Prospective Compensation in Lieu of a Final Injunction in Patent and Copyright Cases
Prospective Compensation in Lieu of a Final Injunction in Patent and Copyright Cases
H. Tomas Gomez-Arostegui
Recommended Citation H. Tomas Gomez-Arostegui, Prospective Compensation in Lieu of a Final Injunction in Patent and Copyright Cases, 78 Fordham L. Rev. 1661 (2010). Available at: http://ir.lawnet.fordham.edu/flr/vol78/iss4/2
In a 2006 decision, eBay Inc. v. MercExchange, L.L.C., the U.S.
Supreme Court held that traditionalequitablefactors apply to injunctions
in patent and copyright cases, and therefore the merefact that a defendant
has infringed a patent or a copyright does not necessarily mean a final
injunction must issue. In the three years since, lower courts have denied
final injunctions more frequently than before and are now struggling with
what relief, if any, to give prevailing plaintiffs in lieu of an injunction.
Some courts permit plaintiffs to sue again later. But most award
prospective relief to plaintiffs-sometimes a lump-sum damages award or
more commonly a continuing royalty--to compensate plaintiffs for the
defendant's anticipatedpostjudgment infringements. Plaintiffs often object
to prospective-compensationawards as constitutingcompulsory licenses.
This Article demonstrates thatfederal courts lack the authority, in either
law or equity, to award prospective compensation for postjudgment
copyright or patent infringements. Until Congress creates a new form of
compulsory licensing,future-damage awards and continuing royalties can
be granted in lieu of a final injunction only by consent of the parties. This
Article reaches its conclusion only after undertaking the most
comprehensive treatment of the subject to date. Apartfrom surveying the
relevant statutory texts, it relies on a historical review offuture-damage
and continuing-royaltyjurisprudence in England and the United States
from 1660 to the present.
* Associate Professor of Law, Lewis & Clark Law School. Copyright H. Tomfs
G6mezArostegui 2009. Special thanks to Ed Brunet, Brienne Carpenter, Jeffrey Graubart, Mark
Leeming, Lydia Loren, Susan Mandiberg, and Joe Miller for their comments on earlier
versions of this paper. This Article also benefited from comments received during
presentations at Lewis & Clark Law School, the Northwest Junior Faculty Conference at
Willamette University College of Law, and the 62nd Annual Meeting of the Southeastern
Association of Law Schools. Seneca Gray, Lisa Janicki, and Damien Munsinger provided
A word on terminology: The phrase "common law" appears numerous times in this
Article, and the reader should be made aware upfront that its meaning often changes
depending on the context in which I use it. In some cases, I use it to mean decisional or
judge-made law, as contrasted from legislative enactments. Yet in other cases I use it as a
shorthand for the practices of the common-law courts, as opposed to equity.
TABLE OF CONTENTS
I. INTRODUCTION .................................................................................... 1663
II. MOVING AWAY FROM FINAL INJUNCTIONS ....................................... 1666
III. ALTERNATIVES TO A FINAL INJUNCTION ......................................... 1669
A. Supreme Court Guidance....................................................... 1669
B . Post-eBay Cases..................................................................... 1672
1. Continuing Royalties for Future Infringements ............... 1672
2. Lump-Sum Damages for Future Infringements ............... 1674
3. New Actions for Future Infringements ............................ 1676
IV. No EXPRESS STATUTORY GRANT .................................................... 1677
A. The CopyrightAct of 1976 ..................................................... 1678
B. The PatentAct of 1952 ........................................................... 1682
C. FederalRule ofCivil Procedure62 ....................................... 1684
V. FEDERAL COMMON LAW ................................................................... 1684
A. Legal Remedies: GeneralCommon Law in 1952/1976......... 1685
1. The "When" To Consider ................................................ 1686
2. The "What" To Consider ................................................. 1687
3. Affirming the Approach ................................................... 1688
B. EquitableRemedies: English Equity in 1789 ........................ 1690
1. The Judiciary Act of 1789 ................................................ 1691
2. Reaffirming the Relevance of English Equity ................. 1692
VI. PROSPECTIVE COMPENSATION IN ENGLAND .................................... 1696
A . At Comm on Law ..............................1.6.96...........
B . In Equity ...................................1.6.99...........
VII. PROSPECTIVE COMPENSATION IN THE UNITED STATES ................. 1708
A. The Default BarAgainst FutureDamages............................. 1708
B. PropertyLaw-PermanentWrongs........................................ 1712
1. State Common Law .......................................................... 1713
2. Federal Common Law ...................................................... 1718
C. Copyrightand Patent Cases ................................................... 1720
1. Cases Decided Before 1952 ............................................. 1720
2. Cases Decided Between 1952 and 1976 .......................... 1724
3. Cases Decided After 1976 but Before eBay..................... 1726
D. The InapplicabilityofAntitrustRemedies .............................. 1727
VIII. THE STANDARD FOR INJUNCTIVE RELIEF REDUX ......................... 1728
IX . CONCLU SION .................................................................................... 1730
In eBay Inc. v. MercExchange,L.L. C.,' the U.S. Supreme Court held that
traditional equitable factors apply to injunctions in patent and copyright
cases, and therefore the mere fact a defendant has infringed a patent or a
copyright does not necessarily mean a final injunction should issue.2 The
decision altered long-settled expectations. In the three years since eBay,
lower courts have denied final injunctions more frequently than before and
are now struggling with what relief, if any, to give prevailing plaintiffs in
lieu of an injunction. Some courts permit plaintiffs to sue again. But most
award prospective compensation-sometimes a lump-sum damages award
or more commonly a continuing royalty-for future, postjudgment
infringements. Courts often do so over the objection of plaintiffs and
sometimes over the objection of infringers, thereby effectively creating a
In the absence of a final injunction, many plaintiffs would prefer the
option of suing the defendant again. A subsequent suit might strengthen the
possibility of a willful-damages award, if the plaintiff could not previously
make one out, or ensure that the plaintiff will be entitled to a jury trial under
the Seventh Amendment for past damages rather than receive a bench trial
for prospective compensation (which is the route judges most often take).
Other plaintiffs fret that prospective awards destroy their ability to
exclusively license their rights to others. And at bottom, many would
simply prefer to determine the license terms of their patents without the
specter of compulsion by the court, even if lacking the leverage of a final
injunction. License terms are often interdependent and negotiating them is
much more complex than simply setting a royalty rate.
Defendants might also prefer that damages for future infringements be
heard by a jury in a separate suit, rather than by the trial judge. They might
favor compulsion-free negotiations, much as some plaintiffs would. But
defendants also have their own concerns at stake. For one, they might
disfavor lump-sum awards because of the possibility their infringements
will end sooner than expected. Many also prefer placing the onus on the
plaintiff to sue again-which in the best of worlds might never come to
pass--rather than being prospectively bound to pay for future
infringements. And though they would be loath to argue the point openly,
some defendants would sooner face a money judgment for past damages,
which typically would not be subject to a contempt sanction, than an
equitable decree for prospective compensation, which ordinarily would be.
In the wake of eBay and its progeny, scholars have begun to closely
examine the circumstances under which trial courts should grant final
1. 547 U.S. 388 (2006).
2. Id. at 394. eBay involved patents, but the U.S. Supreme Court incorporated
copyrights into its opinion by referring to some of its prior copyright decisions. See infra
injunctions, particularly in patent cases. 3 Some have also opined on how
courts ought to calculate or structure an award of future compensation in
lieu of a final injunction.4 Largely absent from the literature, however, is an
examination of whether federal courts actually have the authority to award
compulsory prospective compensation in lieu of a final injunction.
With few exceptions, 5 scholars and judges have assumed the courts do.
Their assumptions are understandable, given that several court decisions,
both pre- and post-eBay, have approved continuing royalties and lump-sum
damage awards in copyright and patent cases. But none of those decisions
has been rigorously questioned, and many proceed on unfounded
assumptions. Indeed, when one examines those decisions closely,
considering their lack of precedent and reasoning, it becomes apparent that
they constitute a radical departure from federal court remedial authority.
The principal aim of this Article is to demonstrate that federal courts
have no authority to award compulsory prospective
compensationwhether a continuing royalty or a lump-sum damages award-for
postjudgment copyright and patent infringements. Future-damage awards
and continuing royalties can be granted in lieu of an injunction only by
consent of the parties. Federal courts cannot impose these remedies on
plaintiffs or on defendants. Only Congress can create compulsory licenses
of this nature. Thus, a plaintiff who succeeds on the merits of her case but
who fails to obtain a final injunction must be allowed to periodically sue for
any subsequent infringements, if she so chooses. A defendant can also
refuse the granting of prospective compensation in lieu of a final injunction.
An incidental aim of this Article is to reveal that once the remedial
authority of the federal courts is properly understood, courts will discover
that in many of the cases where they denied final injunctions, they probably
should have granted them.
This Article proceeds in several parts. Part II describes how the Court's
decision in eBay has triggered a monumental shift in the way courts think
about final injunctions in copyright and patent cases. Part III then explores
the possible alternatives to granting a final injunction-viz., continuing
royalties, lump-sum awards, and successive actions-and focuses on their
implementation in cases decided after eBay. In the same section, I
demonstrate that the Supreme Court has yet to opine on the matter in a
conclusive way and that the Court thus remains free to consider the issue.
Given eBay's growing progeny, it seems likely that litigants will ask the
Court to do so in the near future.
Parts IV and V then turn to the first principles of my thesis-principles
that many courts have neglected. The ability of federal courts to grant relief
arises from two sources. The first is by an express statutory grant from
Congress. Part IV demonstrates that neither the Copyright Act of 1976 nor
the Patent Act of 1952 expressly authorizes the sort of prospective relief
that lower courts have granted in lieu of a final injunction. The second
source remains decisional law. It sets the default reach of a court's
remedial powers, and courts may use it to fill the interstices of a statute.
Part V explains, however, that not any judge-made law will do. The
Supreme Court has stated that a federal court cannot import a legal remedy
from the common law into a reticulated statutory scheme unless that
remedy was widely recognized at the time the statute was enacted. The
Court's approach for incorporating equitable remedies into a statute is even
more restrictive. A federal court's default equitable powers are limited to
the remedies the English Court of Chancery administered circa 1789--the
date our federal judiciary was founded.
Parts VI and VII then review prospective compensation in England and
the United States at common law and in equity from 1660 to the present.
Starting with England first, Part VI demonstrates that prospective
compensation for future infringements, which some courts have wrongly
characterized as a legal remedy, was not recognized at common law in
England. The common law specifically prohibited future-damage awards
when the claim at issue was a continuing tort subject to recurring causes of
action. Part VI then reveals that postjudgment damages for continuing
wrongs only became available in England by statute in 1858, and as a
matter of equity practice, not common law. Prospective compensation
should therefore be classified as an equitable remedy and subject to the
more restrictive review for incorporating remedies. The section concludes
by demonstrating that the compulsory licenses awarded by federal courts
today are ultra vires because they were unknown in the Court of Chancery
Part VII then turns to American law. I begin by identifying in our
common law the same bar against future damages for continuing wrongs.
Though the cases later permitted prospective compensation for certain types
of real-property invasions, that case law fits poorly into the patent and
copyright statutes. Moreover, the remedy developed largely in equity,
thereby again confirming that U.S. decisional law decided long after 1789 is
immaterial in determining the default equitable remedies of the federal
courts. I conclude my review by considering several patent and copyright
cases that courts and commentators believe authorize imposing a continuing
royalty in lieu of an injunction. Those decisions, even if relevant, do not
assist courts because they are either inapposite, came after the enactment of
the statutes, or did not represent the general state of the common law.
Lastly, Part VIII shows that once the remedial history and authority of
the federal courts are correctly understood, it becomes evident that many
post-eBay decisions that have denied plaintiffs a final injunction constitute
an abuse of discretion. Most courts deny final injunctions because they
believe that they are authorized to impose prospective compensation in lieu
of an injunction and that such compensation therefore constitutes an
adequate remedy at law. Neither premise is correct.
II. MOVING AWAY FROM FINAL INJUNCTIONS
Until very recently, a plaintiff who succeeded on the merits in a patent or
copyright case, and who also demonstrated it was possible the defendant
would infringe in the future, nearly always received a final injunction.
Denials were usually left to cases where there was no threat of future
infringement; 6 the plaintiff had disentitled herself to equitable relief, such
as through undue delay or estoppel; 7 the amount the defendant had taken
was relatively de minimis;8 or the public welfare counseled against a final
injunction. 9 The inadequacy of the remedies at law, which is often said to
be the sine qua non of an injunction, rarely determined an injunction
request on its own, largely because federal courts presumed that factor as a
matter of law.' 0 Nor did the balance of hardships matter. Defendants were
thought to have reaped what they had sown.1
The U.S. Court of Appeals for the Ninth Circuit expressed these
sentiments in the copyright context when it stated that "as a general rule, a
copyright plaintiff is entitled to a permanent injunction when liability has
been established and there is a threat of continuing violations."'1 2 In patent
cases, the Federal Circuit similarly held that a final injunction will issue
once infringement and validity of the patent have been adjudged, absent
exceptional circumstances to protect the public interest. 13
In 2006, the Supreme Court's decision in eBay squarely rejected the
Federal Circuit's rule, stating in a brief opinion that a plaintiff seeking a
final injunction, even in a patent case, must satisfy the following
"wellestablished" test for an injunction:
A plaintiff must demonstrate: (1) that it has suffered an irreparable
injury; (2) that remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that, considering the balance
of hardships between the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not be disserved by a
permanent injunction. 14
10. Cf, e.g., Cadence Design Sys., Inc. v. Avant! Corp., 125 F.3d 824, 827-28 (9th Cir.
1997) (discussing preliminary injunctions).
11. Id. at 829-30. Early on, federal judges in Pennsylvania were more inclined to
dismiss patent suits in equity on the ground that the plaintiff had an adequate remedy at law,
see Sanders v. Logan, 21 F. Cas. 321, 323 (C.C.W.D. Pa. 1861) (No. 12,295), or to deny
injunctions without dismissing the suit on the ground that the defendant would suffer a
severe hardship, see Elec. Smelting & Aluminum Co. v. Carborundum Co., 189 F. 710, 712
(C.C.W.D. Pa. 1900); McCrary v. Pa. Canal Co., 5 F. 367, 368 (C.C.E.D. Pa. 1880).
12. Universal City Studios, Inc. v. Sony Corp. of Am., 659 F.2d 963, 976 (9th Cir.
1981), rev'd on other grounds, 464 U.S. 417 (1984); accord Harolds Stores, Inc. v. Dillard
Dep't Stores, Inc., 82 F.3d 1533, 1555 (10th Cir. 1996); Olan Mills, Inc. v. Linn Photo Co.,
23 F.3d 1345, 1349 (8th Cir. 1994); Walt Disney Co. v. Powell, 897 F.2d 565, 567 (D.C. Cir.
1990); Pac. & S. Co. v. Duncan, 744 F.2d 1490, 1499 (11 th Cir. 1984).
13. KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1524 (Fed. Cir. 1985).
In 1992, Ralph Brown noticed that final injunctions were granted so often as "a matter of
course" that Donald Chisum did not even bother to discuss them in his comprehensive
multivolume treatise on the law of patents. See Ralph S. Brown, Civil Remedies for
IntellectualPropertyInvasions: Themes and Variations, LAW & CONTEMP. PROBS., Spring
1992, at 45, 56 (1992). Even the 1999 edition of Chisum's treatise contained only two
sentences on the topic. See 7 DONALD S. CHISUM, CHISUM ON PATENTS § 20.04, at 20-761,
14. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (citing Amoco Prod.
Co. v. Gambell, 480 U.S. 531, 542 (1987); Weinberger v. Romero-Barcelo, 456 U.S. 305,
311-13 (1982)). Remedies scholars have questioned whether this four-factor test was in fact
well established. Many had never heard of it and were more accustomed to seeing a
threefactor test at the final-injunction stage. See generally Tracy A. Thomas, eBay Rx, 2 AKRON
INTELL. PROP. J. 187, 190-91 (2008). I would add one further observation. Strangely, the
Court used the past tense when describing factors (1) and (by incorporation) (2)-a blunder
perhaps. Courts award injunctions to prevent irreparable harm in the future, not irreparable
harm in the past. Taken literally, the Court's test means that a plaintiff who quickly obtains
a temporary restraining order followed by a preliminary injunction--and who therefore will
not have suffered any palpable harm by the end of the case--will be unable to obtain a final
injunction. See also John M. Golden, The Supreme Court as "Prime Percolator": A
District courts are to exercise their discretion to grant or withhold an
injunction in a manner "consistent with traditional principles of equity."' 5
The Court stressed that it had already reached the same conclusion in
copyright cases: "[We have] consistently rejected invitations to replace
traditional equitable considerations with a rule that an injunction
automatically follows a determination that a copyright has been
infringed." 16 The Court had two cases in mind-New York Times Co. v.
Tasini17 and Campbell v. Acuff-Rose Music, Inc.18 -in which similar
statements were made in dicta. Truth be told, however, those two cases,
(both of which I will turn to in a moment) had little if any impact on
injunction practice in copyright cases.19 Perhaps recognizing as much, the
Court signaled in eBay that courts hearing copyright cases should have
taken, and certainly should now take, its prior dicta more seriously.
eBay has already had the desired effect on final-injunction practice in
patent cases. Courts have begun to deny final injunctions to successful
plaintiffs on grounds ignored in the past. And because the number of
potential reasons for denying final injunctions has expanded, the relative
number of denials has increased.
To begin with, the balance of hardships has found a renewed vitality.
Courts have begun to pay closer attention to the difficulties an adjudged
infringer will endure if the court issues a final injunction. 20 But more
importantly, courts are now also denying final injunctions because they no
longer presume that all remedies at law are inadequate. This "categorical"
presumption has been discarded in many cases,2 1 and defendants have
sometimes convinced courts that plaintiffs have an adequate remedy at law
for future infringements in the form of future damages or continuing
royalties. A judge in one case stated, for instance, that "given the fact there
are damages available and future damages available, it doesn't seem
Prescriptionfor Appellate Review of Questions in Patent Law, 56 UCLA L. REv. 657,
695-96 (2009) (also questioning this language).
15. eBay, 547 U.S. at 394.
16. Id. at 392-93 (citations omitted).
17. 533 U.S. 483, 505 (2001).
18. 510 U.S. 569, 578 n.10 (1994).
19. Accord 2 PAUL GOLDSTEIN, GOLDSTEIN ON COPYRIGHT § 126.96.36.199, at 13:42 (3d ed.
Supp. 2008). Several cases had acknowledged these decisions. Most involved preliminary,
rather than final, injunctions, and none actually denied or directed the denial of an injunction
to a plaintiff who had succeeded on the merits. E.g., Video Pipeline, Inc. v. Buena Vista
Home Entm't, Inc., 342 F.3d 191, 207 (3d Cir. 2003); Suntrust Bank v. Houghton Mifflin
Co., 268 F.3d 1257, 1265, 1276 (11th Cir. 2001); Sony Computer Entm't, Inc. v. Connectix
Corp., 203 F.3d 596, 608 n.1 1 (9th Cir. 2000); Infinity Broad. Corp. v. Kirkwood, 150 F.3d
104, 111-12 (2d Cir. 1998); Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 932 n.19
(2d Cir. 1994).
20. E.g., z4 Techs., Inc. v. Microsoft Corp., 434 F. Supp. 2d 437, 442-44
21. E.g., Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197,
(C.D. Cal. 2007)
; MercExchange, L.L.C. v. eBay, Inc., 500 F. Supp. 2d 556,
(E.D. Va. 2007)
. I have argued elsewhere that decisions discarding the presumption in
copyright cases are erroneous. See G6mez-Arostegui, supra note 3, at 1207-10.
[A] compulsory license [will] adequately compensate" the
Another judge held that a plaintiffs future losses could "be
remedied via monetary damages."
Even when final injunctions are granted, some courts are reaching that
decision only after seriously considering whether future, lump-sum
damages or ongoing royalties are appropriate. 24
III. ALTERNATIVES TO A FINAL INJUNCTION
Although the Supreme Court signaled in eBay that district courts should
more rigorously screen final-injunction requests, the Court never explained
what lower courts should do if they decide to deny a final injunction to a
plaintiff who has succeeded on the merits. The reluctance to opine on the
matter is understandable, as it was not squarely presented.
A. Supreme Court Guidance
The Supreme Court has, however, offered some guidance on the
subject--sometimes in dissenting opinions, other times in concurring
opinions, and at best always as obiter dicta. Justice Kennedy, for example,
joined by Justices Stevens, Souter, and Breyer, offered one view in his
concurrence in eBay. He suggested that "legal damages" might be an
When the patented invention is but a small component of the product the
companies seek to produce and the threat of an injunction is employed
simply for undue leverage in negotiations, legal damages may well be
sufficient to compensate for the infringement and an injunction may not
serve the public interest.25
Justice Kennedy offers little else. But given his obvious and demonstrated
understanding of the difference between legal damages and equitable
monetary relief,26 we must presume that by using the former he meant to
exclude a continuing royalty, which by its nature can only be equitable. 27
Less clear is whether he meant to exclude a lump-sum award of future
damages in lieu of a final injunction-which is also an equitable remedy (as
I will explain in Parts VI and VII below)-and meant to include only
subsequent actions for past damages. 28
Justice Kennedy's concurrence in eBay is not the only time members of
the Court have suggested that some form of monetary relief might be proper
in lieu of a final injunction. The issue arose prior to eBay in three copyright
cases. In each case, the Court or some of its members stated that a final
injunction may not always be the appropriate way to remedy continuing
infringement. Moreover, the Court, or its members, went further in each of
these cases and suggested that future damages or a continuing royalty might
serve as the most sensible alternative to granting a final injunction.
Alternative relief first arose in Sony Corp. of America v. Universal City
Studios, Inc. 29-commonly known as the Betamax decision. There, the trial
court held that Sony was not directly or secondarily liable for copyright
infringement caused by the use of its videotaping machines. 30 The trial
court further stated that, even if it were to hold Sony liable, the court would
decline to grant a final injunction. 3 1 The Ninth Circuit reversed, finding
that Sony had infringed. 32 It directed the trial court to reconsider whether a
final injunction was proper and declared that an award of future damages or
a continuing royalty might "very well be an acceptable resolution in this
context. '33 The court borrowed this latter suggestion from Melville
Nimmer, who had advocated for it in his treatise on copyright law. 34
On certiorari, the Supreme Court held that Sony was not secondarily
liable for infringement. 35 The outcome mooted any need to discuss whether
a final injunction or an alternative form of relief, such as prospective
compensation, might be appropriate. But four dissenting justices-all of
whom believed Sony probably did infringe and that the majority had
reached the opposite conclusion to avoid a shutdown of the technology by
injunction-opined that "it seem[ed] likely that a broad injunction is not the
remedy that would be ordered."'36 Disclaiming any view on what precise
remedy they would have fashioned in the case, Justice Harry Blackmun
wrote that "an award of damages, or continuing royalties, or even some
form of limited injunction, may well be an appropriate means of balancing
the equities in this case." 37
In Campbell v. Acuff-Rose Music, Inc., the Court briefly addressed the
issue again. The decision is best known for discussing parodic fair use, but
it also stated that the purposes of copyright were "not always best served by
automatically granting injunctive relief when parodists are found to have
gone beyond the bounds of fair use." 38 The Court did not expressly repeat
Justice Blackmun's suggestion in Sony that future damages or a continuing
royalty might be suitable replacements for a final injunction. Rather, the
Court more subtly indicated as much by citing with approval the Ninth
Circuit's decision in Abend v. MCA, Inc.,39 where that court had again
suggested that damages or a continuing royalty might be appropriate.
More recently, in 2001, a majority of the Supreme Court expressly stated,
albeit in dictum, that a continuing royalty might be proper. The issue in
New York Times Co. v. Tasini was whether freelance authors who had
previously published their articles in periodicals could later prohibit
republication in electronic databases. The Court held that they could
because the exceptions for "revisions" under 17 U.S.C. § 201 did not apply.
Responding to a concern that its holding would adversely affect the
availability of digital databases, the Court noted that "it hardly follows from
today's decision that an injunction against the inclusion of these Articles in
the Databases ...must issue." 40 The Court then suggested that litigants,
courts, and Congress could draw on the compulsory-licensing schemes
utilized in other sections of the Copyright Act as an alternative. 4'
Though the Supreme Court's guidance on this subject cannot be cast
aside lightly, none of the aforementioned pronouncements is binding.
Some arose in dissents, others in concurrences, some only by reference, and
the remainder as obiter dicta. Moreover, the Court never once directly
stated that federal courts have the power to impose these prospective
remedies on the parties without their consent. The Court has thus never
directly confronted the issue and it remains free to fully consider what
relief, if any, may be proper in lieu of a final injunction in patent and
B. Post-eBay Cases
Post-eBay courts have utilized three approaches in lieu of granting a final
injunction: (1) continuing royalties; (2) lump-sum future damages; and (3)
successive actions. The continuing-royalty approach is fast becoming the
most popular alternative. Courts award continuing royalties to prevailing
plaintiffs, rather than permitting successive suits, to ensure that defendants
can continue to infringe unmolested, and often courts do so without the
plaintiffs consent. 42 Courts have also awarded lump-sum awards, but this
usually occurs at the request of plaintiffs during trial. Nevertheless, some
judges have indicated that they might award lump-sum damages over the
objection of plaintiffs, to say nothing of a defendant's objection to having to
pay an upfront fee. Lastly, a handful of post-eBay cases have provided for
no alternative relief at all, leaving plaintiffs to sue again periodically as
subsequent infringements occur.
1. Continuing Royalties for Future Infringements
Many courts permit the defendant to infringe the plaintiffs patent or
copyright so long as it pays a continuing royalty. In these cases, the court
orders the defendant to pay an amount per infringing product made or sold,
or a percentage of the defendant's gross revenues from the infringing
product. A continuing royalty is not a sum-certain award. It is instead a
contingent award whose total effect cannot be known until after the court
determines, on some periodic basis after judgment, the number of
postjudgment infringing products the defendant made or sold. An ongoing
royalty is an equitable remedy and has been treated as such by the cases.4 3
Moreover, as a consequence of the in personam nature of the order, the
court retains the power to hold a defendant in contempt for failing to pay a
continuing royalty. 44 This approach differs from an ordinary money
judgment for past damages, which normally would be subject to a writ of
execution or other state-law process rather than coercive contempt. 45
FinisarCorp. v. DirecTV Group, Inc.4 6 illustrates this approach. There,
the plaintiff owned a patent covering a method for communicating over a
satellite. A jury found the defendant had infringed the patent and awarded
$78.9 million in past damages based on a royalty rate of $1.32 per
infringing unit. The court declined to award a final injunction. Finisar did
not practice the invention, and the court took this to mean that Finisar
would not suffer irreparable harm in the absence of a final injunction. 4 7
The court instead granted a "compulsory license," that is to say, the
defendants were ordered to pay for the remaining life of the patent a higher
judge-imposed royalty of $1.60 per infringing unit. 48 Though the court did
not explain the legal basis for this award in a written order, a transcript from
the hearing makes clear that the court had relied on Foster v. American
Machine & Foundry Co.,49 a case I discuss below in Part VII.C.
Not long after Finisar,another judge from the same district ordered an
ongoing royalty. In PaiceLLC v. Toyota Motor Corp.,5° the plaintiff held
patents on hybrid drivetrain technology. The jury found for the plaintiff
and awarded damages for past infringement based on a reasonable royalty
of $25 per infringing vehicle. The district court denied the plaintiff a final
injunction, reasoning that the plaintiff would not suffer irreparable harm
without the injunction and that prospective compensation would be an
adequate remedy. 5 1 The judgment thus stated, "'Defendants are hereby
oOnRgDoiEnRg EroDy,alftoyrotfh$e2r5e.m00aipneinrginlfirfiengoinfgth[eve'h9i7c0le].p' ate5n2t, to pay Plaintiff an
Both sides appealed. The Federal Circuit affirmed the award of a
continuing royalty but remanded for the district court to reevaluate the
royalty rate and provide a reviewable factual basis. 53 Relying on its
previous decision in ShatterproofGlass Corp. v. Libbey-Owens Ford Co.,54
and (incorrectly) on cases where the Supreme Court had approved the use
of royalties for antitrust violations,55 the court held that in some
circumstances "awarding an ongoing royalty for patent infringement in lieu
of an injunction may be appropriate." 56
51. INdo..a2t:*044--C5.V-21 1-DF, 2006 WL 2385139
(E.D. Tex. Aug. 16, 2006)
52. Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1313-14 (Fed. Cir. 2007)
(quoting the district court).
53. Id. at 1315. Paice did not appeal the denial of the final injunction per se.
54. 758 F.2d 613 (Fed. Cir. 1985); see also infra Part VII.C.
55. See United States v. Glaxo Group Ltd., 410 U.S. 52, 59 (1973); see also infra text
accompanying note 421.
56. Paice,504 F.3d at 1314. Concurring, Judge Randall Rader raised concerns over the
compulsory nature of the royalty, suggesting that the trial court should first seek the parties'
permission before setting the rate. Id. at 1316 (Rader, J., concurring). But ultimately, he
Notably, the Federal Circuit also held that the ongoing royalty for future
infringements was an equitable remedy (correctly, I might add) and that
therefore Paice had no Seventh Amendment right to have a jury decide the
royalty rate. 57 This must be contrasted with cases holding that reasonable
royalties for past infringements are subject to the Seventh Amendment's
right to a jury trial. 58
In another recent case, a trial court adopted the royalty approach in lieu
of an injunction over the objection of the infringer. 59 The court denied a
final injunction after weighing the balance of hardships and focusing on the
patent holder's "showing of prospective harm, [and] how that harm may be
remedied."'60 The court then refused the infringer's request that the
patentee file new complaints on a quarterly basis as new infringements
arose. The court sided with the patentee's request to order an ongoing
royalty, which was "merely a nice way of saying 'compulsory license."' 6 1
The parties were ordered to confer on the possible license terms, and the
court indicated it would impose its own terms if the parties failed to agree. 62
2. Lump-Sum Damages for Future Infringements
As another alternative to a final injunction, a court might award the
plaintiff a single lump sum for all future infringements for the life (or a
shorter term) of the patent or copyright. In essence, the defendant would be
purchasing a nonexclusive license to continue the same form of
infringement into the future, subject only to the scope and restrictions
inherent in the doctrines of issue and claim preclusion or any terms set by
the court. The lump-sum approach differs from a continuing royalty in
several respects. The precise dollar amount of the award for all future
infringements is determined once and for all at the time of judgment.
