.
52. The second factor required to be established by Henkel is that it will suffer irreparable harm if the injunction is not granted. Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1456, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988); H.H. Robertson, Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987).
53. In matters involving patent rights, irreparable harm will be presumed where, as here, a clear showing has been made that the patent is not invalid and that it has been infringed. To hold otherwise would be contrary to the public policy underlying the patent laws. Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1581, 219 U.S.P.Q. (BNA) 686 (Fed. Cir.), cert. denied, 464 U.S. 996, 78 L. Ed. 2d 687, 104 S. Ct. 493 (1983); H. H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987). Henkel has made a clear showing that it will prevail on the validity and infringement issues.
54. The very nature of the patent right is the right to exclude others. The owner of a not-invalid and infringed patent is entitled to the full enjoyment and protection of his patent rights. An infringer should not be allowed to continue his infringement in the face of such a holding. A court should not be reluctant to use its equity powers once a party has clearly established his patent rights. Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1581, 219 U.S.P.Q. (BNA) 686 (Fed. Cir.), cert. denied, 464 U.S. 996, 78 L. Ed. 2d 687, 104 S. Ct. 493, 220 U.S.P.Q. (BNA) 385 (1983). This presumption of irreparable harm derives in part from the finite term of the patent grant, for patent expiration is not suspended during litigation, and the passage of time can work irremedial harm. The opportunity to practice an invention during the notoriously lengthy course of patent litigation may itself tempt infringers. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987).
55. The nature of the patent grant weighs against holding that monetary damages will always suffice to make the patentee whole, for the principal value of a patent is its statutory right to exclude. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987); Hybritech, Inc. v. Abbott Laboratories, 849 F.2d 1446, 1457, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988). While monetary relief is often the sole remedy for past infringement, it does not follow that a money award is also the sole remedy against future infringement. The patent statute further provides injunctive relief to preserve the legal interests of the parties against future infringement which may have market effects never fully compensable in money. As stated in American Home Products Corp. v. Abbott Laboratories, 522 F. Supp. 1035, 1038 (S.D.N.Y. 1981), loss of market share constitutes irreparable injury "because market share is so difficult to recover." If monetary relief were the sole relief afforded by the patent statute then injunctions would be unnecessary and infringers could become compulsory licensees for as long as the litigation lasts. Atlas Powder Co. v. Ireco Chemicals, 773 F.2d 1230, 1233, 227 U.S.P.Q. (BNA) 289 (Fed. Cir. 1985); Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1457, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988); see also Pretty Punch Shoppettes, Inc. v. Hauk, 844 F.2d 782, 784, 6 U.S.P.Q.2D (BNA) 1563 (Fed. Cir. 1988) (trial court improperly focused on defendant's statement that she would be able to meet any damages due plaintiff).
55A. Patent rights do not get weaker as they near the end of their 17 year term. Atlas Powder Co. v. Ireco Chemicals, 773 F.2d 1230, 1234, 227 U.S.P.Q. (BNA) 289 (Fed. Cir. 1985) ("Patent rights do not peter out as the end of the patent term, usually 17 years, is approached.") The '661 patent with four remaining years of life is as entitled to injunctive relief as a newly issued patent.
55B. A patentee is not required to litigate against all his potential infringers simultaneously. Jamesbury Corp. v. Litton Industrial Products, Inc., 839 F.2d 1544, 1553, 5 U.S.P.Q.2D (BNA) 1779 (Fed. Cir.), cert. denied, 488 U.S. 828, 109 S. Ct. 80, 102 L. Ed. 2d 57 (1988); Studiengesellschaft Kohle v. Eastman Kodak Co., 616 F.2d 1315, 1330 (5th Cir.), cert. denied, 449 U.S. 1014, 66 L. Ed. 2d 473, 101 S. Ct. 573, 208 U.S.P.Q. (BNA) 88 (1980). The existence of additional infringers does not justify Coral's continuing illegal conduct.
55C. When considering whether the patentee will suffer irreparable harm if a preliminary injunction to halt further infringement is denied, a period of delay before the patentee brought his motion is only one factor in the context of the totality of the circumstances. Whistler Corp. v. Dynascan Corp., 1988 U.S. Dist. LEXIS 14956, 9 U.S.P.Q.2D (BNA) 2087, 2088 (N.D. Ill. 1988). Hybritech, Inc. v. Abbott Laboratories, 849 F.2d 1446, 1457, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988). In patent cases only a considerably lengthy delay in filing for an injunction in combination with other facts indicating a lack of harm might warrant a conclusion that the patentee has not established a likelihood of irreparable harm. "The majority of infringement cases where preliminary injunctive relief has been denied involved delays of more than one year." Whistler Corp., 9 U.S.P.Q. 2d at 2088.
55D. The relative size of a patent infringer should not alone serve as a basis for enjoining or refusing to enjoin continued infringement by that infringer. Windsurfing International, Inc. v. AMF, Inc., 782 F.2d 995, 1003, 228 U.S.P.Q. (BNA) 562 (Fed. Cir.), cert. denied, 477 U.S. 905, 106 S. Ct. 3275, 91 L. Ed. 2d 565 (1986).
