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Judge Robinson Denies Motion for Preliminary Injunction

Judge Robinson has issued an order denying a motion for preliminary injunction in a case under the Patent Act, the Defend Trade Secrets Act, and Delaware state law. The case involves a dispute over “hair styling products in the newly-created ‘bond builder’ market category.” The Plaintiffs developed this product and “revenues quickly grew to the tens of millions of dollars.” Defendant L’Oréal then expressed interested in purchasing Plaintiff Olaplex, but eventually withdrew that interest and launched competing products. Plaintiffs brought suit alleging that L’Oréal’s new products infringe the patent-in-suit. Liqwd, Inc., et al. v. L’Oréal USA, Inc., et al., C.A. No. 17-14-SLR, Memo. Or. at 2-3 (D. Del. July 6, 2017).

Addressing possible irreparable harm, Judge Robinson concluded, crediting the testimony of Plaintiffs’ expert over that of Defendants’ expert, that “defendants are [Plaintiff] Olaplex’s direct competitor in what is a two-player national market. . . . [t]he record shows that Olaplex will continue to face price pressures and declining revenues based upon competition by the accused products. . . . As the ‘bond builder’ market category is new and growing, it is likely that plaintiffs will be harmed by direct competition in their primary market. . . . Therefore, irreparable harm weighs in favor of plaintiffs.” Id. at 13-14. Judge Robinson also concluded that the balance of equities favored Plaintiffs, considering that “Olaplex is a one-product company focused on a specific market category from which it derives all of its revenues [while] Defendants are elements of a multinational corporate entity, and the accused products account for a small percentage of revenues.” Id. at 14.

Addressing the likelihood of success injunction factor, on the other hand, Judge Robinson concluded that “[w]ere the court inclined to accept plaintiffs’ contention that applicant acted as its own lexicographer, the court would most likely conclude that claim 1 is indefinite.” Id. at 3-8. Judge Robinson concluded that the Plaintiffs had not demonstrated a likelihood of success in proving infringement due to possible indefiniteness and because “the specification does not support the meaning plaintiffs now assert” under plain and ordinary meaning or the patentee’s lexicon. Moreover, Plaintiffs did not satisfy the knowledge prong of providing induced infringement. Id. at 9-10. Because “plaintiffs have not demonstrated a likelihood of success on the merits with respect to induced patent infringement . . . the public interest [factor also] weighs against an injunction.” Id. at 14. The Defendants, however, did not demonstrate a likelihood of prevailing on invalidity. Id. at 10-12. For these reasons, Judge Robinson declined to issue a preliminary injunction.

Liqwd, Inc., et al. v. L’Oréal USA, Inc., et al., C.A. No. 17-14-SLR (D. Del. July 6, 2017).

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