Though the amount, of course, depends on proof that the future acts are
more likely to occur than not, the amount awarded does not depend on
whether those future events actually occur, as it does in the case of a
continuing royalty. Thus, as with any other judgment that awards
lumpsum future damages, we may eventually learn that the amount awarded
overcompensated or undercompensated the plaintiff.
A hybrid form of relief-a lump sum and an ongoing royalty-was
awarded in Innogenetics, N.V. v. Abbot Laboratories6. 3 The jury, after
finding willful infringement, awarded the plaintiff $7 million in damages.
A portion of that amount represented a market-entry fee of $5.8 million,
which contemplated not only past infringements but postjudgment
infringements as well.64 The remaining $1.2 million represented a royalty
for past infringements only. The plaintiff obtained a final injunction. 65
On appeal, the Federal Circuit vacated the injunction because the
defendant had partially purchased a right to infringe. 66 It noted that, in
assessing a market-entry fee, the jury had not been "limited to a period from
the start of infringement to the date of judgment. ' 67 Consequently, the
award of $5.8 million was not for past infringement only. The Federal
Circuit held that "[w]hen a patentee requests and receives such
compensation, it cannot be heard to complain that it will be irreparably
harmed by future sales." 68 The case was remanded for the trial court to
enter a compulsory license for postjudgment sales according to the same
royalty rate set by the jury for past infringements. 69
An award of future compensation in the form of the infringer's expected
profits from future infringements was recently sought in a high-profile
dispute between Mattel, Inc., maker of the Barbie doll, and MGA
Entertainment, Inc., maker of the Bratz dolls.70 On August 26, 2008, a jury
found that MGA had infringed Mattel's copyrights in the Barbie doll. The
jury awarded Mattel $10 million in disgorged profits for the pretrial
infringement. 7 1 Notably, Mattel had also asked during trial for an award of
MGA's future profits, which the jury declined to give. Counsel for Mattel
conceded that such an award would have obviated the need for a final
injunction.72 The trial court eventually granted Mattel a final injunction,
and the case is presently on appeal. 73
In the cases noted above, the plaintiffs sought an award of lump-sum
compensation at trial, perhaps because they preferred it to a final injunction.
The district court did not force it upon them (thought it might be said that
the award might have been forced upon the defendants). But at least one
district judge in the U.S. District Court for the Eastern District of Texas, a
district known for regularly hearing patent suits, has proposed in several
cases that he will ask juries to consider future damages (or continuing
royalties) at trial, even over the objection of a plaintiff,74 in order to
conserve judicial resources in the event he declines to enter a final
injunction at the conclusion of the case:
The parties are hereby advised that the court is considering submitting to
the jury a damages question regarding future damages, such as an ongoing
In many cases, it makes sense to combine consideration of past and
future damages because, to some extent, many of the factors to be
analyzed are similar or even identical. Submission of an issue on an
appropriate ongoing royalty rate, or other appropriate future method of
calculating damages, to the jury may avoid the need for a later bench trial
on this issue, conserving the time and resources of the court and the
The same judge noted in another case that determining future damages or
royalties "in a patent case is no more difficult than the task commonly
performed by jurors in federal and state courts, when asked to calculate loss
of future earning capacity, future medical expenses, future pain and
suffering, or future lost profits. ' '76
3. New Actions for Future Infringements
The last alternative to granting a final injunction is to leave the plaintiff
to sue again as subsequent infringements occur. I have already described
why the parties might prefer this option over a compulsory license. 7 7
z4 Technologies, Inc. v. Microsoft Corp.78 illustrates this approach. After
the jury returned a verdict for the plaintiff, the court, upon finding no
irreparable harm, denied the plaintiffs request for a final injunction. Any
future harm, the court held, "can be adequately remedied through the
recovery of monetary damages." 79 The court then declined to award
prospective damages. Instead, the court ordered the plaintiff to file a new
action to recover whatever damages would accrue from any new,
postverdict infringements. 80
Few courts post-eBay have expressly directed a plaintiff to sue again as
in z4. 8 1 But there exists an analog, and that is where the court denies a final
injunction and does not provide an alternative form of relief. By default, if
the defendant's infringement continues, the plaintiff has no other recourse
than to file another action. This analog appears to have happened in eBay
on remand 82 and in a number of other recent patent and copyright cases. 83
IV. No EXPRESS STATUTORY GRANT
One of the most remarkable things about the cases discussed in Part III
above, and the many other cases I discuss in Parts VI and VII below, is the
courts that award lump-sum damages or a continuing royalty for future
infringements rarely consider, let alone cite, the copyright or patent statutes
for authority. With but few exceptions, the courts granting prospective
compensation never engage in any statutory construction. This is
unfortunate given that litigants and courts should always begin (and must
sometimes end) their analysis with the applicable statute. But it is also
quite revealing. If courts granting continuing royalties believed the statutes
gave them the authority to do so, they would be citing them.
The sections that follow first review the statutes using conventional
statutory interpretation-viz., ordinary meaning and legislative history.
Subsequent sections consider whether federal courts can nevertheless
borrow and incorporate other remedies from the common law. 84 A review
of the statutes demonstrates that neither the Copyright Act of 197685 nor the
FORDHAM LA W REVIEW
Patent Act of 195286 expressly allows prospective compensation. Federal
Rule of Civil Procedure 62 permits courts to impose continuing royalties
after judgment but only while staying an injunction pending an appeal.
A. The CopyrightAct of 1976
The Copyright Act of 1976, as amended, provides no express statutory
basis for granting future compensation for postjudgment infringements.
The provision empowering courts to grant injunctions, for example,
cannot be read to permit an ongoing royalty or lump-sum, future-damages
award in lieu of an injunction. Section 502(a) provides,
Any court having jurisdiction of a civil action arising under this title
may, subject to the provisions of section 1498 of title 28 [which governs
claims against the United States and its proxies], grant temporary and
final injunctions on such terms as it may deem reasonable to prevent or
restrain infringement ofa copyright. 87
First, the section mentions only "injunctions." A lump-sum award for
damages expected from future infringements is not an injunction. Nor is an
order that requires a defendant to pay an ongoing royalty for future
infringements. Both forms of prospective compensation differ from the
prototypical prohibitory injunction, which "restrain[s] a defendant from the
commission or continuance of some act," or the mandatory injunction,
which orders a defendant to "restore things to their former condition. '88
Even if we could classify a prospective money award as an "injunction,"
that type of award would still fall outside the scope of § 502(a). An award
that permits the defendant to continue to infringe the plaintiffs copyright
upon the payment of money can hardly be seen as
"prevent[ing] ... infringement of a copyright. '8 9 But perhaps Congress
meant something more expansive by also using the word "restrain." If a
continuing royalty or lump-sum award is an injunction, for purposes of the
statute, can we characterize such an award as one that "restrain[s]
infringement of a copyright"?
Putting aside for the moment that "restrain" often means "prevent" in its
first sense,90 it also means to keep under control or within limits.9 1 Under
this definition, one can see how a continuing-royalty award (though not a
lump-sum award) might keep infringement under control. The defendant
must pay for each new infringement, and the total amount due will depend
on the number of infringing uses made. But whether a continuing royalty
would actually restrain the number of infringements is a factually intensive
issue. A rate of ten cents a unit (perhaps an entirely reasonable rate) on a
product that carries a profit margin of ten dollars might have no restraining
effect. It would seem, then, at the very least, that a continuing royalty could
only qualify under § 502(a) if it was designed to constrain and in fact would
restrain the infringing uses.
In any case, the point seems moot given that the history of the copyright
laws demonstrates that Congress intended "restrain" to be synonymous with
"prevent." Section 502(a) traces its origins to the first express grant of
injunctive authority in a statute from 1819, which had solely used the word
Be it enacted ... [t]hat the circuit courts of the United States[,] ...
upon any bill in equity, filed by any party aggrieved in any [copyright or
patent case], shall have authority to grant injunctions, according to the
course and principles of courts of equity, to prevent the violation of the
fights of any authors or inventors.., on such terms and conditions as the
said courts may deem fit and reasonable .... 9 2
Subsequent amendments to the basic remedial provision retained similar
language until 1909. 93 In that year, Congress added the word "restrain" as a
miniscule part of its comprehensive overhaul of the copyright laws. Section
36 of the new statute empowered courts to enter injunctions "to prevent and
restrain the violation of any right secured" by the copyright laws.94 The
legislative history of the law makes clear, however, that this change was
considered nonsubstantive. Commenting on a draft bill that contained the
new language, a House Report stated in 1907 that the "third paragraph in
section 29 [which contains the language relevant here and which was
eventually renumbered section 36] practically reenacts [the prior law],"
with the sole exception being new rules on the service of injunctions.
subsequent House Report in 1909
also carried the same commentary. 96
Importantly, the legislative history of the Copyright Act of 1976
demonstrates that Congress did not intend to alter prior law either. 97
compensation" as damages for the infringement. 3 15 Because the Court of
Claims treats the government's conduct as a form of eminent domain
subject to just compensation, 316 and the statute calls for reasonable and
entire compensation, one would have thought the award could include
compensation for infringements anticipated to occur after judgment. The
cases seemingly state the contrary, however. 317 Though they allow
recovery for infringements occurring after the filing of the petition in the
court, the cases have suggested they would not allow recovery for
infringements occurring after final judgment. 318
So how is it that some federal courts have seen fit to order a money
award in patent and copyright cases to compensate for future, postjudgment
infringements? In many cases, probably because the parties did not object.
In most others, it was probably by relying on wrongly decided (albeit
sometimes binding) copyright and patent precedents, a matter I will return
to in Part VII.C. But apart from that, it seems accidental. Courts may
assume that prospective compensation is entirely permissible given that
claims for future damages are not only commonly sought, but commonly
awarded, in a wide variety of tort cases. Indeed, one judge recently
analogized the task of awarding future damages in a patent case to other
torts where, as he noted, jurors are "asked to calculate loss of future earning
capacity, future medical expenses, future pain and suffering, or future lost
profits. '3 19 The problem, of course, is that the analogy is a faulty one. The
judge amalgamated single-wrong torts and continuing torts.
The default rule against future damages for continuing wrongs has two
exceptions. The first can be treated quickly here. Many states now agree
that courts may award damages incurred between the filing of the action
through the time of the trial (and perhaps judgment) regardless of whether
the harm involved stems from a continuing wrong.320
The rule in federal
court is essentially the same under Federal Rule of Civil Procedure 15.
That rule permits parties to amend their complaints, expressly or implicitly,
to conform to the evidence at trial and to file supplemental pleadings during
the case. 32 1 These rules were originally borrowed from equity practice. 322
Because these rules are transsubstantive, courts can, if requested, permit
recovery for wrongs in copyright and patent actions through judgment.3 23
A more important exception-developed in part at law and in part in
equity in cases involving invasions of land or its enjoyment-also affects
continuing wrongs. In limited cases, courts hold that a continuing trespass
or nuisance must instead be labeled and considered "permanent." The
effects of this transformation are usually threefold. First, the claim accrues
once and for all under a statute of limitations when the initial trespass or
wrong occurs or is discovered. This differs from the traditional rule that a
new period of limitations runs for each day the trespass or nuisance is
ongoing. Second, and most relevant for our purposes, a plaintiff is then
permitted to recover future damages for the "permanent" wrong. The award
thus changes from temporary damages-such as the rental value of the
encroachment-to compensation for the change in market value of the
property. And third, as a consequence of the availability of prospective
compensation for future harms, claim preclusion would now bar any
subsequent actions based on the continuation of the conduct.324
The question thus becomes whether the permanency exception for real
property can be incorporated into the copyright and patent statutes and, if
so, in what manner. Can a court declare that a defendant's infringement is
expected to continue indefinitely into the future, that the harm is
"permanent," and that the plaintiff must therefore recover for all future
infringements in one action (rather than be allowed to bring subsequent
actions as the infringements accrue)? Melville Nimmer suggested in 1974,
and David Nimmer continues to suggest today, that the exception can
P. Coal & Iron Co., 53 A. 751, 751-52 (Pa. 1902) (citing 12 PA. STAT. ANN. § 1557 (West
1876)); Comminge v. Stevenson, 13 S.W. 556, 558 (Tex. 1890); Woldson v. Woodhead, 149
P.3d 361, 364-66 (Wash. 2006).
321. FED. R. Civ. P. 15(b), (d).
322. See Providence Rubber Co. v. Goodyear, 76 U.S. (9 Wall.) 788, 800-01 (1869);
MCCORMICK, supra note 301, § 13, at 47, 51-52.
323. E.g., Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1550 (Fed. Cir.
1984); Parker v. Brown & Root, 198 F. Supp. 795, 801 (S.D. Tex. 1961); Solex Labs., Inc. v.
Graham, 165 F. Supp. 428, 438 (S.D. Cal. 1958); Otis Elevator Co. v. 570 Bldg. Corp., 35 F.
Supp. 348, 348-49 (E.D.N.Y. 1940); see also Hynix Semiconductor Inc. v. Rambus, Inc.,
609 F. Supp. 2d 951, 960-61 (N.D. Cal. 2009) (not relying on Rule 15 of the Federal Rules
of Civil Procedure); Calhoun v. United States, 354 F.2d 337, 339-40 (Ct. Cl. 1965) (same).
324. The rules described below relate to compensation at common law. Statutes or
constitutional provisions requiring just compensation for takings of property differ ofcourse.
E.g., Mason City & Ft. D.R. Co. v. Kennedy, 192 F. 538, 539-40 (8th Cir. 1911); Grafton v.
B. & OR. Co., 21 F. 309, 310-11 (C.C.S.D. Ohio 1884).
conceivably apply in this manner, at least with respect to copyright cases. 325
But their suggestions were made in passing and do not withstand scrutiny.
1. State Common Law
The development of the permanency exception has arisen most often in
the context of a statute-of-limitations defense or claim preclusion, but the
first case in the United States to articulate the exception involved the
availability of future damages. Charles McCormick traces the origin of the
exception, commonly known as the "permanent trespass" doctrine, to a
decision of the New Hampshire Supreme Court. In Town of Troy v.
