Monday, November 28, 2005

SUPREME COURT PATENT CASES BEGIN TO HEAT UP: In a surprising move, the Supreme Court announced that it will grant EBay's petition for certiorari and review whether the U.S. Court of Appeals for the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement. In effect, eBay is asking the court to say that injunctive relief in successful patent infringement cases will be decided on a case-by-case basis, and not by default (which has been the law since 1908).

While this is a significant development, EBay has apparently engaged in triage and abandoned its claim that they did not willfully infringe. According to MercExchange, if the Court decides against the automatic granting of a permanent injunction, this will mean that the court will agree to supervise all future payments for infringement throughout the life of the patent, which runs to 2015.

Also, a lot of buzz is being generated over Illinois Tool Works v. Independent Ink, which is scheduled for oral argument on Tuesday. The court will determine whether Illinois Tool Works violated antitrust laws under the Sherman Act by forcing consumers of its patented ink jet printer to buy a specific type of printer ink for use with its printer (a practice known as "tying").

According to Shaheen Pasha from CNN, for consumers the case boils down to a central question: If you buy a company's patented printer, should you also have to buy that company's ink ... even if there is a compatible and cheaper ink available from a small aftermarket supplier? And if you have to do it for printer ink, do you also have to do it for other supplies tied to a bigger product?

For major patent holders (and their investors), there is an equally straightforward counter-question: Shouldn't a company that has invested time and money into developing a patented printer have the right to protect the quality of its technology – as well as its profits – by requiring a user to only buy its brand of ink?

This promises to be an action-packed year for the Supreme Court, which is on pace to hear the largest number of patent cases in a single year . . .

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