Nokia Corp. v. InterDigital, Inc.
645 F.3d 553
| 2d Cir. | 2011Background
- InterDigital alleged Nokia infringed its patents, ITC investigations were initiated and consolidated, Nokia sought to stay ITC and compel arbitration under a 1999 Nokia-InterDigital agreement, Nokia obtained a March 2008 preliminary injunction with a $500,000 bond, the Second Circuit vacated the injunction and remanded, InterDigital incurred substantial legal fees and costs in complying with the injunction, and the district court denied InterDigital's motion to recover against the bond.
- During the injunction period, Nokia and InterDigital proceeded with arbitration and ITC posts were deconsolidated; InterDigital seeks recovery of costs incurred in staying ITC, preparing to arbitrate with Nokia, and deconsolidating ITC Proceedings, arguing damages exceed the bond.
- The district court denied recovery in a one-paragraph order, applying the proximate-cause standard from Blumenthal and holding InterDigital failed to show damages were proximately caused.
- InterDigital appeals contending a rebuttable presumption in favor of recovery applies and that damages were proximately caused by the injunction.
- The court vacates the district court’s order and remands for reconsideration with guidance on the presumption and proximate-cause proof.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a presumption favors recovery against an injunction bond. | InterDigital seeks a rebuttable presumption in its favor. | Nokia argues no presumption; must prove damages. | Yes, presumption applies for provable damages. |
| Whether damages must be proximately caused by the injunction. | Damages were proximately caused by the wrongful injunction. | Damages must be causally linked to the injunction. | Damages must be proximately caused; the question is remanded for clearer findings. |
| Whether collateral costs of complying with the injunction are recoverable. | Costs incurred in staying ITC, arbitrating, and deconsolidation are recoverable. | American Rule generally bars recovery of attorney fees; but not for collateral compliance costs. | Collateral compliance costs may be recoverable; remand for further assessment. |
Key Cases Cited
- Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 910 F.2d 1049 (2d Cir.1990) (damages must be proximately caused by the injunction up to bond amount; standard for Rule 65(c) damages)
- Global NAPs, Inc. v. Verizon New Eng., Inc., 489 F.3d 13 (1st Cir.2007) (presumption for recoverable provable damages up to bond amount)
- Nintendo of Am., Inc. v. Lewis Galoob Toys, Inc., 16 F.3d 1032 (9th Cir.1994) (rebuttable presumption for recovering provable damages up to bond amount)
- Coyne-Delany Co., Inc. v. Capital Dev. Bd. of Ill., 717 F.2d 385 (7th Cir.1983) (presumption in favor of awarding injunction damages; implicit Rule 65(c) presumption)
- Travelers Casualty & Surety Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443 (2007) (American Rule context for fee shifting; general rule against attorney-fee recovery)