Cheshire Rail Road Co.,32 6 the Town of Troy brought an action at law
against a railroad company that had laid tracks upon highways and bridges,
thereby making them unusable by nonrail conveyances. The defendant
sought to limit the plaintiff's recovery to harms incurred before the filing of
the writ. Though the court agreed with the general bar on postwrit
damages, it carved out an exception in the case:
Wherever the nuisance is of... a permanent character, that will continue
without change from any cause but human labor, there, the damage is an
original damage, and may be at once fully compensated ....
But where the continuance of such act is [not] . . . necessarily of a
permanent character, but may, or may not be . . . continued, there the
ihnajpuprye,nedto. 32b7e compensated in a suit, is only the damage that has
Finding that the railroad was "in its nature[,] design, and use, a permanent
structure, which cannot be assumed to be liable to change," the court ruled
that the future harm to the town was "dependent upon no contingency." 328
The town was permitted to "recover at once their reasonable damages." 329
Because the plaintiff had not sought equitable relief, the first appearance of
this remedy in the United States was at law, rather than in equity.
The permanency exception was limited initially to cases where no
affirmative acts were required to maintain the trespass. Thus, if the
intrusion would continue without further actions by the defendant-as in
Town of Troy--courts might label the tort permanent. 330 But if additional
acts were required for the wrong to persist, then the trespass remained
temporary and continuing. 33 1 McCormick notes, however, that "the
doctrine was [then] extended to situations where the nuisance... flow[ed]
from the defendant's active operation of some factory, plant, or
establishment. '332 The question arose: Under what circumstances should
affirmative, ongoing acts nevertheless be deemed "permanent"?
The most common and traditional answer has been where the defendant
is acting in a public or semipublic capacity and its conduct could have
formed the basis for condemnation proceedings against the plaintiffs
property (had that route been taken). 333 Later, courts went further and
broadened the exception to affirmative conduct done in a wholly private
capacity, so long as that conduct was done for the public welfare. 334 Thus,
in most cases where a court deemed affirmative acts "permanent," the court
was holding not only that the invasion would likely continue but that it
"should continue indefinitely" 335 because the public at large somehow
significantly benefited from the defendant's conduct.
Any attempt to reconcile the cases beyond these contours is all but
impossible. The case law is diverse and often cannot be harmonized even
within the same jurisdiction. 336 These difficulties have led some courts to
follow the lead of the Restatement of Torts and permit plaintiffs in close
cases-i.e., where the permanency of the wrong is debatable--to treat the
defendant's wrong as either continuing or permanent and thereby choose to
seek past damages in successive actions as they accrue or all of their
damages, past and future, in a single action. 337 Charles McCormick
managed to include this approach in the Restatement of Torts in his capacity
as an advisor.3 38 Importantly, the choice to seek prospective compensation
is the plaintiff s, and courts ordinarily cannot force a plaintiff to accept that
type of award if she would prefer to pursue successive actions. The sole
exception recognized by the Restatement is where the defendant is engaged
in an "essential public service. '339
One more point bears mentioning. Though the foregoing lump-sum,
future-damages award first appeared in the United States as a legal remedy,
that characterization is often inappropriate. With some exceptions, most
cases addressing whether to award a plaintiff damages for future wrongs
have been brought in equity, rather than at law. This follows because most
suits involving continuing torts seek injunctive relief, and the issue of
whether to grant future damages arises when the court has declined to grant
a final injunction. 340 The remedy is thus given in lieu of a final injunction,
much as Lord Cairns' Act allowed in England in 1858. Indeed, in many
land cases, courts have ordered lump-sum, future damages with the proviso
that if the defendant does not pay the judgment, the injunction will issue. 34 1
Though it has been said that monetary relief should presumptively be
thought of as a "legal" remedy, 342 the history of prospective compensation
for postjudgment, continuing wrongs in England and the United States
rebuts any such presumption here. At best, courts can characterize a
lumpsum prospective award as legal only if the plaintiff seeks the award from
the outset and never requests an injunction. 34 3 It is therefore more correct,
and not surprisingly most consistent with the English approach, to label
lump-sum awards in lieu of a final injunction as an equitable remedy.
The argument for characterizing continuing royalties in lieu of an
injunction as equitable is even stronger. Apart from the h
) (Oregon law); Cook v. Rockwell Int'l Corp., 358 F. Supp. 2d 1003, 1011-13 (D.
Colo. 2004) (Colorado law); Shults v. Champion Int'l Corp., 821 F. Supp. 517, 519 (E.D.
Tenn. 1992) (North Carolina law); Spaulding v. Cameron, 239 P.2d 625, 628-29 (Cal.
1952); Cox v. Cambridge Square Towne Houses, Inc., 236 S.E.2d 73, 74-75 (Ga. 1977). But
see Schneider, 147 S.W.3d at 281-82 (refusing to allow a plaintiff to elect temporary or
permanent damages); DOBBS, supra note 336, § 57, at 118-19 (criticizing the election
principle); see also Mangini v. Aerojet-Gen. Corp., 912 P.2d 1220, 1230 (Cal. 1996)
(reserving whether to revisit the election right).
338. See RESTATEMENT (FIRST) OF TORTS § 930(1)(b) (1939); MCCORMICK, supra note
301, § 127, at 511-15; Charles T. McCormick, Damagesfor AnticipatedInjury to Land, 37
HARv. L. REv. 574, 596-97 (1924); see also RESTATEMENT (SECOND) OF TORTS § 930(1), (2)
339. RESTATEMENT (SECOND) OF TORTS §§ 930(2) cmt. c, 944 cmt. h (1979).
340. See id. § 951 & cmt. a.
341. E.g., McCleery v. Highland Boy Gold Mining Co., 140 F. 951,954-55 (C.C.D. Utah
1904); Baldwin v. McClendon, 288 So. 2d 761, 766 (Ala. 1974); Boomer v. Atd. Cement
Co., 257 N.E.2d 870, 873 (N.Y. 1970). For a case recognizing as much outside the
realproperty context, see Enplanar, Inc. v. Marsh, 11 F.3d 1284, 1290 n.7 (5th Cir. 1994). The
court held that there could be no award of money damages in lieu of an injunction.
342. See Felmer v. Columbia Pictures Television, Inc., 523 U.S. 340, 352 (1998).
343. Accord Chauffeurs, Local No. 391 v. Terry, 494 U.S. 558, 570-71 (1990); Mitchell
v. Vill. of White Plains, 36 N.Y.S. 935, 936-37 (N.Y. Gen. Term 1895).
shows that no such remedy existed at common law in England or the United
States, and could only conceivably be awarded in equity starting in 1858,
their contingent nature counsels for labeling them as equitable. All money
awards at common law must be made in a single, lump-sum judgment.
Periodic or contingent awards are not permitted. 344 It should thus come as
no surprise that the few American cases granting contingent awards in
property cases were decided in equity. 34 5
So can the permanency exception be incorporated into the copyright or
patent statutes? The Grupo line of cases tells us no. Prospective
compensation is an equitable remedy, and state law therefore has no say in
determining its default availability in federal courts. This means not only
that the law of the forum state is irrelevant, but that the general law of
equity as it exists in the various states is as well. As the Supreme Court has
stated, even though "a State may authorize its courts to give equitable relief
unhampered by" the historical restrictions on equitable remedies, state-law
cases cannot remove those historical "fetters from the federal courts."346
Even if one can consider state decisional law, the confused state of the
law at the time of the patent and copyright statutes in 1952 and 1976 would
make incorporation of the permanency exception difficult to justify. As
Justice Sandra Day O'Connor has explained, "when a significant split in
authority exist[s], it strains credulity to argue that Congress simply assumed
that one view rather than the other would govern. '34 7 If no common themes
can be discerned from case law applying the permanency exception, then
we cannot incorporate it, and only the default common-law bar on future
damages for continuing infringements remains. Additionally, can we really
have expected Congress to have mastered this difficult area of nuisance and
trespass law in preparation for enacting apatent or copyright statute?
Insofar as some themes can be found in the cases, those trends counsel
against using the permanency exception in most infringement cases.
As I have already noted, the exception applies in its most traditional form
if the wrong would continue without any affirmative acts on the part of the
defendant or its agents. Unlike continuing trespasses-which can be (and
often are) committed by failures to undo something once it has already been
done-patent and copyright infringement are typically committed by
continuing affirmative acts. In the prototypical case, the defendant
practices the plaintiffs invention or prints or sells the plaintiffs book into
the foreseeable future. Additionally, the early trespass cases dealt almost
exclusively with actual physical structures. Though one can, of course,
infringe a copyright by constructing a structure protected by architectural
344. See Slater v. Mexican Nat'l R.R. Co., 194 U.S. 120, 128 (1904); United States v.
Bauman, 56 F. Supp. 109, 117 (D. Or. 1943).
345. See, e.g., Sussex Land & Live Stock Co. v. Midwest Ref. Co., 276 F. 932, 948 (D.
Wyo. 1922), affd, 294 F. 597, 609 (8th Cir. 1923); Quality Excelsior Coal Co. v. Reeves,
177 S.W.2d 728, 734-35 (Ark. 1944).
346. Guar. Trust Co. v. York, 326 U.S. 99, 105-06 (1945).
347. Smith v. Wade, 461 U.S. 30, 93 (1983) (O'Connor, J., dissenting).
plans or as an architectural work, that infringement obviously requires
affirmative acts and in some cases is continued by other affirmative acts,
such as the leasing or selling of the structure. 348
Labeling an infringement permanent, for purposes of future damages,
could also have unintended consequences on limitation periods. At present,
the copyright and patent statutes provide for rolling limitation periods that
begin to run from the date of each discrete infringement. 3 49 But if an
infringement is labeled permanent, then many of the property cases have
held that the plaintiff must sue for all damages-from past and future
infringements-once and for all within a certain number of years after the
first original wrong. The claim for entire damages accrues at once. Thus,
after three years of "permanent" copyright infringements, or six years in the
case of patents, the plaintiff would be unable to recover at all. Each new
infringement would not form the basis for a new cause of action. A
plaintiff who misidentified an infringement as temporary, rather than
permanent, would thus run the terrible risk of being completely barred even
where the infringement was ongoing at the time of trial. To suggest that
Congress contemplated such a rule, of course, is absurd. Query whether
courts should be allowed to selectively incorporate some common laws into
a statute but not others. 350
The Restatement of Torts approach would also not support imposing
prospective compensation in lieu of a final injunction on plaintiffs in most
intellectual-property cases. The fact that a court has denied an injunction
because it would not be in the public interest does not necessarily empower
that same court to force a compulsory license on the plaintiff. That avenue
would only be available if the defendant's conduct constituted an "essential
public service." 35 1 And those cases are typically limited to
inversecondemnation analogs. In cases not involving an essential public service,
which will constitute the majority of the cases, the Restatement provides
that it is the plaintiffwho elects in close cases whether to seek permanent
damages or to pursue successive actions. The court cannot force a plaintiff
to take prospective compensation in lieu of a final injunction. The only
party who would have no say in the matter is the adjudged infringer.
2. Federal Common Law
The Supreme Court has decided two land cases that require special
attention because they have been cited by a handful of copyright and patent
decisions as possible authorities for granting prospective compensation. 3 52
The first is New York City v. Pine,353 which involved a nearly completed
dam. The dam diverted water away from the plaintiffs land to increase the
water supply to New York City. The trial court enjoined the city from
diverting the water and held in the alternative that the court had no power in
equity to ascertain and order the payment of future damages in lieu
thereof.3 54 The Supreme Court disagreed and held that the plaintiff's delay
in filing suit, and the public convenience associated with the defendant's
conduct, called for only a conditional injunction. The Court stated that the
trial court should ascertain in equity the damages the plaintiff would suffer
in the future from the dam and then order the defendant to pay the
ascertained sum by a certain date or suffer the injunction previously entered
by the trial court.3 55 Notably, in reaching its conclusion, the Court rejected
an argument that any power in equity to award future damages would have
required legislation similar to Lord Cairns' Act. 356
Pine does not support the current practice in patent and copyright cases
of forcing plaintiffs to take prospective compensation in lieu of a final
injunction. For one, the decision seems to leave the plaintiff the option of
pursuing the defendant at law with successive actions. The Supreme Court
stated that if "the plaintiffs shall prefer to have their damages assessed by a
jury, leave may be given to dismiss the bill without prejudice to an action at
law." 357 Moreover, insofar as Pine held that the trial court could award
future damages in equity for a continuing tort, the case has been fatally
undermined by Grupo Mexicano de Desarrollo, S. A. v. Alliance Bond
Fund, Inc.358 In the absence of legislation, the default equitable powers in
federal court depend on Chancery practice in 1789. The passage of Lord
Cairns' Act and the cases I have already discussed demonstrate that no such
power existed at law or in equity in England until 1858.
The second case is Harrisonville v. W S. Dickey Clay Manufacturing
Co.,359 which some commentators have cited as authority for granting
prospective relief regardless of whether a tort is deemed "permanent" or
not. There, a city's sewage disposal plant had regularly discharged
352. Judges Arthur Gajarsa and Pauline Newman of the Federal Circuit have also cited
these cases in support of awarding enhanced damages in lieu of a final injunction. See In re
Seagate Tech., LLC, 497 F.3d 1360, 1378 (Fed. Cir. 2007) (Gajarsa, J., joined by Newman,
353. 185 U.S. 93 (1902).
354. Id. at 95.
355. Id. at 108.
356. Id. at 107.
357. Id. at 108.
358. See supra text accompanying notes 179-89.
359. 289 U.S. 334, 339-41 (1933).
pollution into a creek since 1923. The plaintiffs farm was seriously
affected, and after five years the plaintiff sued for nuisance in federal court.
Jurisdiction was "based solely on diversity of citizenship," 360 and the lower
court granted a final injunction. The issue before the Supreme Court was
whether the injunction should have issued and, if not, what remedy to order
instead. The city insisted the nuisance was permanent, as that term was
understood under Missouri law, and that the plaintiffs claim had therefore
laicmcrituaetdionsin.36 11923 and was barred under the applicable statute of
The Court held that an injunction could not issue because the city's
sewage plant engaged in a public service. But more importantly, the Court
allowed an award of future damages in lieu of the injunction and held that
whether the nuisance was "permanent" or not was irrelevant for
determining whether a federal court could allow future damages. 362 This
flew in the face of Missouri law, which stated that if a plaintiff was
permitted to recover future damages, the nuisance was permanent. The
statute would have begun to run once and for all in 1923, and the claim
would have been barred. 363 The Court, acting under its pre-Erie powers,
openly ignored Missouri law. "We have no occasion to determine the scope
of the doctrine of permanent nuisance as applied in Missouri; nor need we
consider to what extent the local law on that subject would be accepted as
controlling in the federal courts. ''364
Harrisonville must be ignored for two reasons. First, insofar as it
purports to create a new equitable remedy it fails for the same reasons
already noted with Pine-the remedy was not available in equity in
Chancery circa 1789. Second, given the decision's pre-Eriebasis, it seems
particularly unwise to rely upon Harrisonville when considering what
decisional law we can deem Congress to have incorporated into the
copyright and patent statutes. As Justice Hugo Black explained,
Indulging for the moment the convenient fiction that Congress knows
all about [a pre-Erie] rule and what it means, why should it think that old
rules laid down by this Court and based on the Swift v. Tyson doctrine
could survive our decision in Erie v. Tompkins?365
It is not uncommon for courts (including the Supreme Court) to question
the precedential value of diversity cases decided before Erie.366
Harrisonvilleshould be no exception.
