485:
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.
44:
403:
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
553:
397:
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.
484:
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
504:
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
396:
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)
374:
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
402:
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
495:
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.
391:
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.
378:
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.
407:
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
183:
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
559:
953:
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
927:
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
328:, 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
139:
972:
461:, 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.
375:
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).
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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.
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540:
166:
99:
366:, 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
934:
908:
354:, 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
917:
412:
The court noted that it had consistently rejected invitations to replace traditional equitable considerations with a rule allowing automatic injunctions in its
942:
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).
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146:(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
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which stated that there should be no general rule as to when an injunction should issue in a patent case, there were two
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898:
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947:
E-commerce After eBay v. MercExchange, When Should the Courts Enjoin
Infringement of Internet Business Method Patents?
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147:
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to prevent eBay's continued use of its intellectual property, but the District Court denied the request. The
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631:
154:
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The Supreme Court overturned the Federal Circuit's approval of the injunction, holding that nothing in the
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with three and four justices respectively, setting out suggested guidelines for granting injunctions.
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Mylene Mangalindan, WSJ Dec 13 2007 B4, "EBay is Ordered to Pay $ 30 Million in Patent Rift"
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Thus, the Roberts opinion leaned more heavily in favor of granting injunctions in
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695:
303:
142:
2002); motion to amend answer granted, motion to dismiss denied, 271 F. Supp. 2d
785:"Permanent Injunction, A Remedy by Any Other Name is Patently Not the Same: How
132:
161:
2005); rehearing denied, 2005 U.S. App. LEXIS 10220 (Fed. Cir. Apr. 26, 2006);
726:"After Ebay, Inc. v. MercExchange: The Changing Landscape for Patent Remedies"
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363:
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329:
321:
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patent portfolio. When eBay abandoned its effort, MercExchange sued eBay for
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Thomas, joined by Roberts, Stevens, Scalia, Kennedy, Souter, Ginsburg, Breyer
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Summary judgment granted and denied in part to plaintiff and defendants, 271
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635:
413:
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889:
746:"Why Pharmaceutical Firms Support Patent Trolls: The Disparate Impact of
613:
68:
404:
696:"EBay Patent Case Settled; It Owns 'Buy It Now' After 6-Year Battle"
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traditionally used to determine if an injunction should be issued.
150:(E.D. Va. 2003); affirmed in part, reversed in part, vacated, 401
950:
341:
289:
Alito took no part in the consideration or decision of the case.
151:
43:
909:
Patent Injunctions: Is There Life After eBay v. MercExchange?
682:
eBay Inc. and MercExchange, L.L.C. Reach Settlement Agreement
344:
uses practices in its online auction technology for which
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should not be automatically issued based on a finding of
560:
public domain material from this U.S government document
809:"Compulsory Licensing of Nonpracticing Patentees After
973:
United States Supreme Court cases of the Roberts Court
935:
eBay v. MercExchange - from an infringer's perspective
372:
United States Court of Appeals for the Federal Circuit
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patent law and policy blog, June 9, 2006. Excerpt:
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Affects the Patent Right of Non-Practicing Entities"
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62:
55:
34:
453:wrote a concurring opinion, joined by Justices
912:, Corporate Dealmaker Forum blog, May 24, 2006
316:, 547 U.S. 388 (2006), is a case in which the
649:The Supreme Court, 2005 Term — Leading Cases,
8:
532:
530:
480:, wrote in a separate concurring opinion:
284:Kennedy, joined by Stevens, Souter, Breyer
31:
694:Schwanhausser, Mark (February 29, 2008).
576:Schwanhausser, Mark (February 29, 2008).
820:Virginia Journal of Law & Technology
899:Supreme Court (slip opinion) (archived)
684:, eBay press release, February 28, 2008
526:
29:2006 United States Supreme Court case
7:
571:
569:
276:Roberts, joined by Scalia, Ginsburg
627:MercExchange, L.L.C. v. eBay, Inc.
605:MercExchange, L.L.C. v. eBay, Inc.
