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."
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.”
