474:
selling goods but, instead, primarily for obtaining licensing fees. ... For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent. ... When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest. In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.
33:
392:
patents” and “its lack of commercial activity in practicing the patents” would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue. Id., at 712. But traditional equitable principles do not permit such broad classifications. For example, some patent holders, such as university researchers or self-made inventors, might reasonably prefer to
542:
386:
that the public interest would not be disserved by a permanent injunction. The decision to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. (...) Neither the
District Court nor the Court of Appeals below fairly applied these principles.
473:
In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases. An industry has developed in which firms use patents not as a basis for producing and
493:
On July 30, 2007, the
District Court once again issued an order denying the injunction, ruling that, based on MercExchange's history of licensing or attempting to license the patent, monetary damages of $ 30 million was a sufficient remedy. On February 28, 2008, the parties announced that they had
385:
That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4)
363:
reversed the
District Court in 2005, stating that there was a "general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances." Following the reversal, eBay took its case to the Supreme Court, where it prevailed. In the majority opinion the
391:
Although the
District Court recited the traditional four-factor test, 275 F.Supp.2d, at 711, it appeared to adopt certain expansive principles suggesting that injunctive relief could not issue in a broad swath of cases. Most notably, it concluded that a “plaintiff's willingness to license its
484:
and similar cases, while the
Kennedy opinion expressed skepticism, particularly where the validity of the patent has also been challenged and remains unsettled. Neither of these concurring opinions carries the force of law, since neither was supported by a majority of the Court.
380:
eliminated the traditional reliance on weighing the equitable factors considered in determining whether an injunction should issue. But it also ruled that
District Court erred in denying an injunction on the basis that MercExchange does not itself practice the patented invention.
367:
As the legal battle dragged on, MercExchange cut its workforce from more than 40 employees to just three. MercExchange also was derided as a "patent troll" – inventors who use the threat of injunctions to extract hefty legal settlements for violating patents of dubious value.
396:
their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do
172:
Court of
Appeals erred in directing issuance of a permanent injunction against eBay, adjudged to have infringed a patent, without applying traditional four-factor injunction standard. Order of Federal Circuit Court of Appeals vacated and
548:
942:
This article is part of a study to determine if a wiki community can produce high quality legal research, Nov. 18, 2006 (this article suggests a solution for the confusion caused by the
Supreme Court's splintered
916:
Did the
Supreme Court throw down the gauntlet, i.e., issue a challenge, to Congress in its eBay v. MercExchange decision? Did the Court, in essence, challenge Congress to clarify its exercise of the Patent
317:, but also that an injunction should not be denied simply on the basis that the plaintiff does not practice the patented invention. Instead, a federal court must still weigh what the Court described as the
128:
961:
450:, pointing out that from "at least the early 19th century, courts have granted injunctive relief upon a finding of infringement in the vast majority of patent cases," by applying the four-factor test.
364:
Supreme Court concluded that a permanent injunction in patent infringement cases can be issued only if the plaintiff can show that the issue satisfies a four-factor test (see below).
360:
147:
494:
reached a settlement after six years of litigation. Under the settlement, MercExchange was to assign the patents to eBay; the terms of the settlement were otherwise confidential.
831:
529:
155:
88:
355:, which found eBay had willfully infringed the MercExchange's patents and ordered a payment of nearly $ 30 million in damages. Following the verdict, MercExchange sought an
923:
897:
343:, which covers eBay's "Buy it Now" function – over 30 percent of the company's business. In 2000, eBay initiated negotiations to outright purchase MercExchange's
906:
401:
The court noted that it had consistently rejected invitations to replace traditional equitable considerations with a rule allowing automatic injunctions in its
931:
patent law and policy blog, June 20, 2006 (a tongue-in-cheek look at the case from the viewpoint of a manufacturer who might be infringing a patent or two).
956:
135:(E.D. Va. 2002); permanent injunction denied, judgment as a matter of law granted and denied in part, final judgment entered in part, 275 F. Supp. 2d
971:
966:
714:
935:
306:
288:
37:
344:
431:
which stated that there should be no general rule as to when an injunction should issue in a patent case, there were two
407:
887:
734:
936:
E-commerce After eBay v. MercExchange, When Should the Courts Enjoin
Infringement of Internet Business Method Patents?