360. Id. at 336.
361. Id. at 337, 340-41.
362. Id. at 339-41.
363. Id. at 341 (describing Missouri common law).
365. Francis v. S. Pac. Co., 333 U.S. 445, 465 (1948) (Black, J., joined by Murphy and
Rutledge, JJ., dissenting).
366. E.g., Bowerman v. Hamner, 250 U.S. 504 (1919), abrogation recognized by
Atherton v. FDIC, 519 U.S. 213, 217-18 (1997); Int'l News Serv. v. Assoc. Press, 248 U.S.
215 (1918), abrogationrecognizedby Columbia Broad. Sys., Inc. v. DeCosta, 377 F.2d 315,
318 (1st Cir. 1967).
It also bears noting that neither Harrisonville nor Pine were decided in
the face of a federal statute that governed the behavior at issue. The Court
therefore did not need to worry about scuttling the views of Congress.
The preceding sections have demonstrated several things. First, a
damage award for postjudgment continuing infringements or wrongs was
never recognized at common law in England. Equity recognized a similar
award in certain cases, but that was not until 1858 and only by an act of
Parliament. Second, a damage award for postjudgment wrongs was also not
recognized at common law in the United States. Though an exception later
developed in the states for "permanent" wrongs, the exception cannot be
incorporated into the patent and copyright statutes because it amounts to an
equitable doctrine that was not recognized in the Court of Chancery in or
around 1789. Even if incorporated, the exception would make for a poor fit
in most copyright and patent cases.
C. Copyrightand Patent Cases
In Part VII.A, I asked why federal courts believe they can impose
continuing royalties on litigants in lieu of a final injunction and I indicated
that the simplest answer was probably because U.S. precedent in copyright
and patent suits permit them to do so. Indeed, scholars and courts have
cited numerous early U.S. copyright and patent cases as support for
awarding a judicially imposed license in lieu of a final injunction. I have
already shown that those cases are irrelevant for determining the default
equitable remedies of federal courts. But even if they are instructive, the
cases are actually of no help. None of the cases appearing before the Patent
Act of 1952 say anything about continuing royalties, let alone that they may
be compulsory. And though one case in 1936 does speak of awarding a
lump-sum award in lieu of a final injunction, that case was an anomaly
intimately associated with the doctrine of patent exhaustion. Moreover, in
the years before the Copyright Act of 1976, two decisions did arise, but
they did not yet represent the "general state" of the common law.
Let us look at those decisions more closely.
1. Cases Decided Before 1952
Take, for example, the case of Electric Smelting & Aluminum Co. v.
Carborundum Co.,367 which one commentator has interpreted as "issu[ing]
a compulsory license. '36 8 The plaintiff patented a process for smelting
ores, and the defendant patented an end-product called carborundum. The
defendant could only make carborundum by infringing the plaintiffs
367. 189 F. 710 (C.C.W.D. Pa. 1900).
368. Jaideep Venkatesan, Compulsory Licensing of NonpracticingPatenteesAfter eBay
v. MercExchange, 14 VA. J.L. & TECH. 26, 37 (2009).
process, and the plaintiff could not make carborundum without infringing
the defendant's patent.369 The plaintiff sued, and in November 1900 the
trial court "granted" an injunction, but made it conditional because of the
blocking patents, the importance of carborundum, and the financial ruin the
defendant would suffer if the injunction issued.370 The court referred the
case to a master for an accounting of the defendant's profits and held that
"'no injunction w[ould] issue until the further order of this court if the
defendant ...file[d] a bond... to secure to the complainant the profits and
damages which [it] may ultimately be decreed to pay."' 3 71
The facts make clear, however, that the case provides no authority for
creating a compulsory license for postjudgment infringements. First,
because of the date the patent expired (in 1902) and the date the final decree
was entered (in 1911), the money award was backward looking. 372 This is
not a case of a court ordering a defendant to pay for infringements that will
occur after judgment. Moreover, nothing in the case suggests that retaining
the case in equity was done against the wishes of the plaintiff. The plaintiff
could very well have preferred this procedure over filing a new action at
law to obtain a backward-looking award of actual damages from a jury.
Consider also the case of Dun v. Lumbermen's CreditAss 'n. 373 The trial
court denied a final injunction because the defendant had taken only a
trifling amount. The court of appeals affirmed, stating that in "such cases
the copyright owner should be remitted to his remedy at law." 374 This must
be understood as requiring the plaintiff to file an action for infringements
after they arise. The Supreme Court's opinion affirming the order supports
this reading: "[W]e think the discretion of the court was wisely exercised in
refusing an injunction and remitting the appellants to a court of law to
recover such damage as they might there prove that they had sustained.'3 75
The same must be said of West Publishing Co. v. Edward Thompson
Co. 376 The trial court denied a final injunction because the plaintiff had
delayed suit for sixteen years and future infringement was unlikely. 377 The
court then refused to retain the case for an accounting of past profits and
ordered the plaintiff to bring an action at law. The Second Circuit affirmed
in part, but held the trial court could have retained the cause under its equity
cleanup jurisdiction to determine the "damages the complainant has
sustained. '378 On remand, the matter was referred to a master to determine
the damages the plaintiff suffered. The parties settled,379 but it seems the
damages would have been retrospective. 3 80
Another commonly cited case is City of Milwaukee v. Activated Sludge,
Inc.381 The trial court permanently enjoined the City of Milwaukee from
operating a sewage plant because of patent infringement. The appellate
court reversed because the plaintiff had delayed in filing suit, and closing
the plant would be against the public interest. The court said little about
what alternative remedy, if any, would be appropriate, other than that "[t]he
damages of appellee may be compensated by a money judgment. '382
Vitamin Technologists, Inc. v. Wisconsin Alumni Research Foundation,383
which some courts and scholars have also cited, says nothing about what
alternative relief may be appropriate when a final injunction is denied. At
most, the appellate court stated in obiter dictum that a trial court can deny a
final injunction to a patent holder when the defendant's use of the patented
process is necessary to ensure public health. In point of fact, the court had
held that the plaintiff's patents were invalid. 384
There is one case that granted a lump sum in lieu of a final injunction,
Curtiss Aerocar Co. v. Springer,385 but it seems to be an unprecedented
extension of patent exhaustion and was an anomaly not seen again. An
explanation of the exhaustion, or first-sale, doctrine helps place the case in
context. Exhaustion occurs when a patentee unconditionally sells or
authorizes the sale of a product that embodies the patented invention. The
purchaser is then permitted, for the useful life of the item, to use it or sell it
to another person even though use and further sale technically constitute
prima facie infringement of the patented component. 386 This
implied-in377. West Publ'g Co. v. Edward Thompson Co., 169 F. 833, 864, 884-85 (C.C.E.D.N.Y.
378. West Publ'g,176 F. at 839.
379. West Publ'g. Co. v. Edward Thompson Co., 184 F. 749, 751 (C.C.E.D.N.Y. 1911).
380. See also Nemey v. N.Y., N.H. & H.R. Co., 83 F.2d 409, 411 (2d Cir. 1936); Am.
Safety Device Co. v. Kurland Chem. Co., 68 F.2d 734, 734-35 (2d Cir. 1934); Blackburn v.
S. Cal. Gas Co., 14 F. Supp. 553, 554
(S.D. Cal. 1936)
; Ballard v. Pittsburgh, 12 F. 783, 786
(C.C.W.D. Pa. 1882); McCrary v. Pa. Canal Co., 5 F. 367, 368 (C.C.E.D. Pa. 1880), affd,
141 U.S. 459 (1891).
381. 69 F.2d 577 (7th Cir. 1934).
382. Id. at 593. The court's use of "judgment" instead of "decree" in this pre-1938
merger case indicates that the court had a judgment at law, rather than a decree in equity, in
383. 146 F.2d 941 (9th Cir. 1944).
384. Id. at 946-47, 956.
385. 81 F.2d 668, 669 (5th Cir. 1936).
386. Adams v. Burke, 84 U.S. (17 Wall.) 453, 456 (1873); Mitchell v. Hawley, 83 U.S.
(16 Wall.) 544, 547 (1872).
law license lasts as long as the particular item does-not necessarily as long
as the patent term-and does not permit later manufacture.
In the late 19th century, courts extended this doctrine to cases where the
initial manufacture or sale of the patented product was unauthorized. If the
patentee had obtained and collected a more-than-nominal
patentinfringement judgment against the entity that placed the infringing products
into the stream of commerce, the patentee would not be allowed to sue and
enjoin any downstream consumers for using the patent-embodying
products. 387 The basis for extending exhaustion was that once the patentee
had obtained full compensation in the suit against the manufacturer, the
patentee had effectively adopted the manufacturer's infringing sales as if
they had been the patentee's own. 388 A few courts then extended this
doctrine to protect a downstream user where the patentee had not yet
collected a judgment against the initial manufacturer, so long as the
patentee had successfully sued the manufacturer and it appeared the
manufacturer would be able to pay the judgment (e.g., by posting a
It was in this context that the Fifth Circuit decided Curtiss. There, the
patentee held a design patent for a trailer vehicle and sued another
manufacturer for infringement. The patentee obtained a decree of
infringement and a permanent injunction, but no award of damages or
profits. 390 While the case was on appeal, a consumer purchased a trailer
vehicle from the accused manufacturer on the assurance that the
manufacturer had the right to sell it. The patentee then sued the consumer
on the ground that his use of the manufacturer's vehicle constituted
infringement. The trial judge granted an injunction against the user but
carved out an exception that permitted continued use of the vehicle
throughout its reasonable life, "restraining the defendant as to it only from
making major repairs substantially amounting to a reconstruction." 391
The Fifth Circuit reversed. Noting that the patentee had not been
compensated, the court held that a fuller injunction against the consumer
prohibiting use of the trailer would have to issue. 392 But the court then
stated that the consumer could avoid the injunction if he paid a lump sum
sufficient to compensate the patentee for use of the design embodied in the
vehicle. 393 Cognizant, perhaps, of the desire to protect downstream
customers, the court effectively allowed the consumer to pay where the
infringing manufacturer had not. This extension is understandable insofar
as the court recognized (as it must have) that pricing damages on a single
item would be relatively easy. It also seems likely, given the defendant,
387. Birdsell v. Shaliol, 112 U.S. 485, 488-89 (1884) (dictum).
388. See Union Tool Co. v. Wilson, 259 U.S. 107, 113-14 (1922).
389. Allis v. Stowell, 16 F. 783, 787-88 (C.C.E.D. Wis. 1883); Gilbert & Barker Mfg.
Co. v. Bussing, 10 F. Cas. 348, 349 (C.C.S.D.N.Y. 1875) (No. 5416).
390. Harris & Schafer, Inc. v. Curtiss Aerocar Co., 69 F.2d 264, 264 (5th Cir. 1934).
391. Curtiss Aerocar Co. v. Springer, 81 F.2d 668, 669 (5th Cir. 1936).
393. Id. at 670.
that the plaintiff did not object. In any event, the decision was novel and
effectively dead on arrival. With one inapposite exception, Curtiss has
never been cited in a reported case in the last seventy-four years.
In light of the foregoing, it is impossible to argue that Congress
contemplated and incorporated a judicially imposed compulsory license
into the Patent Act of 1952, whether it be in the form of a continuing
royalty or a lump-sum award. When one reads the cases with the gloss of
the common law, which should now be fresh in the reader's mind, the
context and limited scope of the cases become clear.
2. Cases Decided Between 1952 and 1976
Two circuit court cases decided before the Copyright Act of 1976 could
conceivably have influenced congressional intent in passing that Act,
though whether to label them as a common-law trend suitable for
incorporation seems incredibly doubtful. Both decisions are
patentinfringement suits decided by the Second Circuit in 1961 and 1974.
Though the first states its approval of a continuing royalty, it actually does
less than what others have imagined. The second unequivocally adopts a
continuing royalty in lieu of a final injunction.
In Royal-McBee Corp. v. Smith-Corona Marchant,Inc.,394 the plaintiff
held a patent for an automatic margin regulator for typewriters. The
plaintiff sued two defendants in separate cases in March 1947, one of which
involved the defendant in suit Smith-Corona. The trial court entered
interlocutory orders on October 3, 1947, declaring both defendants had
infringed the patent.395 The court later entered a permanent injunction
against one defendant, 396 but not against Smith-Corona because the plaintiff
had suggested in a 1940 letter to Smith-Corona that its typewriters no
longer infringed. 397 The denial of the injunction was contingent on the
defendant paying a "fair royalty" of $1.09 on each infringing typewriter
from the date of the suit until the expiration of the patent in 1950.398 There
seems to be little doubt that this constituted a continuing royalty.
SmithCorona did not appeal the unpublished decision and the case was instead
held in abeyance while the other defendant's case was heard on appeal.
The Second Circuit affirmed the companion case in May 1948, 399 and
that case terminated in the Supreme Court in November of the same year.400
Smith-Corona then continued to litigate its case before the district court,
attempting in 1951 to amend its counterclaims in an effort to invalidate the
patent. 40 1 After that attempt failed, the parties attempted to settle but the
negotiations broke down. Smith-Corona finally submitted to an
"accounting" before a master long after the patent had already expired in
1950. Indeed, the Second Circuit itself noted that the appeal from the final
judgment occurred "more than ten years after the patent expired. '40 2 The
order on appeal, therefore, turned out to be nothing more than a standard
case, with the master simply assessing a reasonable royalty up through the
time of his hearing of the matter. Though the district court's decision,
initially, was forward looking, the order that became final for appeal and
that the Second Circuit reviewed was solely backward looking. Thus, the
Second Circuit's statement that it approved the district court's "flexible
approach towards a difficult problem" was not necessary to decide the
case. 40 3 Of course, it still signaled to the world that it would likely approve
the same in the future. Notably, however, it remains unclear whether the
continuing-royalty approach was taken without the parties' consent.
In 1974, the same court decided Fosterv. American Machine & Foundry
Co.,404 a decision on which there can be no splitting of hairs. The trial
court by interlocutory order in August 1968 held that the plaintiffs patent
was valid and infringed and initially signaled it would enter a final
injunction. 40 5 In September 1968, the court then reconsidered the remedy
and denied the plaintiff a final injunction because he did not practice the
invention and had not licensed it.406 The matter was referred to a special
master to assess the plaintiffs damages, and while that was pending, the
interlocutory finding of infringement was affirmed in 1969.407 The master
completed his report in September 1972, and it reflected the defendant's
infringements prior to that date. The damages amounted to $344,000 at a
special royalty rate of $20.408 This, of course, was nothing out of the
ordinary-the award was entirely backward looking.
