BAKER HUGHES, INCORPORATED and BAKER PETROLITE CORPORATION v. Nalco Company

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# United States Court of Appeals for the Federal Circuit 2009-1570

BAKER HUGHES, INCORPORATED
and BAKER PETROLITE CORPORATION,

Plaintiffs-Appellees,
V.
NALCO COMPANY,

Defendant-Appellant.

Appeal from the United States District Court for the Southern District of Texas in case
no. 09-CV-1885, Judge Kenneth M. Hoyt.

ON MOTION

Before LOURIE, FRIEDMAN, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

## ORDER

Nalco Company moves for a stay, pending appeal, of the preliminary injunction
entered by the United States District Court for the Southern District of Texas. Baker
Hughes Incorporated et al. (Baker Hughes) oppose. The court considers whether to
vacate the district court's preliminary injunction and remand for further proceedings.

Baker Hughes brought this patent infringement suit alleging that Nalco infringed
its patent related to a method for removing impurities from crude oil during the desalting
process. Baker Hughes sought a preliminary injunction to prevent Nalco from
performing or soliciting the use of the patented process. Nalco opposed the preliminary
injunction motion, arguing, inter alia, that the movants could not meet their burden of

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demonstrating that Baker Hughes would be irreparable harmed without a preliminary
injunction. On September 11, 2009, the court granted Baker Hughes' motion for a
preliminary injunction.

Nalco appeals and seeks to stay the injunction pending appeal. In its motions
papers, Nalco argues, inter alia, that the district court abused its discretion by failing to
make findings regarding whether Baker Hughes would face irreparable harm without a
preliminary injunction. Baker Hughes concedes that the district court "did not explicitly
state its findings of irreparable harm" but argues that a stay is not warranted because
this court may rely on the district court's implicit findings regarding irreparable harm.

As we explained in Nutrition 21 v. United States, 930 F.2d 867, 869 (Fed. Cir.
1991), "[s]ufficient factual findings . .. are necessary to allow this court to have a basis
for meaningful review. ... Otherwise, this court has no basis for evaluating what facts
entered into the district court's analysis or whether the district court's reasoning
comports with the applicable legal standard."); see also Atlantic Thermoplastics Co.,
Inc. v. Faytex Corp., 970 F.2d 834, 837 (Fed. Cir. 1992) (district court's conclusory
statements not sufficient to satisfy Fed. R. Civ. P. 52(a)); Transmatic, Inc. v. Gulton
Indus., Inc., 53 F.3d 1270, 1276 (Fed. Cir. 1995) ("although the district court need not
make elaborate findings on every factual issue raised, it must find and specify as many
subsidiary facts as necessary to inform the reviewing court of the steps by which it
determined factual issues and reached its ultimate conclusions").

Regarding irreparable harm, the district court summarized the parties' contrary
positions but made no findings. That is not enough under this court's cases to provide
meaningful review. Baker Hughes relies on Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d

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1552 (Fed. Cir. 1994) for its argument that the district court need not make express
findings on irreparable harm and that we may thus review implicit findings. However, to
the extent that Reebok permits a district court to decide a motion for a preliminary
injunction without making express findings on all disputed issues, it is expressly limited
to cases involving the denial of a preliminary injunction. See id. at 1556 ("we
specifically decline today to require a district court to articulate findings on the third and
forth factors when the court denies a preliminary injunction because a party fails to
establish either of the two critical factors"). In the circumstances of this case, it was
necessary for the district court to make findings on irreparable harm before granting the
motion for a preliminary injunction.

In the interest of justice, of judicial efficiency and the conservation of the parties'
resources, we determine that the best course in these circumstances is to vacate the
district court's preliminary injunction and remand for further proceedings. The district
court may, if it chooses, issue a new preliminary injunction accompanied by adequate
findings and conclusions. We do not address the parties' other arguments at this time.

Accordingly,

IT IS ORDERED THAT:

1\) The preliminary injunction is vacated and this case is remanded to the
district court for further proceedings.

(2)
Nalco's motion for a stay, pending appeal, is moot.

FOR THE COURT

OCT 0 9 2009

/s/ Jan Horbaly

Date

Jan Horbaly
Clerk

PILED
U.S. COURT OF APPEALS FOR
THE FEDERAL CIRCUIT

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OCT 09 2009
JAN HORBALY
CLERK

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CC:

Michael J. Abernathy, Esq.

Warren W. Harris, Esq.

s19

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