928:
911:
976:
636:
598:
377:
136:
132:
124:
359:
to prevent eBay's continued use of its intellectual property, but the District Court denied the request. The
650:
620:
143:
842:
376:
The Supreme Court overturned the Federal Circuit's approval of the injunction, holding that nothing in the
835:
533:
159:
80:
435:
with three and four justices respectively, setting out suggested guidelines for granting injunctions.
566:
860:
797:
447:
348:
314:
228:
432:
458:
196:
851:
661:
Mylene Mangalindan, WSJ Dec 13 2007 B4, "EBay is Ordered to Pay $ 30 Million in Patent Rift"
571:
424:
670:
454:
428:
220:
208:
773:
475:
869:
536:
466:
443:
232:
204:
69:
950:
503:
462:
439:
420:
334:
240:
216:
188:
480:
Thus, the Roberts opinion leaned more heavily in favor of granting injunctions in
83:
684:
292:
131:
2002); motion to amend answer granted, motion to dismiss denied, 271 F. Supp. 2d
774:"Permanent Injunction, A Remedy by Any Other Name is Patently Not the Same: How
121:
150:
2005); rehearing denied, 2005 U.S. App. LEXIS 10220 (Fed. Cir. Apr. 26, 2006);
715:"After Ebay, Inc. v. MercExchange: The Changing Landscape for Patent Remedies"
356:
352:
339:
318:
310:
151:
103:
99:
347:
patent portfolio. When eBay abandoned its effort, MercExchange sued eBay for
257:
Thomas, joined by Roberts, Stevens, Scalia, Kennedy, Souter, Ginsburg, Breyer
120:
Summary judgment granted and denied in part to plaintiff and defendants, 271
753:
624:
402:
95:
878:
735:"Why Pharmaceutical Firms Support Patent Trolls: The Disparate Impact of
602:
57:
393:
685:"EBay Patent Case Settled; It Owns 'Buy It Now' After 6-Year Battle"
321:
traditionally used to determine if an injunction should be issued.
139:(E.D. Va. 2003); affirmed in part, reversed in part, vacated, 401
939:
330:
278:
Alito took no part in the consideration or decision of the case.
140:
32:
898:
Patent Injunctions: Is There Life After eBay v. MercExchange?
671:
eBay Inc. and MercExchange, L.L.C. Reach Settlement Agreement
333:
uses practices in its online auction technology for which
313:
should not be automatically issued based on a finding of
549:
public domain material from this U.S government document
798:"Compulsory Licensing of Nonpracticing Patentees After
962:
United States Supreme Court cases of the Roberts Court
924:
eBay v. MercExchange - from an infringer's perspective
361:
United States Court of Appeals for the Federal Circuit
914:
patent law and policy blog, June 9, 2006. Excerpt:
778:
Affects the Patent Right of Non-Practicing Entities"
282:
269:
261:
253:
248:
177:
166:
116:
111:
75:
65:
51:
44:
23:
442:wrote a concurring opinion, joined by Justices
901:, Corporate Dealmaker Forum blog, May 24, 2006
305:, 547 U.S. 388 (2006), is a case in which the
638:The Supreme Court, 2005 Term — Leading Cases,
8:
521:
519:
469:, wrote in a separate concurring opinion:
273:Kennedy, joined by Stevens, Souter, Breyer
20:
683:Schwanhausser, Mark (February 29, 2008).
565:Schwanhausser, Mark (February 29, 2008).
809:Virginia Journal of Law & Technology
888:Supreme Court (slip opinion) (archived)
673:, eBay press release, February 28, 2008
515:
18:2006 United States Supreme Court case
7:
560:
558:
265:Roberts, joined by Scalia, Ginsburg
616:MercExchange, L.L.C. v. eBay, Inc.
594:MercExchange, L.L.C. v. eBay, Inc.
419:While all eight justices (Justice
307:Supreme Court of the United States
38:Supreme Court of the United States
14:
957:United States Supreme Court cases
838:388 (2006) is available from:
828:eBay Inc. v. MercExchange, L.L.C.
526:eBay Inc. v. MercExchange, L.L.C.
351:and prevailed in a 2003 Virginia
302:eBay Inc. v. MercExchange, L.L.C.
540:
423:did not participate) joined the
31:
309:unanimously determined that an
972:2006 in United States case law
1:
967:United States patent case law
641:120 Harv. L. Rev. 332 (2006).