56. The Court concludes, based on the evidence presented, that Henkel will be irreparably harmed if an injunction is not granted and Coral is permitted to continue to sell its low temperature aqueous acidic aluminum can cleaning products Clene 100/ACC-2.
BALANCE OF HARDSHIPS
57. The third factor required to be considered by this Court in its determination whether to award an injunction at this stage of the proceedings is the balance of hardships. This Court must balance the harm that will occur to the moving party from the denial of the preliminary injunction with the harm that the non-moving party will incur if the injunction is granted. Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1457, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988); H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed. Cir. 1987).
58. The magnitude of the threatened injury to the patent owner is weighed, in the light of the strength of the showing of likelihood of success on the merits, against the injury to the accused infringer. Henkel has demonstrated that the threatened hardship and injury to Henkel, if an injunction is not granted, outweighs any alleged hardship and injury to Coral if the injunction is granted. Pittway v. Black & Decker, 667 F. Supp. 585, 592 (N.D.Ill. 1987). Henkel will continue to suffer lost sales and market share and lost opportunities to expand its business in related product areas. Coral, on the other hand, asserts that the loss of 10-25% of its business will devastate the company. However, Coral's alleged harm is self-inflicted.
One who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.
Windsurfing Int'l, Inc. v. AMF, Inc., 782 F.2d 995, 1003 n. 12, 228 U.S.P.Q. (BNA) 562 (Fed. Cir. 1986). This is especially true where Coral has admitted that a viable non-infringing alternative is available, and the switch to such alternative will not involve any significant change in production facilities or personnel.
59. The fourth factor that must be considered by this Court in determining whether to issue the injunction is the impact of the injunction on the public interest. Typically, in a patent infringement case, although there exists a public interest in protecting rights secured by valid patents, the focus of the district court's public interest analysis should be whether there exists some "critical public interest that would be impaired by the grant of preliminary relief." Hybritech, Inc. v. Abbott Laboratories, 849 F.2d 1446, 1458, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988). The Court, where relevant, should take into account both the possibility of harm to other interested persons from the grant or denial of the injunction, and the public interest. Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579, 219 U.S.P.Q. (BNA) 686 (Fed. Cir.), cert. denied, 464 U.S. 996, 78 L. Ed. 2d 687, 104 S. Ct. 493, 220 U.S.P.Q. (BNA) 385 (1983).
60. The protection of patents furthers a strong public policy which is advanced by granting preliminary injunctive relief when it appears that, absent such relief, patent rights will be flagrantly violated. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 391 (Fed. Cir. 1987); Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1581, 219 U.S.P.Q. (BNA) 686 (Fed. Cir.), cert. denied, 464 U.S. 996, 78 L. Ed. 2d 687, 104 S. Ct. 493, 220 U.S.P.Q. (BNA) 385 (1983) (public policy favors protection of the rights secured by the valid patents). "In patent cases protection usually requires immediate injunctive relief . . . protecting patents from would-be infringers is always acting in the public interest." Pittway v. Black & Decker, 667 F. Supp. 585, 593 (N.D. Ill. 1987). If a patentee cannot rely on its patent to exclude others the "research and development budgets in the science and technology based industries would shrink, resulting in the public no longer benefitting from the labors of these talented people." E.I. DuPont deNemours & Co. v. Polaroid Graphics Imaging, Inc., 706 F. Supp. 1135, 1146 (D. Del.), aff'd mem., 887 F.2d 1095 (Fed. Cir. 1989). This is such a case.
61. The Court concludes that there is no critical public interest that would be impaired by the grant of preliminary relief and that the public interest favors the grant of a preliminary injunction.
61A. Any Conclusion of Law entered herein that may be considered in whole or in part as a Finding of Fact and any Finding of Fact entered herein that may be considered in whole or in part as a Conclusion of Law shall be so deemed and treated, as if set forth under the appropriate headings above.
62. Where, as here, Henkel has shown that it is likely to succeed on the merits; that it will suffer irreparable harm if preliminary relief is not granted; that the balance of hardships tilts in favor of Henkel; and that the public interest is best served by enforcing a valid United States patent, a preliminary injunction should issue. Therefore, a preliminary injunction shall issue against Coral enjoining it, and its officers, agents, employees, and attorneys, and those acting in concert or participation with Coral who receive notice of the injunction, from further infringement of the '661 patent.
CONCLUSION AND ORDER
Considering all of the foregoing the Court has determined that the plaintiff, Henkel Corporation has shown that it has a valid patent that it has a right to defend, and that in pursuit of this right against the defendant, Coral, Incorporated, plaintiff will suffer irreparable harm if the preliminary relief sought herein is not granted. The Court has further determined that the balance of hardships tilts in favor of the plaintiff, and that the public interest will best be served by the immediate enforcement of plaintiff's rights under such patent through a preliminary injunction. Now, therefore, it is the conclusion and order of this Court that a preliminary injunction issue forthwith against Coral, Incorporated enjoining it, and its officers, agents and assigns, and those acting in concert or participation with the defendant who receive notice of this injunction, from further acts of infringement of the United States Patent No. Re. 32,661.