Wednesday, July 27, 2005



EBAY TURNS TO THE SUPREME COURT FOR HELP ON INJUNCTIONS DURING APPEAL: eBay has petitioned the U.S. Supreme Court to hear an appeal on whether eBay and other companies held liable for patent infringement should be routinely subject to injunctions while such cases are on appeal.

eBay and its Half.com subsidiary urged the Supreme Court to consider the matter, saying the stakes go beyond the interest of patent infringement defendants.

eBay alleges that their case presents "an important question of federal patent law with significant implications for the nation's economy." The petition argues that permanent injunctions exact too high a price from defendants, where an enjoined defendant is faced with 3 tough options: redesign its product or the product's functionality to eliminate reliance on the patent, negotiate a license on possibly onerous terms, or cease production or use altogether.

Coincidentally, the issue of patent infringement injunctions is currently before the U.S. Congress as it seeks to draft patent reform legislation. Computer technology companies like eBay, which perpetually face the possibility they might be infringing myriad patents in the course of their business, want Congress to clarify existing rules they say give district court judges discretion (35 U.S.C. section 283) in deciding whether to issue injunctions while patent cases wend their way through the appeals process.

"The Federal Circuit has decided to ignore this rule," eBay wrote.

[Blogger Note - the Federal Circuit left open the possibility of a permanent injunction during the MercExchange appeal]

In an interesting twist, the pharmaceuticals industry, wants to uphold the recent federal circuit court decisions (the same one eBay is appealing) which say injunctions against patent infringers should be standard during appeal except in extraordinary circumstances. Pharmaceuticals and biotech companies tend to face fewer patents in the course of developing a particular product.

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