Resistance Is Seen on the High Court On Judges’ Flexibility on Patent Injunctions

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The New York Sun

WASHINGTON – Several U.S. Supreme Court justices appeared resistant yesterday to eBay’s call for broader leeway on whether federal courts issue an injunction in a patent-infringement case, although the justices also probed for how they might clarify injunction standards.


“You’re talking about a property right here and a property right is the right to exclude,”Justice Scalia said at oral arguments in eBay v. MercExchange. Justice Scalia wondered why the Supreme Court should rewrite patent laws. “Why can’t we let the marketplace take care of the problem,” he said.


Justice Scalia and several other justices indicated they were worried that watering down the role of injunctions in patent-infringement cases might harm inventor rights in the U.S. patent system. At the same time, some of the justices also probed for whether the Supreme Court should rule that federal trial judges – contrary to a recent lower court ruling by the Washington-based Federal Circuit Court of Appeals – have some discretion to withhold an injunction.


eBay went before the Supreme Court in its quest to avoid a patent injunction for infringing on patents held by MercExchange, a Great Falls, Va., patent holding company. The patents, among other things, deal with eBay’s popular “Buy It Now” feature in online auctions.


The case is being watched closely by both Supreme Court and patent law experts and has been billed as one of the most significant patent appeals to reach the Supreme Court in recent years.


The justices who spoke at the oral arguments made it clear they don’t take changes to the patent procedures lightly.” Are you devaluing the value of a particular patent by denying an injunction,” Chief Justice John Roberts Jr. said. But Justice Roberts also worried about whether some patent holding companies, sometimes called patent trolls by opponents, may be abusing the patent system by leveraging questionable patents with the power of an injunction threat.


For example, Justice Roberts asked questions about the standards that should apply to inventors who do nothing but hold their patents and about situations where a patent covers a business process that may appear to be somewhat vague. He also asked what should happen if the U.S. Patent & Trademark Office reverses course and denies a patent when it is challenged in a dispute.


The core issue in the case is whether a federal judge should have handed down an immediate injunction barring eBay from infringing on patents held by MercExchange. The justices, reviewing almost 100 years of legal precedent, will decide whether the current standard for patent injunctions should be changed or, at a minimum, clarified.


“The Federal Circuit’s rule is extraordinarily stringent,” a Washington attorney who represented eBay, Carter Phillips, said. Mr. Phillips urged the Supreme Court to give federal judges who handle patent disputes more discretion when deciding whether a company that has infringed on a patent deserves an injunction.


A Washington attorney who represented MercExchange, Seth Waxman, said his client deserved injunction protection that patent law provides. “The jury found by clear and convincing evidence that eBay had infringed,” Mr. Waxman said. He added that changing current standards would upset settled patent law and harm inventor rights.


The fight has split the corporate world. Many technology companies, citing what they believe are legal shakedowns from patent holders that don’t make any products, want the Supreme Court to ease precedent that calls for injunctions in many patent judgments. Biotechnology, pharmaceutical, and other business segments that rely heavily on the development of single-product patents want strong injunction standards to remain in place.


The New York Sun

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