Smartsky Networks, LLC v. Gogo Business Aviation, LLC

Court of Appeals for the Federal Circuit·Decided January 31, 2024·No. 23-1058·Unpublished

Opinion

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit

SMARTSKY NETWORKS, LLC,

Plaintiff-Appellant

v.

GOGO BUSINESS AVIATION, LLC, GOGO INC., Defendants-Appellees

2023-1058

Appeal from the United States District Court for the District of Delaware in No. 1:22-cv-00266-GBW, Judge Gregory Brian Williams.

Decided: January 31, 2024

RYAN M. CORBETT, Burr & Forman LLP, Tampa, FL, argued for plaintiff-appellant. Also represented by LANCE A. LAWSON, Charlotte, NC; JACK B. BLUMENFELD, RODGER D. SMITH, II, Morris, Nichols, Arsht & Tunnell LLP, Wilmington , DE.

NATHANIEL C. LOVE, Sidley Austin LLP, Chicago, IL, argued for defendants-appellees. Also represented by STEPHANIE P. KOH.

2 SMARTSKY NETWORKS, LLC v. GOGO BUSINESS AVIATION, LLC

Before CHEN, HUGHES, and CUNNINGHAM, Circuit Judges. CUNNINGHAM, Circuit Judge.

SmartSky Networks, LLC (“SmartSky”) appeals from the decision of the United States District Court for the District of Delaware denying SmartSky’s motion for preliminary injunction filed against Gogo Business Aviation, LLC and Gogo Inc. (collectively, “Gogo”). J.A. 2–21 (Decision). The district court found that SmartSky failed to meet its burden to establish that it is likely to succeed on the merits and that it is likely to suffer irreparable harm if a preliminary injunction is not granted. J.A. 13, 16–18, 21. Because the district court did not abuse its discretion in finding that SmartSky failed to meet its burden of establishing irreparable harm, we affirm.

I. BACKGROUND

Gogo and SmartSky are competitors as business aviation network providers, both offering air-to-ground (“ATG”) networks that provide broadband in-flight internet connections to aircrafts. J.A. 21; Appellant’s Br. 4–7; Appellee’s Br. 5–7. On February 28, 2022, SmartSky sued Gogo, alleging that Gogo’s 5G network infringes claims of Smart- Sky’s U.S. Patent Nos. 9,312,947, 11,223,417, 10,257,717, and 9,730,077 (collectively, the “asserted patents”). J.A. 3; J.A. 103. The asserted patents relate to technology that enables wireless in-flight internet connections. See ’947 patent; ’417 patent; ’717 patent; ’077 patent. At the time of the latest filings with this court, Gogo’s 5G network was not yet operational. Oral Arg. at 13:53–14:08, available at https://oralarguments.cafc.uscourts.gov/default.aspx?fl= 23-1058_06052023.mp3; ECF No. 59 at 5 (Gogo’s Opposition to SmartSky’s Motion for Leave to Supplement the Record on Appeal).

On the same day as filing the complaint, SmartSky moved to preliminary enjoin Gogo from making, using, offering to sell, or selling its 5G network. J.A. 3. SmartSky

SMARTSKY NETWORKS, LLC v. GOGO BUSINESS AVIATION, LLC 3

contended that it was likely to successfully prove that Gogo’s 5G network infringes claims 1 and 11 of the ’947 patent , claims 1 and 11 of the ’417 patent, claims 1 and 12 of the ’717 patent, and claims 1 and 2 of the ’077 patent, and that these claims are not likely to be found invalid. J.A. 162–65. SmartSky further asserted that it was likely to suffer irreparable harm absent a preliminary injunction. J.A. 166. On September 26, 2022, the district court denied SmartSky’s motion for preliminary injunction, finding SmartSky had not established a likelihood of success on the merits for any of the asserted patents and had not shown that it was likely to suffer irreparable harm. J.A. 2–21.

SmartSky timely appealed. We have jurisdiction under 28 U.S.C. § 1292(c)(1).

