When a court rules that your company has infringed a competitor’s patent, that’s bad enough. But when the court later finds your company infringed the same patent a second time and then holds your company in contempt—that’s a whole lot worse.
Contempt sanctions can be brutal, so few adjudged infringers would dare try to design around an already infringed patent. However, when the patent covers crucial technology, a company may have little choice.
In 2006, a federal district court in Texas found EchoStar had violated TiVo’s patent for “time warp” technology in digital video recorders (DVRs). This technology allows consumers to record one TV show while watching a different show.
The old test, which the Federal Circuit established in its 1985 decision in KSM Fastening Systems v. H.A. Jones Co., had substantive and procedural components. To determine that, procedurally, a contempt proceeding was appropriate, a court had to find no “colorable difference” between the redesigned product and the originally infringing product. If this threshold was met, the court proceeded to a substantive analysis: A defendant was in contempt if the redesigned product infringed the patent.
On a narrow 7-5 vote, the Federal Circuit ruled that a defendant accused of violating an injunction cannot attack the injunction as vague or overbroad.