430:While all eight justices (Justice
318:Supreme Court of the United States
49:Supreme Court of the United States
25:
968:United States Supreme Court cases
849:388 (2006) is available from:
839:eBay Inc. v. MercExchange, L.L.C.
537:eBay Inc. v. MercExchange, L.L.C.
362:and prevailed in a 2003 Virginia
313:eBay Inc. v. MercExchange, L.L.C.
551:
434:did not participate) joined the
42:
320:unanimously determined that an
983:2006 in United States case law
1:
978:United States patent case law
652:120 Harv. L. Rev. 332 (2006).
807:Venkatesan, Jaideep (2009).
763:(1): 331–343. Archived from
757:Mich. Telecomm. Tech. L. Rev
419:New York Times Co. v. Tasini
610:275 F. Supp. 2d 695
464:On the other hand, Justice
113:3872; 74 U.S.L.W. 4248; 78
1004:
890:Oyez (oral argument audio)
744:Helm, Jeremiah S. (2006).
578:"EBay patent case settled"
558:This article incorporates
724:Chao, Bernard H. (2008).
298:
288:
193:
182:
71:, v. MercExchange, L.L.C.
41:
733:Minn. JL Sci. & Tech
348:owns patents, including
796:George Mason Law Review
783:Jones, Miranda (2007).
500:Subsequent developments
422:, 533 U.S. 483 (2001).
489:
410:
399:
932:J. Matthew Buchanan,
915:J. Matthew Buchanan,
700:San Jose Mercury News
632:401 F.3d 1323
482:
468:, joined by Justices
400:
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351:U.S. patent 5,845,265
105:126 S. Ct. 1837; 164
56:Argued March 29, 2006
945:Wiki Legal Comment,
940:Promote the Progress
923:Promote the Progress
811:eBay v. MercExchange
787:eBay v. MercExchange
748:eBay v. MercExchange
383:Opinion of the Court
340:Online auction site
58:Decided May 15, 2006
37:MercExchange, L.L.C.
18:EBay v. MercExchange
918:Is eBay a Gauntlet?
770:on December 6, 2010
444:concurring opinions
426:Concurring opinions
360:patent infringement
326:patent infringement
240:Ruth Bader Ginsburg
951:Wiki Legal Journal
438:penned by Justice
416:law cases such as
204:Associate Justices
906:Steven J. Frank,
662:"eBay Wins Round"
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16:(Redirected from
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583:The Mercury News
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436:majority opinion
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330:four-factor test
189:Court membership
173:1029 (2005).
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802:(4): 1035–1070.
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739:(2): 543–572.
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515:Patent troll
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346:MercExchange
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294:Laws applied
252:Samuel Alito
247:
235:
228:David Souter
223:
211:
200:John Roberts
123:Case history
98:
66:
35:eBay Inc. v.
26:
826:(1): 26–47.
638: 2005).
616: 2003).
589:October 14,
281:Concurrence
273:Concurrence
133:F. Supp. 2d
962:Categories
521:References
389:Patent Act
368:injunction
364:jury trial
336:Background
322:injunction
304:§ 283
115:U.S.P.Q.2d
111:U.S. LEXIS
109:641; 2006
77:Docket no.
954:opinion).
636:Fed. Cir.
414:copyright
184:remanded.
165:granted,
159:Fed. Cir.
107:L. Ed. 2d
87:Citations
837:Text of
614:E.D. Va.
509:See also
459:Ginsburg
265:Majority
140:E.D. Va.
69:Half.com
863:Findlaw
774:May 10,
470:Stevens
466:Kennedy
451:Roberts
405:license
178:Holding
928:Power?
902:
896:
893:
887:
884:
881:Justia
878:
875:
869:
866:
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478:Breyer
476:, and
474:Souter
455:Scalia
440:Thomas
302:
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212:·
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792:(PDF)
768:(PDF)
753:(PDF)
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432:Alito
169:
163:cert.
128:Prior
847:U.S.
776:2012
707:2008
591:2017
545:U.S.
493:eBay
457:and
342:eBay
171:U.S.
155:1323
152:F.3d
117:1577
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92:U.S.
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