“A preliminary injunction is an extraordinary remedy, the exception rather than the rule.” Free the Nipple-Fort Collins v. City of Fort Collins, Colorado, 916 F.3d 792, 797 (10th Cir. 2019) (quotation marks and citation omitted). Irreparable harm is one of the requirements for a preliminary injunction.

In cases of patent infringement, irreparable harm may encompass different types of losses that are often difficult to quantify, including lost sales and erosion in reputation and brand distinction. Douglas Dynamics, LLC v. Buyers Products, Co., 7171 F.3d 1336, 1344 (Fed. Cir. 2013).

A patent-holder also may show a risk of irreparable harm by demonstrating that its product competes in a “design wins” market, where original equipment manufacturers (“OEMs”) determine which company will provide a particular component for a generation of a particular finished product. Broadcom Corp. v. Emulex Corp., 732 F.3d 1325,1336 (Fed. Cir. 2013).

But if the patented feature does not drive the demand for the product, then there would be no irreparable harm because the sales would be lost even if the offending feature was absent from the accused product. Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1324 (Fed. Cir. 2012).

“Because [the] plaintiff bears the burden of proof under the preliminary injunction standard, the failure to aver sufficient detail in the factual allegations precludes the issuance of a preliminary injunction.” Soesbe v. Countrywide Home Loans, No. 09-CV-01961-PAB-KMT, 2009 WL 3418212, at *3 (D. Colo. Oct. 20, 2009).

Patented Air Bleed Assembly for Bicycle Forks

In FOX Factory, Inc. v. SRAM, LLC, No. 1:23-cv-00313-RM-KLM (D. Colo. July 17, 2023), Judge Raymond Moore found that the patentee failed to provide sufficient detail to establish irreparable harm for a preliminary injunction.

“FOX asserts that its patent is unique because it locates the air bleed system in a spot that allows the oil in the fork to remain level, without spraying or leaking out,” and accused SRAM of patent infringement. SRAM, however, alleged that its accused forks “expressly designed around” FOX's patent.

To show irreparable harm, FOX relied on the testimony of its executive vice president of the cycling division, Wesley Allinger.

He testified that FOX and SRAM compete in a sort of “design wins” market, and that the company that wins a particular “spec” position gains a certain degree of incumbency advantage, which he referred to as the “stickiness” of spec wins. Mr. Allinger explained that a previous spec win renders the position the winner's to lose. He also noted that since the time that SRAM has allegedly been infringing the FOX patent, FOX has lost a number of spec positions to SRAM. FOX did not deny, however, SRAM's assertion that FOX had already reclaimed at least one of those positions and that it had done so with a fork that lacked the disputed air release valves.

* * *

            Mr. Allinger also offered his opinion, based on admittedly anecdotal evidence, that the SRAM's bleeder valves are popular—he has observed the SRAM forks in use in bike parks and has spoken with other riders. He has also read product reviews in trade magazines. He offered his personal opinion that the bleeder valves are one of the most important features in bicycle forks.

The Court found Mr. Allinger's testimony to be “speculative or anecdotal.”

            In addition to Mr. Allinger's testimony, FOX offered into evidence articles from some of those trade magazines which discussed the popularity of the air bleeder valves. FOX also introduced an interview conducted by Vital MTB in which the interviewer asked an SRAM executive why they had not yet incorporated air bleeder valves into their forks. The SRAM executive responded that they had not done so because of intellectual property concerns which, FOX contends, suggests that SRAM wished to include the feature and recognized its desirability. Finally, FOX offered SRAM's marketing materials which included the air bleeder valves as one of the features they were touting.

While the evidence presented demonstrates that the air bleed valves are a desirable feature on a bicycle suspension, it “fails to demonstrate that they drive either sales or pricing, or if they do, to what extent.”

Furthermore, the Court found that FOX did not demonstrate that any lost sales would “be both certain and great,” and not “merely serious or substantial.” Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1250 (10th Cir. 2001) (quoting A.O. Smith Corp. v. FTC, 530 F.2d 515, 525 (3d Cir.1976)).

And, because “cycling was one of several successful product divisions at FOX,” there was no evidence that lost sales for that department would represent a “great” injury to the company as a whole.

The patent attorneys at Thomas P. Howard, LLC enforce patents and defend against infringement in litigation nationwide including in Colorado.