Guest View: Supreme Makeover: Software Patent Edition
By Steve Rubin
November 1, 2007 —
(Page 1 of 4)
Patent law is unique in that there is a specialty appellate court designed to hear all appeals. The resultant uniformity in patent law across the country, and the unique challenges around molding a body of law based on technology and "invention," have historically meant that the U.S. Supreme Court rarely rules on patent cases. However, the Supreme Court recently issued four rulings that affect the fundamental tenets of patent law, thus presenting an anomaly to what we've seen in the past and perhaps indicating a harbinger of things to come.
eBay v. MercExchange
U.S. law authorizes the granting of an injunction (a court order prohibiting infringing activity) to a prevailing patent plaintiff. Given the fact that a patent is a property right and a right to exclude others from practicing the invention, when is it appropriate to grant a prevailing patent plaintiff an injunction?
MercExchange sued eBay on a patent relating to the auctioning of items on the Internet. There was a finding that both the patent was valid and that eBay infringed. There was no real dispute that to grant an injunction, the plaintiff must demonstrate that it has suffered an irreparable injury, that monetary damages are inadequate, that the balance of hardships favors the plaintiff, and that the public interest is served.
The lower court said this was a noncommercializing patent owner (sometimes inappropriately called a "patent troll"), and therefore the four-part equity test should be weighed against it. Conversely, the appeals court said that in a patent case, the test should be weighed in favor of the plaintiff. The Supreme Court issued a conflicting "unanimous decision." Three different opinions were issued stating, first, that "categorical rules" used by the lower courts were inappropriate; second, because a patent is a right to exclude and an infringer could be using the patent, two of the factors may automatically be implicated in favor of the patentee (similar to the appeals court test), and third, when one is dealing with a noncommercializing patent owner, two of the factors are implicated against it.