Injunctions Enjoined: Remedies Restructured

I. INTRODUCTION Since its founding, this country has recognized a patent holder's right to exclude. (1) By recognizing this right, the Founders sought to promote innovation, a goal desired by all. One would think, therefore, that the courts would strongly support patent rights, as the United States' economy depends upon innovation. Yet surprisingly, the courts have been reducing the available remedies for patent infringement, making it more difficult for patentees to obtain injunctions. In eBay, Inc. v. MercExchange, L.L. C. , (2) the Supreme Court eliminated the two-decade-old sanctioned practice of granting a permanent injunction against patent infringement after a finding of infringement, absent extraordinary circumstances. (3) As a result, district courts have severely reduced the rate at which they grant permanent injunctions. In the International Trade Commission, another forum that used to all but guarantee patentees an injunction after a finding of infringement, the Federal Circuit's decision in Kyocera Wireless Corp. v. International Trade Commission (4) has also raised the bar for obtaining an injunction for a typical patentee. The practical result of these two cases is that certain patentees who successfully proved infringement of their patents cannot exclude the infringer from practicing the invention. (5) Essentially, courts grant a compulsory license instead of an injunction. Some may view this as a fair result for non-practicing entities (e.g., trolls), but this ignores that certain bedrocks of innovation in this country (e.g., universities and small inventors) are frequently non-practicing entities. Section II of this article discusses the history and impact of eBay. Section III focuses on the background and impact of Kyocera. In Section IV, the article discusses the resulting compulsory-license-like effect of these two decisions and their disparate impact on patentees based upon who they seek to exclude, a direct competitor or a non-practicing entity. II. EBAY V. MERCEXCHANGE A. A History of Injunctive Relief Before eBay In eBay, Inc. v. MercExchange, L.L. C. , the Supreme Court practically eviscerated two decades of Federal Circuit precedent granting permanent injunctive relief virtually every time a valid patent was found to be infringed. (6) The Supreme Court struck down the Court of Appeal's "general rule" that the facts surrounding a finding of patent infringement typically meet the equitable test for injunctive relief absent "exceptional circumstances. " (7) The Supreme Court concluded that granting permanent injunctions almost automatically upon a finding of infringement departed unjustifiably from the historical practice of scrupulously applying the four-factor equitable test applicable to all assessments of whether a complainant is entitled to injunctive relief. (8) Under the four-factor test, patentees, like any other plaintiff seeking injunctive relief, must demonstrate (1) that they have suffered an irreparable injury; (2) that remedies available at law (e.g., money damages) are inadequate to compensate for the injury; (3) that the balance of the hardships warrants a remedy in equity; and (4) that the public interest would not be disserved by a permanent injunction. (9) 1. Genesis of the four-factor equitable test Injunctions trace their roots to Ancient Rome, (10) and made their way to U.S. courts modeled after English courts in equity. From the beginning, courts have refused to issue injunctions as a matter of right. (11) Rather, courts have long recognized the need for "caution, deliberation, and sound discretion" in issuing such a powerful remedy, limiting its application to the finding of great injury without an "adequate or commensurate remedy in damages. " (12) The Supreme Court too has long recognized injunctive relief as a powerful remedy and limited such relief to preventing irreparable injuries that lack an adequate remedy at law. …