II. STANDARD OF REVIEW

We review a denial of a preliminary injunction according to the law of the regional circuit—here, the Third Circuit —but “give[] dominant effect to Federal Circuit precedent insofar as it reflects considerations specific to patent issues.” Nippon Shinyaku Co. v. Sarepta Therapeutics , Inc., 25 F.4th 998, 1004 (Fed. Cir. 2022) (citation omitted). Under both Federal Circuit and Third Circuit law, we review the denial of a preliminary injunction for an abuse of discretion. Id. (citations omitted); see Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004) (citation omitted). “An abuse of discretion may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.” Koninklijke Philips N.V. v. Thales DIS AIS USA LLC, 39 F.4th 1377, 1379 (Fed. Cir. 2022) (quoting Novo Nordisk of N. Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996)); see Kos Pharms., 379 F.3d at 708.

“To obtain a preliminary injunction, a party must establish that it is likely to succeed on the merits, that it is 4 SMARTSKY NETWORKS, LLC v. GOGO BUSINESS AVIATION, LLC

likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favor, and that an injunction is in the public interest.” Koninklijke, 39 F.4th at 1379–80 (cleaned up) (citation omitted); see Kos Pharms., 369 F.3d at 708 (citation omitted).

III. DISCUSSION

A.

Before addressing SmartSky’s arguments on the merits , we first address SmartSky’s two motions for leave to supplement the record with certain materials not reviewed by the district court. ECF No. 33 (Motion to Supplement) at 3; ECF No. 58 (Second Motion to Supplement) at 3; see Appellant’s Reply Br. 23, 25–27, 31 (citing extra-record materials ). The materials subject to the motion to supplement include: (1) Gogo’s Annual Report for 2022 (Form 10-K); (2) Gogo’s 2022 Fourth Quarter Report and 2023 Q3 Report (Forms 8-K); (3) Gogo’s 2023 Third Quarter Report (Form 10-Q); (4) the transcripts of Gogo’s 2022 Q4 Earnings Call and Gogo’s 2023 Q3 Earnings call; (5) publicly available statements made by Gogo’s CEO during a podcast interview ; and (6) a publicly-available press release issued by Gogo on October 17, 2023. ECF No. 33 at 3; ECF No. 58 at 3. SmartSky requests this court to grant the motion to supplement , or alternatively, take judicial notice of the extra- record, publicly available materials, arguing that these documents would establish certain facts about Gogo’s allegedly infringing equipment relevant to irreparable harm and would directly contradict Gogo’s arguments. See, e.g., ECF No. 33 at 3, 7, 10; ECF No. 58 at 3, 7, 8, 10–12.

We deny SmartSky’s motions to supplement. We “will not consider new evidence on appeal absent extraordinary circumstances, such as those that render the case moot or alter the appropriateness of injunctive relief, a change in pertinent law, or facts of which a court may take judicial notice.” In re Application of Adan, 437 F.3d 381, 388 n.3 (3d Cir. 2006), abrogated on other grounds by Golan v.

SMARTSKY NETWORKS, LLC v. GOGO BUSINESS AVIATION, LLC 5

Saada, 142 S. Ct. 1880 (2022). We likewise strike the relevant portions of SmartSky’s reply brief citing these extra- record materials. Appellant’s Reply Br. 23, 25–27, 31. See Am. Standard Inc. v. Pfizer Inc., 828 F.2d 734, 746 (Fed. Cir. 1987) (striking references to material not considered by the district court and not properly supplemented).

SmartSky asserts that the extra-record documents are relevant to establishing market share, sales, and switching costs from one provider to another. ECF No. 33 at 13–14, 20; ECF No. 58 at 4–5, 11–12. But the district court found no likelihood of irreparable harm despite finding that SmartSky established consumer “stickiness” and that Gogo and SmartSky “compete[] directly.” J.A. 21. Any extra-record materials directed to these facts would not “alter the appropriateness of injunctive relief.” In re Adan, 437 F.3d at 388 n.3. SmartSky also does not argue that there is a change in pertinent law or a mooting event that would justify SmartSky’s motion to supplement. See id.

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