But the trial judge did more. In December 1972, the court tentatively
approved the master's report and stated that "future sales should be
accounted for by virtue of a judgment 'consonant with the notion of a
compulsory licensing agreement." 409 When the judge finally approved the
report in February 1973, he inserted the following provision into the final
401. Royal-McBee, 295 F.2d at 3.
403. Id. at 6.
404. 492 F.2d 1317, 1324
(2d Cir. 1974)
405. Foster v. Magnetic Heating Corp., 297 F. Supp. 512, 519 (S.D.N.Y. 1968).
406. See Respondents' Brief in Opposition to Petition for Writ of Certiorari at 4, 7-8, 10,
app. lb, Foster v. Magnetic Heating Corp., 419 U.S. 833 (1974) (No. 73-1744) [hereinafter
407. Foster v. Magnetic Heating Corp., 410 F.2d 12 (2d Cir. 1969).
408. Foster,492 F.2d at 1322.
409. Respondents' Brief, supra note 406, at 10 (quoting Foster v. Magnetic Heating
Corp., No. 65 Civil 1114 (S.D.N.Y. Dec. 20, 1972) (order denying injunction), reprinted in
Respondents' Brief,supra note 406, app. at 14b).
Defendants... shall pay to plaintiff the sum of $20 per kilowatt of the
rated output power of each [infringing product] sold or leased by them
from the date of the filing of the Master's Report (September 22, 1972)
until the expiration date of the Foster patent (April 14, 1976) for use in the
United States in the production of [piping] .... 410
The Second Circuit expressly approved the order, citing the dictum of
Royal-McBee.4 11 Interestingly, the plaintiff sought certiorari on this point,
but the Supreme Court denied the petition. 4 12 The petition was poorly
written. If the following is any indication of the petition's quality, the
plaintiff inserted seven exclamation marks into the petition for emphasis. 4 13
Assuming arguendo that these U.S. decisions are relevant, it is difficult to
state that Royal-McBee and Foster represented the general state of the
common law at the time the Copyright Act was enacted in 1976. For one,
the cases involved patents, rather than copyrights. And though that alone
should not be dispositive, one cannot help but consider the two rights are
not identical. Second, one cannot forget that the cases were watershed,
breakaway cases coming from a sole circuit. No other circuit court relied
on either case before 1976, and their effect in district courts prior to that
date was slight. In 1974 and 1975, two district courts in patent cases cited
Royal-McBee in dicta for the proposition that a continuing royalty might be
proper. 4 14 Additionally, no reported decision cited Foster for its holding on
continuing royalties until 1997, when a trial court applied it. 4 15 Admittedly,
the Second Circuit holds a lofty position in the eyes of the law because of
its history and size. But even so, Royal-McBee and Foster can only be
described as holding an unusual position in 1976.
3. Cases Decided After 1976 but Before eBay
The remaining cases that are often cited by post-eBay cases and scholars
as support for continuing royalties all occur well after the patent and
copyright statutes were enacted in 1952 and 1976, respectively. First and
foremost are the several Supreme Court decisions discussed previously in
Part III.A. I have already shown that the pertinent statements are
unconsidered dicta. As for lower court decisions, most also simply state in
obiter dicta that continuing royalties are permissible. 4 16 One case alluded to
as much.4 17 Another approved of the royalty rate set by a judge, but it does
not seem that the royalty as an award per se was raised on appeal. 4 18 And
yet another court actually ordered a compulsory license, but that was then
reversed on appeal on other grounds. 4 19 Obviously, given the dates of those
decisions, we cannot assume Congress contemplated that they would fill the
interstices of the statutes.
D. The InapplicabilityofAntitrust Remedies
In a prior discussion, I noted that the Federal Circuit in Paice LLC v.
Toyota Motor Corp.420 cited Supreme Court precedent that permits
continuing royalties on patents where necessary to prevent anticompetitive
behavior. It is true that the Court has expressly allowed royalties in such
cases.42 1 One could thus argue that the Court's decisions in the antitrust
context are erroneous because they permit an equitable remedy that the
English Chancellor did not recognize circa 1789. But those decisions are
more easily and correctly dispatched on the ground that federal courts
actually have statutory authority under the antitrust laws to grant
compulsory licenses of patents and copyrights as a means of restraining
anticompetitive behavior. The antitrust cases therefore make for poor
analogies in assessing whether a similar remedy is permissible as a matter
of a federal court's default equitable powers in cases where an ongoing
copyright or patent infringement (rather than antitrust violation) is at issue.
Breaking monopolies apart sometimes requires the assignment or
licensing of intellectual-property rights from the right holder to another
entity. 422 Section 4 of the Sherman Act expressly empowers courts to
prevent and restrain its violation. 423 The provision is much broader than the
provisions contained in the patent and copyright acts. It is not limited to
injunctions, and it broadly permits relief to prevent anticompetitive
behavior. Similarly broad language may be found in the Clayton Act,
which invests courts with jurisdiction "to prevent and restrain violations of
this Act."'424 Quite simply, if a defendant wishes to take advantage of a
compulsory license under the scheme recognized by the antitrust cases cited
in Paice, he or she should then make out a case against the plaintiff under
the antitrust statutes themselves.
VIII. THE STANDARD FOR INJUNCTIVE RELIEF REDUX
One of the consequences of misunderstanding the authority to grant
prospective compensation is that federal courts have misapplied the
standard for injunctive relief as well. Many post-eBay decisions that have
denied final injunctions to prevailing plaintiffs have done so erroneously.
The courts have committed two errors. First, courts deny injunctions in part
because they believe they are authorized to impose prospective
compensation instead and that therefore another remedy exists that can
adequately compensate plaintiffs. I have already demonstrated that this
avenue is unavailable to federal courts. Second, courts state that
prospective compensation-whether a continuing royalty or a lump-sum
award-constitutes an adequate remedy at law. It is this second mistake
that I address here. The mistake demonstrates that some courts have failed
to properly understand and adhere to the equity-law distinction.
Many courts have actually stripped themselves of their jurisdiction in
equity to award the very alternative prospective compensation that they
have granted. As I have already explained, 425 the Judiciary Act of 1789
limited the equitable jurisdiction of the federal courts to cases where there
was no adequate remedy at law. Though Congress repealed that section in
1948, the repeal had no effect on the substantive rules of equity, nor did the
merger of law and equity procedure in 1938. Thus, the fusion of the two
systems is incomplete, much as it is in other common-law systems. 426
424. 15 U.S.C. § 25.
425. See supra Part V.B.1.
426. Courts in England, Australia, and New Zealand have grappled with whether the
combination of law and equity procedure in their countries eliminated all distinctions
between law and equity. See generally McDERMOTT, supra note 232, at 105-06; R. P.
MEAGHER, J. D. HEYDON & M. J. LEEMNG, EQUITY: DOCTRINES AND REMEDIES 52-54 (4th
ed. 2002). The answer is that many substantive distinctions remain. See Jill Martin, Fusion,
Fallacy and Confusion; A Comparative Study, 1994 CONV. & PROP. LAW. (N.S.) 13; Julie
Maxton, Some Effects of the Intermingling of Common Law and Equity, 5 CANTERBURY L.
REv. 299 (1993); Michael Tilbury, Fallacyor Furphy?: Fusion in a JudicatureWorld, 26
U. NEW S. WALES L.J. 357 (2003). For a call to discard the baggage associated with whether
a claim, remedy, or defense was historically legal or equitable, see ANDREW BURROWS,
FUSING COMMON LAW AND EQUITY: REMEDIES, RESTITUTION AND REFORM 3 (2001); Andrew
Burrows, We Do This at Common Law but That in Equity, 22 OXFORD J. LEGAL STUD. 1
The inadequate-remedy-at-law requirement remains "jurisdictional" in a
sense, albeit not with the same significance as subject-matter jurisdiction. 42 7
Judgments rendered without subject-matter jurisdiction are void ab initio,
and party consent cannot cure the defect.42 8 The same is not true of equity
jurisdiction. An equitable remedy that issues where there is an adequate
remedy at law remains enforceable until overturned. 429 The parties can also
expressly or implicitly consent to equity jurisdiction in cases where
ordinarily there would be none.4 30 But if timely objected to, an improper
exercise of equity jurisdiction constitutes an abuse of discretion that courts
can correct on appeal.
The Supreme Court has confirmed that the sine qua non of equitable
relief is still the "inadequacy of legal remedies." 4 31 The principle applies
not only to injunctive relief, but to any form of equitable relief in federal
court.4 3 2 Implicit within the requirement is that if there is an adequate
remedy at law, then the plaintiff must make do with that remedy and cannot
resort to any other in equity. 433 The rule also acts prophylactically to help
preserve the right to a jury trial. A party cannot be forced to face an
equitable remedy at a bench trial when an adequate remedy, and thus a right
to a jury trial, would be available at law. 434
There are exceptions to the inadequacy requirement. The first is where
the subject matter of the suit falls within the traditional concurrent
jurisdiction of a court of equity. 4 35 I have recently argued that copyright
cases that seek injunctions fall under equity's concurrent jurisdiction, thus
making inadequacy irrelevant. 4 36 Courts have yet to consider that
argument, however, and we must proceed assuming they may not adopt it.
The second exception is where Congress specifically empowers a court to
award an equitable remedy without incorporating traditional equitable
limitations. 437 The copyright statute, for example, entitles a copyright
owner to recover the defendant's profits-an equitable remedy. 438 Nothing
in the statute, however, requires a plaintiff to demonstrate that her remedies
at law-actual damages or statutory damages-are inadequate before the
profits become recoverable. 4 39 This second exception cannot apply to
prospective compensation given the language of the applicable statutes. 440
How is it, then, that federal courts can grant the equitable remedy of
prospective compensation when they have just held that the plaintiff has an
adequate remedy at law? The simple answer is they cannot. Courts with a
proper understanding of equity recognize as much, and when they deny a
final injunction on the ground an adequate remedy exists at law, the
principal remedy they leave the plaintiff is successive actions at law for past
damages. Naturally, litigants sometimes consider successive actions
inadequate, and courts have declared that successive actions are often an
inadequate remedy. 44 1 Thus it would technically be more correct to say that
there is no adequate remedy at law-thereby triggering equitable
"jurisdiction"-but that an injunction should nevertheless be denied
because there is no irreparable injury. Losses from future infringements
would then be reparable by another remedy in equity.442 Alternatively, a
court could deny a final injunction because of the public interest.
Of course, this would not aid courts that desire to award continuing
royalties or lump-sum damages for postjudgment infringements. Holding
as much simply triggers an equitable jurisdiction to award remedies that
existed and were being administered by the English Court of Chancery
around 1789, namely an injunction. By ruling as they did, many courts
placed themselves into a feedback loop and, as a result, many of the
injunctions that they denied should probably have been granted instead.
eBay has dropped a bombshell on the federal courts. They have been told
to more rigorously screen requests for final injunctions and as a
consequence injunctions have been denied more frequently than in the past.
Unfortunately, the Supreme Court did not indicate what relief, if any, lower
courts should award in lieu of a final injunction where the plaintiff
prevailed on the merits. Courts have turned to their "equitable powers" to
craft what they believe are appropriate alternative remedies, some of which
are sensible in the abstract.
438. 17 U.S.C. § 504(b) (2006).
439. Accord Sheldon v. Moredall Realty Corp., 95 F.2d 48, 50 (2d Cir. 1938).
440. See supra Part IV.
441. For English copyright cases, see Lawrence v. Smith, Jac. 471, 472, 37 Eng. Rep.
928, 928-29 (Ch. 1822); Rundell v. Murray, Jac. 311, 314, 37 Eng. Rep. 868, 869 (Ch.
1821). For an English patent case, see Harmer v. Plane, 14 Ves. jun. 130, 132, 33 Eng. Rep.
470, 471 (Ch. 1807).
442. For more on the potential differences between the inadequate-remedy-at-law and
irreparable-injury requirements, see G6mez-Arostegui, supra note 3, at 1205 n. 17.
As this Article has shown, however, federal courts actually have no
power to order lump-sum awards or continuing royalties in lieu of a final
injunction as either a matter of common law or equity. The most that
federal judges can do is encourage the parties to expressly consent to some
form of prospective compensation. For example, a plaintiff who has lost a
motion for a final injunction after trial can conditionally stipulate to an
award of a continuing royalty in lieu of the injunction in the abstract,and
simply reserve the right to appeal the denial of the injunction and the
royalty rate.443 Barring a zealous appellate court, litigants can largely
control this remedial portion of the litigation. If a plaintiff refuses to
stipulate, however, then courts must permit her to sue again at a later date.
Only Congress has the power to alter this state of affairs and empower
courts to impose compulsory licenses. Congress is in the best position to
carefully consider and balance the interests of right holders and of those
who infringe those rights. It is also the only institution that can free the
courts from most of the artifacts of the law and equity distinction that
remain today. For instance, Congress can permit courts to consider
prospective compensation as a basis for denying a final injunction despite
the fact those remedies are equitable. And Congress can statutorily provide
plaintiffs a right to a jury trial for prospective compensation where they
otherwise might not have a right under the Seventh Amendment. A
plaintiff would thus not need to pursue the defendant in a subsequent suit.
Congress needs guidance on how best to proceed. This Article has
provided fodder on some issues, but left many others untreated. I will soon
address many of them in another article. But in the meantime, I am hopeful
that my conclusions will prompt courts to recognize the limits of their
powers and further spur stakeholders to redirect their attention to the
443. E.g., Joyal Prods., Inc. v. Johnson Elec. N. Am., Inc., No. 04-5172 (JAP), 2009 WL
512156, at *13-14 (D.N.J. Feb. 27, 2009).
6. E.g. , Berry v . Haw. Express Serv., Inc., No. Civ. 03-00385SOM/LEK , 2006 WL 618894, at *3 ( D. Haw . Mar. 9 , 2006 ).
7. E.g. , Royal-McBee Corp . v. Smith-Corona Marchant , Inc., 295 F.2d 1 , 6 ( 2d Cir . 1961 ); Blackburn v . S. Cal. Gas Co., 14 F. Supp . 553 , 554 (S.D. Cal . 1936 ).
8. E.g. , Dun v . Lumbermen's Credit Ass'n , 209 U.S. 20 , 23 ( 1908 ).
9. E.g. , Ballard v . City of Pittsburgh , 12 F. 783 , 786 (W.D. Pa . 1882 ); Bliss v . Brooklyn , 3 F. Cas . 706 , 707 (C.C.E.D.N .Y. 1871 ) (No. 1544 ).
22. E.g., Transcript of Hearing at 125 , Finisar Corp . v. DirecTV Group, Inc., No. 1 : 05 - CV-264 -RHC (E.D. Tex . July 6 , 2006 ).
23. Paice LLC v. Toyota Motor Corp., No. 2 : 04 -CV- 21 1 - DF , 2006 WL 2385139, at *5 ( E.D. Tex . Aug. 16 , 2006 ); see also Bard Peripheral Vascular, Inc . v. W.L. Gore & Assocs., Inc., No. CV- 03 -0597 - PHX-MHM, 2009 WL 920300, at *8 ( D. Ariz . Mar. 31 , 2009 ); Praxair, Inc. v. ATMI, Inc., 479 F. Supp . 2d 440 , 444 (D. Del . 2007 ).
