EBay had asked the Court to review the question of whether an
injunction should always be imposed in cases where one party had
been found to infringe the patent of another.
In this case, argued eBay, the patent holder – a company known
as MercExchange – does not make use of its own patents and exists
only to sue others. It should not therefore be entitled to an
injunction.
According to reports, a group of 35 intellectual property
lawyers filed a brief with the Court in support of eBay, arguing
that restrictions on the discretion of courts to grant injunctions
would give patent holders an edge in patent disputes – which may be
unfair if the patent relates to only a tiny part of the product or
service which is alleged to be in breach.
Lobby group the Electronic Frontier Foundation (EFF)
also filed a friend-of-the-court brief in support of the
auction house.
“We're not saying injunctive relief is never a good idea," said
EFF Staff Attorney Corynne McSherry at the time. "But courts must
have the ability to look at how an injunction will affect a variety
of public interests. That's especially true now, when so many
companies are claiming patents on basic technologies that citizens
use to communicate online."
Background
The dispute between eBay and MercExchange has been running since
October 2001, and hinges on an auction site patent application that
was filed a few months before eBay was launched in 1995.
It relates to the "Buy It Now" service on the eBay site, which
deals with fixed price sales, and a facility to search other online
auction houses. In May 2003, a jury decided that these services did
infringe on the patents, and ordered the online auction leader to
pay $35 million in damages.
The case then went back to the trial judge, who had the option
of increasing the damages awarded – up to three times the existing
award – and issuing a permanent injunction against the company,
preventing eBay from using the patented technology.
In the end he did neither, and in August 2004 he reduced the
award to $29.5 million and refused to grant an injunction.
EBay appealed, and in March 2005 the US Court of Appeals for the
Federal Circuit found that the comparison shopping patent was
invalid, and reduced the damages imposed on eBay to $25
million.
However the Appeals Court then imposed an injunction on the
firm, finding that, unless there were exceptional circumstances, a
district court should issue a permanent injunction after a finding
of infringement. The injunction was stayed pending an appeal to the
Supreme Court.
The Supreme Court has now agreed to hear that appeal – probably
in the spring of next year.
"MercExchange remains confident in its view that it will
ultimately prevail in its struggle against this infringer," said
attorney for the firm, Scott Robertson. "Since eBay's argument
requires overruling long-established legal precedent, we look
forward to the consideration of the Supreme Court in this
matter.”
"Today's ruling does nothing that effects the validity or
infringement of the patents in suit. By admitting to the
infringement in their Supreme Court petition, eBay abandoned any
pretence of innocence," he added. "The bottom line is whether we
will be able to obtain a permanent injunction on eBay's buy-it now
operations or whether the court will force a compulsory
license."
In a statement, eBay said that it was “gratified that the
Supreme Court has agreed to hear this important case.”
