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| Chilling Effects Clearinghouse > Weather Reports > U.S. Supreme Court to consider whether MercExchange wins an injunction against eBay | 
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|  U.S. Supreme Court to consider whether MercExchange wins an injunction against eBaySara Adibisedeh, Samuelson Law, Technology, and Public Policy Clinic, November 28, 2005 Abstract: On November 28, 2005, the U.S. Supreme Court announced in eBay Inc. v. MercExchange, 2005 U.S. LEXIS 8572 (2005), that it would consider whether an appeals court erred in finding that a permanent injunction barring use of a technology must generally be issued once infringement of a valid patent has been determined. The Court said it would reconsider its own precedents on when it is appropriate to grant an injunction against a patent infringer. The Court will likely hear the case around April and issue a decision by the end of June in 2006. eBay received something rarer than an Xbox 360 this holiday season. The U.S. Supreme Court announced on November 28, 2005 that it would hear eBay’s appeal in its patent fight with MercExchange, an e-commerce technology developer, in eBay Inc. v. MercExchange, 2005 U.S. LEXIS 8572 (2005). The key issue in the case is whether an appeals court erred in finding that a permanent injunction barring use of a technology must automatically be issued once infringement of a valid patent has been determined. eBay stated in its appeal that the ruling reduced a trial court judge's discretion to exceptions involving national health, thus handing a blunt weapon to companies that buy patents to make infringement claims. In its petition for certiorari, eBay lays out the traditional four-factor injunctive relief test. It argues that the four-factor test should apply to patent cases rather than the de facto per se test applied by the Federal Circuit. The four-factor test includes consideration of (i) irreparable harm from not issuing an injunction; (ii) whether an adequate remedy exists in law (damages); (iii) whether the injunction would be in the public interest; and (iv) whether a balance of hardships would tip in the plaintiff’s favor. MercExchange opposes the petition. MercExchange argued against Supreme Court review, saying the principles involved in the case are well established. In its brief, the company first points to the statutory guidelines under patent law. Citing a series of Supreme Court cases that support the patentee’s right to exclusivity, MercExchange argues that eBay’s argument would require overruling long-established precedent. Additionally, MercExchange provides its own argument under the four-factor test, explaining how it would easily fit within that test. In support of eBay’s petition, EFF argues that the Federal Circuit’s per se injunction is inconsistent with statutory patent law and does not consider “countervailing free speech interests.” Regarding free speech, EFF argues that patent rights are “increasingly affecting free expression online” and that consideration of the public interest should not be limited to exceptional cases; rather, those considerations should be routine. EFF states: Arguments for the case will most likely be around April, with a decision expected by the end of June in 2006. The Supreme Court stated that it would reconsider its precedents, including one decided in 1908, on when it is appropriate to grant an injunction against a patent infringer. The present case dates back to 2003, when a federal court ordered eBay to pay MercExchange $35 million for infringing two e-commerce patents that MercExchange charged were key to eBay's "Buy it Now" feature, which handles fixed-price sales. However, the award was later reduced to $29.5 million, and the U.S. District Court declined to issue a permanent injunction. In March, the U.S. Court of Appeals ruled that one of MercExchange's patents was invalid and reduced the damages against eBay to $25 million but reversed the lower court's denial of MercExchange's request for a permanent injunction against eBay. The eBay case has attracted interest among those who believe it has become too easy for so called “patent trolls” to hold businesses hostage through patent suits. Amicus briefs for the case voice the concern that an entitlement to an injunction allows unscrupulous patent owners who do not use their patents to produce a product to threaten products made by other companies that are predominantly noninfringing. Microsoft and Cisco Systems are among the parties filing amicus briefs with the Supreme Court in support of eBay's petition.
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