24. E.g., Verizon Servs . Corp. v. Vonage Holdings Corp., 503 F.3d 1295 , 1310 - 11 (Fed. Cir. 2007 ); Callaway Golf Co . v. Acushnet Co., 585 F. Supp . 2d 600 , 620 - 22 ( D. Del . 2008 ); Commonwealth Scientific & Indus. Research Org. v. Buffalo Tech. Inc. , 492 F. Supp . 2d 600 , 605 - 06 ( E.D. Tex . 2007 ), rev'd on othergrounds, 542 F.3d 1363 ( Fed. Cir . 2008 ); Keg Techs ., Inc. v. Laimer, 436 F. Supp . 2d 1364 , 1371 (N.D. Ga . 2006 ).
25. eBay Inc. v. MercExchange, L.L.C. , 547 U.S. 388 , 396 - 97 ( 2006 ) (Kennedy , J., joined by Stevens , Souter, and Breyer, JJ., concurring).
26. Mertens v. Hewitt Assocs., 508 U.S. 248 , 253 - 58 ( 1993 ) (joining opinion of the Court); see also Lorillard v . Pons , 434 U.S. 575 , 583 ( 1978 ) (noting that "legal" is a term of art, which, when used to describe a remedy, is often used in contradistinction to the term "equitable").
27. See infra text accompanying note 344.
28. Paul Goldstein reads Justice Kennedy's concurrence to include not only a lump-sum future damages award, but also a disgorgement of all the apportioned profits the defendant is expected to earn from future infringements . See 2 GOLDSTEIN, supra note 19, § 13.2.1 .1, at 13: 39 . Because the disgorgement of past profits in intellectual property is undoubtedly an equitable remedy, rather than a legal one, it would seem a fortiori that Justice Kennedy could not have meant to include an award of the defendant's future profits .
29. 464 U.S. 417 ( 1984 ).
30. Universal City Studios , Inc. v. Sony Corp. of Am., 480 F. Supp . 429 , 432 -33 (C.D. Cal . 1979 ), ajfd in part, rev'd in part,659 F.2d 963 ( 9th Cir . 1981 ).
31. Id . at 468-69.
32. Universal City Studios , Inc. v. Sony Corp. of Am., 659 F.2d 963 , 977 ( 9th Cir . 1981 ), rev'd , 464 U.S. 417 ( 1984 ).
33. Id .at 976.
34. Id . (citing 3 MELVILLE B . NIMMER, NIMMER ON COPYRIGHT § 14 .06[B], at 14-53 to 14 - 54 ( 1981 ) ) . Melville Nimmer is therefore partly responsible for leading courts down this path . See also infra note 325 . For more on the influence wielded by the Nimmer treatise , see Ann Bartow, The Hegemony of the Copyright Treatise ,73 U. CrN. L. REV . 581 ( 2004 ).
35. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 , 456 ( 1984 ).
36. Id . at 499 (Blackmun, J., joined by Marshall , Powell, and Rehnquist, JJ., dissenting).
37. Id . Bill Patry was given access to Justice William Brennan's papers in Sony, and Patry recounts in his treatise that Justice Brennan doubted whether federal courts had the authority to impose a continuing royalty . See 6 PATRY, supra note 5 , § 22 : 75 .
38. Campbell v. Acuff-Rose Music , Inc., 510 U.S. 569 , 578 n. 10 ( 1994 ) (citing 17 U .S.C. § 502 (a)).
39. 863 F.2d 1465 , 1479 ( 9th Cir . 1988 ) (citing 3 MELVILLE B . NIMMER, NIMMER ON COPYRIGHT § 14 .06[B], at 14-56.2 ( 1988 ) ), affd on other grounds sub nom . Stewart v. Abend , 495 U.S. 207 ( 1990 ).
40. N.Y. Times Co. v. Tasini, 533 U.S. 483 , 505 ( 2001 ) (citations omitted).
41. Id . On remand, the defendant mooted the issue by voluntarily removing all infringing articles from the electronic database . See Tasini v. N.Y. Times Co., 184 F. Supp . 2d 350 , 352 -53 (S.D.N .Y. 2002 ).
42. E.g., Broadcom Corp . v. Qualcomm Inc., 585 F. Supp . 2d 1187 , 1194 (C.D. Cal . 2008 ) ("[T]he sunset [continuing-royalty] provision arises out of the Court's order, and is in no sense dependent on the patentee's consent."); Voda v . Cordis Corp., No. CIV- 03 -1512-L, 2006 WL 2570614, at *6 ( W.D. Okla . Sept. 5 , 2006 ) (declining plaintiff's suggestion to "sever his action for monetary damages for post-verdict infringement" ).
43. See infra note 57.
44. E.g., Broadcom Corp . v. Qualcomm Inc., No. CV 05 -467 JVS (C.D. Cal . Aug. 28 , 2008 ) (order granting in part and denying in part plaintiff's motion for contempt); see FED. R. Civ . P. 70 (e).
45. See 28 U.S.C. § 2007 ( 2006 ) (imprisonment for debt); FED . R. Civ . P. 69 ( a); see also Aetna Cas . & Sur . Co. v. Markarian, 114 F.3d 346 , 349 - 50 ( 1st Cir . 1997 ).
46. No. I: 05 -CV-264 -RHC (E.D. Tex . 2005- 2008 ).
47. Transcript of Hearing, supra note 22, at 125.
48. Finisar Corp . v. DirecTV Group, Inc., No. 1 : 05 -CV-264, at 1-2 ( E.D. Tex . July 7 , 2006 ) (final judgment) . Finisarwas later reversed because the district court had improperly construed the patent claims . Finisar Corp . v. DirecTV Group, Inc., 523 F.3d 1323 , 1326 (Fed. Cir. 2008 ), cert. denied, 129 S. Ct . 754 ( 2008 ). The Federal Circuit, therefore, did not decide whether a continuing-royalty award was appropriate . Id. at 1339.
49. 492 F.2d 1317 ( 2d Cir . 1974 ), cited in Transcript of Hearing, supra note 22, at 126- concluded that if the parties could not agree then the trial "court would retain jurisdiction to impose a reasonable royalty to remedy the past and ongoing infringement . " Id. at 1317.
57. Id . at 1313 n. 13 , 1315 - 16 ; accordBoston Scientific Corp. v. Johnson & Johnson, No. C 02- 0790 SI , 2008 WL 5054955, at *2- 5 ( N.D. Cal . Nov. 25 , 2008 ) (order denying counterclaim-plaintiffs motion for equitable relief); cf Keg Techs ., Inc. v. Laimer, 436 F. Supp . 2d 1364 , 1371 (N.D. Ga . 2006 ) (labeling a "compulsory license" in lieu of a final injunction an equitable remedy ).
I take no position on whether Paicewas correct to hold that no right to a jury trial attached to this equitable remedy. The fact that a remedy is equitable is not dispositive of the jury-trial right . See Dairy Queen , Inc. v. Wood , 369 U.S. 469 , 477 - 78 ( 1962 ).
58. Kennedy v. Lakso Co., 414 F.2d 1249 , 1250 - 54 ( 3d Cir . 1969 ); Swofford v . B & W, Inc., 336 F.2d 406 , 409 - 11 ( 5th Cir . 1964 ); Boston Scientific Corp. v. Johnson & Johnson, 550 F. Supp . 2d 1102 , 1119 - 23 ( N.D. Cal . 2008 ).
59. Hynix Semiconductor Inc. v. Rambus Inc., 609 F. Supp . 2d 951 (N.D. Cal . 2009 ).
60. Id . at 986.
61. Id .
62. Id . at 986- 87 . For other cases where a defendant opposed a continuing royalty, see Brief in Support of Resistance to Lincoln's Motion for Permanent Injunction and Alternative Relief at 17-18, Lincoln Nat'l Life Ins . Co. v. Transamerica Life Ins. Co., No. 1 : 06 -CV00110 -MWB (N.D. Iowa Apr . 6 , 2009 ), 2009 WL 960967; Defendant emsCharts, Inc.'s Opposition to Plaintiff Golden Hour Data Systems, Inc.'s Motion for a Permanent Injunction at 12-14, Golden Hour Data Sys ., Inc. v. emsCharts, Inc., No. 2 : 06 -CV-381 TJW (E.D. Tex . Jan. 21 , 2009 ), 2009 WL 713168; Boston Scientific's Opposition to Cordis's Request for an Ongoing Royalty at 14, Boston Scientific Corp. v. Johnson & Johnson, No. 3 : 02 -CV-00790 SI (N.D. Cal . July 25 , 2008 ), 2008 WL 4082594.
63. 578 F. Supp . 2d 1079 (W.D. Wis . 2007 ).
64. Id . at 1083; Innogenetics , N.V. v. Abbott Labs ., 512 F.3d 1363 , 1380 (Fed. Cir. 2008 ).
65. Innogenetics , N.V. v. Abbott Labs ., No. 05 -C- 0575 -C , 2007 WL 5431017 ( W.D. Wis . Jan. 12 , 2007 ) (order granting final injunction).
66. Innogenetics , 512 F.3d at 1380.
67. Id .
68. Id .
69. Id . at 1380-81.
70. MGA Parties' Opposition to Mattel's Motion for Permanent Injunction at 1, Bryant v . Mattel, No. CV 04-9049 SGL (RNBx) (C.D. Cal . Oct. 13 , 2008 ), 2008 WL 4721714 [hereinafter MGA Opposition].
71. Phase B Verdict Form as Given at 5 , Mattel , Inc. v. MGA Entm't, Inc., No. CV 04 - 9049 SGL (RNBx) (C.D. Cal . Aug. 26 , 2008 ), 2008 WL 3915042.
72. MGA Opposition, supra note 70, at 3-4.
73. Bryant v. Mattel, Inc., No. CV 04 -9049 SGL (RNBx) (C.D. Cal . Dec. 3 , 2008 ) (order granting Mattel, Inc.'s motion for permanent injunction ).
74. See Cummins-Allison Corp. v. SBM Co., 584 F. Supp . 2d 916 , 916 - 17 ( E.D. Tex . 2008 ).
75. Seoul Semiconductor Co. v. Nichia Corp., No. 9 : 07 -CV-273, at 1-2 ( E.D. Tex . July 9 , 2008 ) (order); accord Iovate Health Scis ., Inc. v. Bio-Engineered Supplements & Nutrition, Inc., No. 9 : 07 -CV-46, at 1-2 ( E.D. Tex . July 9 , 2008 ) (order using identical language as in the Seoul Semiconductor order); see also Amgen, Inc . v, F. Hoffmian-La Roche Ltd., 581 F. Supp . 2d 160 , 210 n.12 (D. Mass . 2008 ).
76. Ariba , Inc. v. Emptoris, Inc., 567 F. Supp . 2d 914 , 918 (E.D. Tex . 2008 ).
77. See supra Part I.
78. 434 F. Supp . 2d 437 (E.D. Tex . 2006 ).
79. Id . at 444.
80. Id . at 444- 45 . The Federal Circuit affirmed the verdict but was neither asked to review, nor did it consider, the district court's denial of a final injunction . z4 Techs ., Inc. v. Microsoft Corp., 507 F.3d 1340 ( Fed. Cir . 2007 ).
81. E.g., Avid Identification Sys ., Inc. v. Phillips Elec. N. Am . Corp., No. 2 : 04 -CV-183, 2008 WL 819962, at *4 ( E.D. Tex . Mar. 25 , 2008 ).
82. MercExchange , L.L.C. v. eBay, Inc., 500 F. Supp . 2d 556 , 590 - 91 ( E.D. Va . 2007 ).
83. E.g., Advanced Cardiovascular Sys ., Inc. v. Medtronic, Inc., No. C95 -03577 -DLJ , 2008 WL 4647384 ( N.D. Cal . Oct. 20 , 2008 ); Mon Cheri Bridals, Inc . v. Wu, Civ. No. 04 - 1739 (AET), 2008 WL 4534191, at *6 ( D.N.J. Oct . 7 , 2008 ); Advanced Cardiovascular Sys ., Inc. v. Medtronic Vascular, Inc., 579 F. Supp . 2d 554 (D. Del . 2008 ); Wamer-Tamerlane Publ'g Corp. v. Leadsinger Corp ., No. CV 06-6531-VAP , at 20 ( C.D. Cal . Apr. 18 , 2008 ) (order granting in part and denying in part plaintiffs' motion for partial summary judgment).
84. See infraParts V-VII.
85. 17 U.S.C. §§ 101 - 1332 ( 2006 ).
86. 35 U.S.C. §§ 1 - 376 ( 2006 ).
87. 17 U.S.C. § 502 (a).
88. GEORGE TUCKER BISPHAM, THE PRINCIPLES OF EQUITY §§ 400 - 401 , at 512- 16 (5th ed. Philadelphia, Kay & Brother 1893 ).
89. 17 U.S.C. § 502 (a).
90. WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1936, sub restrain la (Phillip Babcock Gove ed ., 1986 ). Early treatise authors on intellectual-property law used the terms "restrain" and "prevent" interchangeably and never with any apparent distinction. Take, for example, the patent treatise written by George Curtis. Writing at a time when the Patent Act utilized the word "prevent" rather than "restrain," Curtis entitled his chapter on injunctions: "Of the Remedy in Equity to Restrain Infringements." GEORGE T. CURTIS, A TREATISE ON THE LAW OF PATENTS 538 (4th ed . Boston, Little, Brown & Co. 1873 ).
91. WEBSTER 'S, supra note 90, at 1936 , sub restrain lb .
92. Act of Feb. 15 , 1819 , ch. 19 , 3 Stat. 481 , 481 - 82 .
93. E.g., Act of July 8 , 1870 , ch. 230 , § 106 , 16 Stat. 198 , 215 .
94. Copyright Act of 1909 , ch. 320 , § 36 , 35 Stat. 1075 , 1084 .
95. H.R. REP . No. 7083 , at 16- 17 ( 1907 ), reprintedin 6 LEGISLATIVE HISTORY OF THE 1909 COPYRIGHT ACT pt . N (E. Fulton Brylawski & Abe Goldman eds., 1976 ) [hereinafter LEGISLATIVE HISTORY] .
96. H.R. REP . No. 2222 , at 18 ( 1909 ), reprintedin 6 LEGISLATIVE HISTORY, supra note 95, pt . S; accord ARTHUR W. WELL, AMERICAN COPYRIGHT LAW 513 ( 1917 ) (noting that section 36 was a reenactment of prior law).
97. An index of the legislative history relevant to § 502(a) of the Copyright Act of 1976 may be found in 3 THE KAMINSTEIN LEGISLATIVE HISTORY PROJECT: A COMPENDIUM AND ANALYTICAL INDEX OF MATERIALS LEADING TO THE COPYRIGHT ACT OF 1976 , at 111-39 (Alan Latman & James F . Lightstone eds., 1983 ) [hereinafter KAMINSTEIN].
315. 28 U.S.C. § 1498 (a)- (b) ( 2006 ).