796:Venkatesan, Jaideep (2009).
752:(1): 331–343. Archived from
746:Mich. Telecomm. Tech. L. Rev
408:New York Times Co. v. Tasini
599:275 F. Supp. 2d 695
453:On the other hand, Justice
102:3872; 74 U.S.L.W. 4248; 78
993:
879:Oyez (oral argument audio)
733:Helm, Jeremiah S. (2006).
567:"EBay patent case settled"
547:This article incorporates
713:Chao, Bernard H. (2008).
287:
277:
182:
171:
60:, v. MercExchange, L.L.C.
30:
722:Minn. JL Sci. & Tech
337:owns patents, including
785:George Mason Law Review
772:Jones, Miranda (2007).
489:Subsequent developments
411:, 533 U.S. 483 (2001).
478:
399:
388:
921:J. Matthew Buchanan,
904:J. Matthew Buchanan,
689:San Jose Mercury News
621:401 F.3d 1323
471:
457:, joined by Justices
389:
383:
340:U.S. patent 5,845,265
94:126 S. Ct. 1837; 164
45:Argued March 29, 2006
934:Wiki Legal Comment,
929:Promote the Progress
912:Promote the Progress
800:eBay v. MercExchange
776:eBay v. MercExchange
737:eBay v. MercExchange
372:Opinion of the Court
329:Online auction site
47:Decided May 15, 2006
26:MercExchange, L.L.C.
907:Is eBay a Gauntlet?
759:on December 6, 2010
433:concurring opinions
415:Concurring opinions
349:patent infringement
315:patent infringement
229:Ruth Bader Ginsburg
940:Wiki Legal Journal
427:penned by Justice
405:law cases such as
193:Associate Justices
895:Steven J. Frank,
651:"eBay Wins Round"
298:
297:
984:
892:
886:
883:
877:
874:
868:
865:
859:
856:
850:
847:
841:
816:
806:
792:
782:
768:
766:
764:
758:
743:
729:
719:
700:
699:
697:
695:
680:
674:
668:
662:
659:
653:
648:
642:
634:
628:
618:
612:
606:
596:
590:
584:
583:
581:
579:
572:The Mercury News
562:
553:
544:
543:
523:
425:majority opinion
342:
319:four-factor test
178:Court membership
162:1029 (2005).
35:
34:
21:
992:
991:
987:
986:
985:
983:
982:
981:
977:EBay litigation
947:
946:
890:
884:
881:
875:
872:
866:
863:
857:
854:
848:
845:
839:
823:
804:
795:
791:(4): 1035–1070.
780:
771:
762:
760:
756:
741:
732:
717:
712:
709:
707:Further reading
704:
703:
693:
691:
682:
681:
677:
669:
665:
660:
656:
649:
645:
635:
631:
614:
613:
609:
592:
591:
587:
577:
575:
564:
563:
556:
541:
524:
517:
512:
500:
491:
417:
374:
338:
327:
231:
221:Clarence Thomas
219:
209:Anthony Kennedy
207:
197:John P. Stevens
107:
46:
40:
25:
19:
12:
11:
5:
990:
988:
980:
979:
974:
969:
964:
959:
949:
948:
945:
944:
932:
919:
902:
893:
861:Google Scholar
822:
821:External links
819:
818:
817:
793:
769:
739:on Innovation"
730:
708:
705:
702:
701:
675:
663:
654:
643:
629:
607:
585:
554:
514:
513:
511:
508:
507:
506:
499:
496:
490:
487:
438:Chief Justice
416:
413:
373:
370:
345:online auction
326:
323:
296:
295:
289:35 U.S.C.
285:
284:
280:
279:
275:
274:
271:
267:
266:
263:
259:
258:
255:
251:
250:
246:
245:
244:
243:
233:Stephen Breyer
205:Antonin Scalia
194:
191:
186:
180:
179:
175:
174:
169:
168:
164:
163:
118:
114:
113:
109:
108:
93:
77:
73:
72:
67:
63:
62:
56:eBay Inc. and
53:
52:Full case name
49:
48:
42:
41:
36:
28:
27:
17:
13:
10:
9:
6:
4:
3:
2:
989:
978:
975:
973:
970:
968:
965:
963:
960:
958:
955:
954:
952:
941:
937:
933:
930:
926:
925:
920:
918:
913:
909:
908:
903:
900:
899:
894:
889:
880:
871:
862:
853:
844:
843:CourtListener
837:
833:
829:
825:
824:
820:
814:
810:
803:
801:
794:
790:
786:
779:
777:
770:
755:
751:
747:
740:
738:
731:
728:(2): 543–572.
