Aevoe Corp. v. AE Tech Co., Ltd.

In an appeal challenging an alteration to a previously granted preliminary injunction, the U.S. Court of Appeals for the Federal Circuit found that it lacked jurisdiction over an appeal because the appeal was filed more than 30 days after the original injunction and the subsequent alteration did not substantially change the legal relationship between the parties. Aevoe Corp. v. AE Tech Co., Ltd., Case No. 12–1422 (Fed. Cir., Aug. 29, 2013) (O'Malley, J.).

Aevoe sought a preliminary injunction barring sales of AE Tech products that allegedly infringed Aevoe's patent relating to screen protectors for hand-held electronic devices. After AE Tech failed to respond, the district court granted the preliminary injunction, ordering that AE Tech and "any persons acting in concert or participation with them, or having knowledge of this Order by personal service or otherwise" were preliminarily enjoined from practicing the patent or any "colorable imitation" thereof. Neither AE Tech nor its distributors appealed the original injunction within the available time period.

At AE Tech's request and without opposition from Aevoe, the district court removed the colorable imitation language from the preliminary injunction. AE Tech made revisions to its product, but the district court held that the revised product was a non-functional and trivial attempt to design around the patent and "not more than colorably different than the enjoined products." The district court reintroduced the colorable imitation language and named AE Tech's distributors in the preliminary injunction. The distributors were not parties to the lawsuit when the original injunction was granted, but Aevoe provided notice to the distributors within a week after the original injunction issued and named them in the lawsuit before the injunction was altered. The district court held AE Tech and its distributors in contempt of the preliminary injunction. AE Tech and the distributors appealed the addition of the colorable imitation language to the injunction. The distributors appealed the addition of their names to the injunction.

The Federal Circuit found that it lacked jurisdiction over the appeal. The Court reasoned that to determine whether a redesigned product falls under the strictures of an existing injunction the primary question is whether the new product is "colorably different" from the old product. Given this legal standard, the Federal Circuit found that colorable imitations were within the scope of the earlier injunctions, whether or not such terms were explicitly mentioned therein.
The Federal Circuit further reasoned that the distributors fell within the express language of the original injunction, whether or not they were explicitly named as enjoined parties, because the original injunction was directed to "any persons acting in concert" with AE Tech or having knowledge of the order. The Federal Circuit determined that the distributors had notice of the original injunction and were "acting in concert" with AE Tech in connection with the resale of the redesigned products. By virtue of the distribution agreement, the distributors were "privies" of AE Tech, did not act independently of AE Tech and were subject to the original injunction.

Neither the addition of "colorable imitation" nor the addition of the distributors to the injunction altered the legal relationship between the parties, because the additions merely clarified the original injunction. Accordingly, the alterations did not reset the time period available for an appeal, and the Federal Circuit dismissed the appeal for lack of jurisdiction.

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