316. See Decca Ltd. v. United States , 640 F.2d 1156 , 1167 (Ct. Cl. 1980 ).
317. See Leesona Corp. v. United States , 599 F.2d 958 , 967 (Ct. Cl. 1979 ) (holding that the word "entire" was added to the statute in 1918 to emphasize that the statutory remedy against the United States was the only remedy permitted and to overrule a prior case where the Supreme Court had allowed a patentee to sue and enjoin a government contractor).
318. See , e.g., De Graffenried v. United States , 228 Ct. Cl. 780 , 784 ( 1981 ) ("[R]elief for future infringements is beyond the power of the court by declaratory judgment or otherwise."); Ushakoff v . United States , 375 F.2d 822 , 824 (Ct. Cl. 1967 ) ("[Petitioner was entitled to an accounting for any Gove[r]nment use or manufacture that occurs between the filing date of the original petition and the expiration of the patent or the entry of final judgment, whichever occurs first." (citing Calhoun v . United States , 354 F.2d 337 , 340 (Ct. Cl. 1965 )) ); Irving Air Chute Co ., Inc. v. United States , 93 F. Supp . 633 , 637 (Ct. Cl. 1950 ) ("We think that if one suit must suffice for all uses by the Government, past and prospective, it would be impossible to determine what compensation would be reasonable or entire ... ").
319. Ariba , Inc. v. Emptoris, Inc., 567 F. Supp . 2d 914 , 918 (E.D. Tex . 2008 ).
320. E.g., Renz v . 33rd Dist. Agric. Ass'n, 46 Cal. Rptr. 2d 67 , 69 - 71 (Ct. App. 1996 ) (citing CAL . CIv. CODE § 3283 (West 1997 )) ; Hawley v . Mowatt , 160 P.3d 421 , 425 (Colo. App. 2007 ); Krejci v . Capriotti , 305 N.E.2d 667 , 669 - 70 (Ill. App. Ct. 1973 ); Seaboard Oil Co . v. Britt, 271 S.W. 1038 , 1039 (Ky. 1925 ); Schrunk v . Andres , 22 N.W.2d 548 , 552 - 53 (Minn. 1946 ); Winchester v . Byers , 145 S.E. 774 , 775 (N.C . 1928 ); Pantall v . Rochester &
325. See 2 MELVILLE B. NIMMER , NIMMER ON COPYRIGHT § 157 .2, at 700 ( 1976 ) ("[W]here great public injury would be worked by [a final] injunction, the courts might follow cases in other areas of property law, and award damages or a continuing royalty instead of an injunction in such special circumstances." (citing Dun v . Lumbermen's Credit Ass'n , 209 U.S. 20 ( 1908 ) ; West Publ'g Co. v. Lawyers Coop . Publ'g Co., 79 F. 756 ( 2d Cir . 1897 )) ); 4 MELVILLE B . NIMMER & DAVID NIMMER , NIMMER ON COPYRIGHT § 14.06[B][b][ii] , at 14-159 to 14 - 160 ( 2009 ) (standing for a similar proposition). Notably, the Nimmers would limit use of the doctrine to cases where granting an injunction would work an injury to the public . Id.
326. 23 N.H. 83 ( 1851 ), cited by MCCORMICK , supranote 301 , § 127 , at 505.
327. Id . at 102.
328. Id . at 103-04.
329. Id . at 104.
330. WILLIAM B. HALE & ROGER W. COOLEY , HANDBOOK ON THE LAW OF DAMAGES 124- 25 (2d ed. 1912 ). This was not universally recognized. Some courts have held that a trespass remains temporary if the defendant can actually or (in some jurisdictions) reasonably undo what she has already done. The fact the trespass will persist without further action is not dispositive . E.g., Mangini v . Aerojet-Gen. Corp., 912 P.2d 1220 , 1229 - 30 (Cal. 1996 ); Kentland-Elkhom Coal Co . v. Charles, 514 S.W.2d 659 , 664 (Ky. 1974 ); Dietzel v . City of New York, 112 N.E. 720 , 720 (N.Y . 1916 ); Fradkin v . Northshore Util. Dist., 977 P.2d 1265 , 1269 - 70 (Wash. Ct. App. 1999 ) ; see also 1 SEDGWICK , supra note 300, § 93 .
331. HALE &COOLEY, supra note 330, at 124-25.
332. MCCORMICK , supra note 301, § 127 , at 506 (emphasis added).
333. Accord id. at 506-07; 1 SEDGWICK , supra note 300, § 95 .
334. E.g., N. Ind. Pub. Serv. Co. v. W.J. & M.S. Vesey , 200 N.E. 620 , 626 (Ind. 1936 ); Milan v . City of Bethlehem, 94 A.2d 774 , 776 - 77 (Pa. 1953 ) ; see also RESTATEMENT (SECOND ) OF TORTS § 930 ( 2 ) & cmt. c ( 1979 ) ; RESTATEMENT (FIRST) OF TORTS § 930(1)(b)(i) & cmt . b ( 1939 ).
335. Hoery v. United States , 64 P.3d 214 , 219 (Colo. 2003 ) (emphasis added).
336. DAN B. DOBBS , THE LAW OF TORTS § 57, at 116 ( 2000 ) ("It is not easy to find harmony in the case results."); I FOWLER V. HARPER ET AL., HARPER , JAMES AND GRAY ON TORTS § 1 .7, at 34 (3d ed. 2006 ) ("[T]he tests of distinction are clouded by doubt and confusion .... "); HALE & COOLEY, supra note 330 , at 121 ( "It is impossible to reconcile all of the cases."); 1 SEDGWICK , supra note 300, § 94 ( "Courts of the highest authority have differed on the question."). See generally Schneider Nat'l Carriers, Inc . v. Bates, 147 S.W.3d 264 , 281 - 90 (Tex. 2004 ) (recounting the split of authorities within Texas) .
337. See Beatty v. Wash. Metro. Area Transit Auth., 860 F.2d 1117 , 1125 (D.C. Cir . 1988 ) (District of Columbia law); Reynolds Metals Co . v. Wand, 308 F.2d 504 , 507 - 08 (9th
348. E.g., Christopher Phelps & Assocs. v. Galloway, 492 F.3d 532 , 543 - 44 ( 4th Cir . 2007 ).
349. See 17 U.S.C. § 507 ( 2006 ) (three-year limitation ); 35 U.S.C. § 286 ( 2006 ) (six-year limitation).
350. Similar difficulties have led some courts in property cases to consider decoupling the consequences of the "permanent" labeling, such that a tort might be labeled permanent for purposes of allowing future damages, but not for purposes of the limitations period . E.g., Beatty v . Wash. Metro. Area Transit Auth., 860 F.2d 1117 , 1125 (D.C. Cir . 1988 ); Cook v . Rockwell Int'l Corp. , 358 F. Supp . 2d 1003 , 1011 - 13 ( D. Colo . 2004 ) ; see also Mangini v . Aerojet-Gen. Corp., 912 P.2d 1220 , 1230 (Cal. 1996 ) (reserving whether to decouple for another day). The Restatement approach appears to approve decoupling.
351. RESTATEMENT (SECOND) OF TORTS §§ 930(2) cmt . c, 944 cmt. h ( 1979 ).
369. Elec . Smelting, 189 F. at 712 .
370. Id . at 712- 13 . Several commentators have suggested the injunction was denied because the plaintiff was a nonpracticing entity . See Brian D. Coggio et al., Damage Control-What an Adjudged Infringer Can Do To Minimize the Resulting Damage, 15 AIPLA Q .J. 250 , 254 ( 1987 ); Robert P. Merges, One Hundred Years of Solicitude: IntellectualProperty Law, 1900 - 2000 , 88 CAL. L. REv. 2187 , 2219 n. 148 ( 2000 ) ; Kurt M. Saunders, Patent Nonuse and the Role of Public Interest as a Deterrent to Technology Suppression, 15 HARv . J.L. & TECH . 389 , 442 ( 2002 ); Venkatesan, supra note 368, at 37. This is incorrect. The plaintiff actually used its patented process on metals. It even made carborundum, albeit not on a commercial scale . See Elec. Smelting & Aluminum Co . v. Carborundum Co., 102 F. 618 , 633 ( 3d Cir . 1900 ).
371. Elec . Smelting, 189 F. at 714 (quoting Dorsey Harvester Revolving-Rake Co . v. Marsh , 7 F. Cas . 939 , 945 -46 (C.C.E.D. Pa . 1873 ) (No. 4014)) .
372. Carborundum Co. v. Elec. Smelting & Aluminum Co ., 203 F. 976 , 977 ( 3d Cir . 1913 ).
373. 209 U.S. 20 ( 1908 ).
374. Dun v. Lumbermen's Credit Ass'n , 144 F. 83 , 85 ( 7th Cir . 1906 ).
375. Dun , 209 U.S. at 24 (emphasis added).
376. 176 F. 833 ( 2dCir . 1910 ).
394. 295 F.2d 1 ( 2d Cir . 1961 ).
395. For the order in the companion case, see Royal Typewriter Co . v. Remington Rand, Inc., 76 F. Supp . 220 ( D. Conn . 1947 ).
396. See Royal Typewriter Co. v. Remington Rand, Inc., 88 F. Supp . 734 , 734 (D. Conn . 1948 ).
397. Royal-McBee , 295 F.2d at 4-6.
398. Id . at 2- 3 . The trial court barred the plaintiff from seeking damages prior to suit because of laches . Id. at 5.
399. Royal Typewriter Co. v. Remington Rand, Inc., 168 F.2d 691 ( 2d Cir . 1948 ).
400. Remington Rand , Inc. v. Royal Typewriter Co., 335 U.S. 864 ( 1948 ).
410. Foster v. Magnetic Heating Corp., No. 65 Civil 1114 (S.D.N .Y. Feb. 8 , 1973 ) (order adopting report of the special master ), reprintedin Petition for a Writ of Certiorari at 34 , 36, Foster,396 U.S. 829 (No. 73 - 1744 ).
411. Foster , 492 F.2d at 1324.
412. 419 U.S. 833 ( 1974 ).
413. Petition for a Writ of Certiorari , supra note 410, at 4-10.
414. Siemens Aktiengesellschaft v. Beltone Elecs . Corp., 407 F. Supp . 807 , 811 (N.D. I11 . 1975 ); Minn. Mining & Mfg. Co. v. Berwick Indus., Inc., 373 F. Supp . 851 , 870 (M.D. Pa . 1974 ). Another case in 1969 did not cite Royal-McBee, but might have been influenced by it . See Allied Research Prods., Inc. v. Heatbath Corp., 300 F. Supp . 656 (N.D. I11 . 1969 ). There, the court denied a final injunction because the plaintiff had refused to license its patent to the defendant for personal reasons. The court held that this was "unfair discrimination" and that the defendant was "entitled to be licensed by plaintiffs on the same royalty basis as plaintiffs were granting licenses to other manufacturers who were competing with plaintiffs and defendants . " Id. at 657 . The decision is bizarre and wrong .
415. Ramp Research & Dev., Inc. v. Structural Panels, Inc., 977 F. Supp . 1169 , 1178 -79 (S.D. Fla . 1997 ), rev'don other grounds,230 F.3d 1381 ( Fed. Cir . 2000 ).
416. E.g., Am. Geophysical Union v. Texaco Inc., 60 F.3d 913 , 932 n. 19 ( 2d Cir . 1994 ); New Era Publ'ns Int'l, ApS v . Henry Holt & Co., 873 F.2d 576 , 585 ( 2d Cir . 1989 ); Abend v. MCA, Inc ., 863 F.2d 1465 , 1479 ( 9th Cir . 1988 ); Universal City Studios, Inc . v. Sony Corp. of Am., 659 F.2d 963 , 976 ( 9th Cir . 1981 ); see also Princeton Univ. Press v. Mich. Document Servs., 99 F.3d 1381 , 1397 ( 6th Cir . 1996 ) (Merritt, C .J., dissenting).
417. Silverstein v. Penguin Putnam , Inc., 368 F.3d 77 , 86 ( 2d Cir . 2004 ).
418. Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613 , 628 (Fed. Cir. 1985 ).
419. Ramp Research & Dev., 977 F. Supp . at 1178-79.
420. See supratext accompanying note 55.
421. See United States v. Glaxo Group Ltd., 410 U.S. 52 , 59 ( 1973 ). For a summary of the case law, see William C. Holmes, Compulsory Patent and Trademark Licensing: A Frameworkfor Analysis , 12 Loy. U. CHI. L.J. 43 , 44 - 52 ( 1980 ).
422. See generally 3 PHILLIP E . AREEDA & HERBERT HOVENKAMP , ANTITRUST LAW : AN ANALYSIS OF ANTITRUST PRINCIPLES AND THEIR APPLICATION 707j , at 211-12 , 710, at 236- 45 (2d ed. 2002 ).
423. 15 U.S.C. § 4 ( 2006 ) ("The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 1 to 7 of this title; . . . such violation[s] shall be enjoined or otherwise prohibited.").
427. See 1 DAN B. DOBBS , DOBBS LAW OF REMEDIES § 2 .7, at 179- 80 (2d ed. 1993 ) ; 1 POMEROY , supra note 176, §§ 129 - 130 , at 153-58.
428. See United States v. Griffin , 303 U.S. 226 , 229 ( 1938 ).
429. See generally 1 DOBBS , supra note 427, § 2 . 8 ( 6 ), at 213.
430. See Pennsylvania v. Williams , 294 U.S. 176 , 181 ( 1935 ).
431. Weinberger v. Romero-Barcelo , 456 U.S. 305 , 312 ( 1982 ) ; see also Sampson v . Murray , 415 U.S. 61 , 88 ( 1974 ) ; Beacon Theatres, Inc . v. Westover, 359 U.S. 500 , 506 - 07 ( 1959 ). But see RESTATEMENT (SECOND ) OF TORTS § 945 , at 597- 98 ( 1979 ) (proposing a new approach to adequacy); DOUGLAS LAYCOCK , THE DEATH OF THE IRREPARABLE INJURY RULE 265-83 ( 1991 ) (same).
432. See Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 , 75 - 76 ( 1992 ).
433. See 1 DOBBS, supra note 427, § 2 . 5 ( 1 ), at 127.
434. See Schoenthal v. Irving Trust Co., 287 U.S. 92 , 94 ( 1932 ) ; Scott v . Neely , 140 U.S. 106 , 110 ( 1891 ); Green v . Stewart , 45 N.Y.S. 982 , 983 (App. Div. 1897 ).
435. G6mez-Arostegui , supra note 3 , at 1277- 79 . The Supreme Court has held, however, that the existence of traditional concurrent jurisdiction may not necessarily affect the right to ajury trial . See Beacon Theatres , 359 U.S. at 506-07.
436. G6mez-Arostegui , supra note 3 , at 1277- 79 . My article was limited to copyright cases and did not purport to argue (nor exclude the possibility) that concurrent jurisdiction would apply to patent cases .
437. See Tenn . Valley Auth. v. Hill, 437 U.S. 153 , 193 - 94 ( 1978 ).