The US Supreme Court last Wednesday opened arguments in a case that is expected to change the granting of injunctions in patent cases and could potentially lead to a weakening of patent protection.
But in the first hearing in eBay Inc et al v MercExchange LLC on March 29, justices questioned eBay's arguments that the US Court of Appeals for the Federal Circuit had made it a general rule that courts should grant patent owners an injunction against infringers.
"You're talking about a property right, and the property right is explicitly the right to exclude others," Justice Antonin Scalia said, according to Reuters. Justice John Roberts took a similar view, arguing that injunctions were the norm in typical patent infringement cases.
The case goes back to 2001 when patent licensing company MercExchange accused eBay of infringing two of its e-commerce patents with its Buy it Now feature. The US District Court deciding the case, contrary to normal practice, awarded monetary damages to MercExchange, but not an injunction. The Federal Circuit overturned the decision, granting an injunction, which was frozen pending the outcome of the Supreme Court decision.
While eBay challenges the Federal Circuit's general practice of issuing injunctions, putting defendants in a difficult position, the Supreme Court is taking the case a step further, bringing into question the use of injunctions in all US patent cases.
In light of the recent dispute between patent licensing company NTP and BlackBerry, the case is also expected to bring more clarity about the rights of patent trolls – companies that make a profit by hoarding patents and licensing them to companies that need the protected technology – which increasingly make a habit of suing and getting injunctions granted against companies that infringe their patents.
While most IT companies would like to see the courts take a more relaxed approach to injunctions and patent owners, pharmaceutical companies oppose reducing patent protection.
The Supreme Court's ruling is expected in June. Carter Phillips of Sidley Austin Brown & Wood is acting for eBay, and Scott Robertson of Hunton & Williams represents MercExchange.
On March 21, the Supreme Court also heard arguments in Laboratory Corporation of America Holdings v Metabolite Laboratories Inc, another key patent case which is expected to shake up the long-needed reform to the US patent system. In this case, Jonathan Franklin of Hogan & Hartson is counsel for LabCorp, and Glenn Beaton of Gibson Dunn & Crutcher represents Metabolite.