727:
723:
716:
711:
710:
706:
690:
686:
679:
676:
672:
667:
664:
658:
655:
652:
647:
644:
640:
639:
633:
630:
626:
622:
617:
611:
608:
604:
600:
595:
589:
586:
574:
573:
568:
561:
559:
555:
552:
550:
539: (2006).
538:
535:
531:
527:
522:
520:
516:
509:
505:
502:
501:
497:
495:
488:
486:
483:
477:
476:
470:
468:
464:
460:
456:
451:
449:
445:
441:
436:
434:
430:
426:
422:
414:
412:
410:
409:
404:
398:
395:
387:
382:
379:
371:
369:
365:
362:
358:
354:
350:
346:
341:
336:
332:
324:
322:
320:
316:
312:
308:
304:
303:
294:
290:
286:
281:
276:
272:
268:
264:
260:
256:
252:
249:Case opinions
247:
242:
238:
234:
230:
226:
222:
218:
214:
210:
206:
202:
198:
195:
192:
190:
187:
185:Chief Justice
184:
183:
181:
176:
170:
165:
161:
157:
153:
149:
145:
142:
138:
134:
130:
126:
123:
119:
115:
110:
105:
101:
97:
91:
90:
85:
82:
78:
74:
71:
68:
64:
61:
59:
54:
50:
43:
39:
29:
22:
16:
922:
915:
905:
896:
827:
812:
808:
799:
788:
784:
775:
761:. Retrieved
754:the original
749:
745:
736:
725:
721:
694:February 29,
692:. Retrieved
688:
678:
666:
657:
646:
637:
632:
623:, 1339 (
615:
610:
593:
588:
576:. Retrieved
570:
546:
525:
504:Patent troll
492:
481:
479:
472:
452:
437:
418:
406:
400:
390:
384:
375:
366:
335:MercExchange
328:
301:
300:
299:
283:Laws applied
241:Samuel Alito
236:
224:
217:David Souter
212:
200:
189:John Roberts
112:Case history
87:
55:
24:eBay Inc. v.
15:
815:(1): 26–47.
627: 2005).
605: 2003).
578:October 14,
270:Concurrence
262:Concurrence
122:F. Supp. 2d
951:Categories
510:References
378:Patent Act
357:injunction
353:jury trial
325:Background
311:injunction
293:§ 283
104:U.S.P.Q.2d
100:U.S. LEXIS
98:641; 2006
66:Docket no.
943:opinion).
625:Fed. Cir.
403:copyright
173:remanded.
154:granted,
148:Fed. Cir.
96:L. Ed. 2d
76:Citations
826:Text of
603:E.D. Va.
498:See also
448:Ginsburg
254:Majority
129:E.D. Va.
58:Half.com
852:Findlaw
763:May 10,
459:Stevens
455:Kennedy
440:Roberts
394:license
167:Holding
917:Power?
891:
885:
882:
876:
873:
870:Justia
867:
864:
858:
855:
849:
846:
840:
619:,
601: (
597:,
545:
467:Breyer
465:, and
463:Souter
444:Scalia
429:Thomas
291:
239:
237:·
235:
227:
225:·
223:
215:
213:·
211:
203:
201:·
199:
70:05-130
834:
805:(PDF)
781:(PDF)
757:(PDF)
742:(PDF)
718:(PDF)
532:
421:Alito
158:
152:cert.
117:Prior
836:U.S.
765:2012
696:2008
580:2017
534:U.S.
482:eBay
446:and
331:eBay
160:U.S.
144:1323
141:F.3d
106:1577
89:more
81:U.S.
79:547
832:547
537:388
530:547
397:so.
156:546
137:695
133:784
125:789
84:388
953::
938:,
927:,
910:,
830:,
813:14
811:.
807:.
789:14
787:.
783:.
750:13
748:.
744:.
724:.
720:.
687:.
569:.
557:^
528:,
518:^
461:,
802:"
767:.
726:9
698:.
582:.
551:.
146:(
127:(
92:)
86:(
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.