(Slip Opinion) OCTOBER TERM, 2005 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

EBAY INC. ET AL. v. MERCEXCHANGE, L. L. C. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE FEDERAL CIRCUIT 

No. 05–130. Argued March 29, 2006—Decided May 15, 2006 

Petitioners operate popular Internet Web sites that allow private sellers to list goods they wish to sell. Respondent sought to license its 

business method patent to petitioners, but no agreement was 

reached. In respondent’s subsequent patent infringement suit, a jury

found that its patent was valid, that petitioners had infringed the 

patent, and that damages were appropriate. However, the District 

Court denied respondent’s motion for permanent injunctive relief. In 

reversing, the Federal Circuit applied its “general rule that courts 

will issue permanent injunctions against patent infringement absent 

exceptional circumstances.” 401 F. 3d 1323, 1339. 

Held: The traditional four-factor test applied by courts of equity when

considering whether to award permanent injunctive relief to a prevailing plaintiff applies to disputes arising under the Patent Act.

That test requires a plaintiff to demonstrate: (1) that it has suffered 

an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance

of hardships between the plaintiff and defendant, a remedy in equity 

is warranted; and (4) that the public interest would not be disserved 

by a permanent injunction. The decision to grant or deny such relief

is an act of equitable discretion by the district court, reviewable on

appeal for abuse of discretion. These principles apply with equal 

force to Patent Act disputes. “[A] major departure from the long tradition of equity practice should not be lightly implied.” Weinberger v. 

Romero-Barcelo, 456 U. S. 305, 320. Nothing in the Act indicates 

such a departure. Pp. 2–6. 

401 F. 3d 1323, vacated and remanded. 

THOMAS, J., delivered the opinion for a unanimous Court. ROBERTS, 
2 EBAY INC. v. MERCEXCHANGE, L. L. C. 

Syllabus 

C. J., filed a concurring opinion, in which SCALIA and GINSBURG, JJ., 

joined. KENNEDY, J., filed a concurring opinion, in which STEVENS, 

SOUTER, and BREYER, JJ., joined. 
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Cite as: 547 U. S. ____ (2006) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

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notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

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SUPREME COURT OF THE UNITED STATES 

No. 05–130 

EBAY INC., ET AL., PETITIONERS v.

MERCEXCHANGE, L. L. C. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE FEDERAL CIRCUIT

[May 15, 2006] 

JUSTICE THOMAS delivered the opinion of the Court. 

Ordinarily, a federal court considering whether to award

permanent injunctive relief to a prevailing plaintiff applies the four-factor test historically employed by courts of 

equity. Petitioners eBay Inc. and Half.com, Inc., argue

that this traditional test applies to disputes arising under 

the Patent Act. We agree and, accordingly, vacate the

judgment of the Court of Appeals. 

I 

Petitioner eBay operates a popular Internet Web site

that allows private sellers to list goods they wish to sell,

either through an auction or at a fixed price. Petitioner 

Half.com, now a wholly owned subsidiary of eBay, operates a similar Web site. Respondent MercExchange,

L. L. C., holds a number of patents, including a business

method patent for an electronic market designed to facilitate the sale of goods between private individuals by 

establishing a central authority to promote trust among 

participants. See U. S. Patent No. 5,845,265. MercExchange sought to license its patent to eBay and Half.com, 

as it had previously done with other companies, but the 
2 EBAY INC. v. MERCEXCHANGE, L. L. C. 

Opinion of the Court 

parties failed to reach an agreement. MercExchange

subsequently filed a patent infringement suit against 

eBay and Half.com in the United States District Court for 

the Eastern District of Virginia. A jury found that MercExchange’s patent was valid, that eBay and Half.com had 

infringed that patent, and that an award of damages was

appropriate.1 

Following the jury verdict, the District Court denied

MercExchange’s motion for permanent injunctive relief. 

275 F. Supp. 2d 695 (2003). The Court of Appeals for the

Federal Circuit reversed, applying its “general rule that

courts will issue permanent injunctions against patent

infringement absent exceptional circumstances.” 401 

F. 3d 1323, 1339 (2005). We granted certiorari to determine the appropriateness of this general rule. 546 U. S 

___ (2005). 

II 

According to well-established principles of equity, a

plaintiff seeking a permanent injunction must satisfy a 

four-factor test before a court may grant such relief. A 

plaintiff must demonstrate: (1) that it has suffered an

irreparable injury; (2) that remedies available at law, such

as monetary damages, are inadequate to compensate for 

that injury; (3) that, considering the balance of hardships

between the plaintiff and defendant, a remedy in equity is

warranted; and (4) that the public interest would not be 

disserved by a permanent injunction. See, e.g., Weinberger 

v. Romero-Barcelo, 456 U. S. 305, 311–313 (1982); Amoco 

Production Co. v. Gambell, 480 U. S. 531, 542 (1987). The 

decision to grant or deny permanent injunctive relief is an

act of equitable discretion by the district court, reviewable 

on appeal for abuse of discretion. See, e.g., Romero-

—————— 

1EBay and Half.com continue to challenge the validity of MercExchange’s patent in proceedings pending before the United States Patent

and Trademark Office. 
Cite as: 547 U. S. ____ (2006) 3 

Opinion of the Court 

Barcelo, 456 U. S., at 320. 

These familiar principles apply with equal force to 

disputes arising under the Patent Act. As this Court has 

long recognized, “a major departure from the long tradition of equity practice should not be lightly implied.” 

Ibid.; see also Amoco, supra, at 542. Nothing in the Patent Act indicates that Congress intended such a departure. To the contrary, the Patent Act expressly provides 

that injunctions “may” issue “in accordance with the principles of equity.” 35 U. S. C. §283.2 

To be sure, the Patent Act also declares that “patents

shall have the attributes of personal property,” §261, 

including “the right to exclude others from making, using,

offering for sale, or selling the invention,” §154(a)(1). 

According to the Court of Appeals, this statutory right to

exclude alone justifies its general rule in favor of permanent injunctive relief. 401 F. 3d, at 1338. But the creation 

of a right is distinct from the provision of remedies for

violations of that right. Indeed, the Patent Act itself 

indicates that patents shall have the attributes of personal

property “[s]ubject to the provisions of this title,” 35

U. S. C. §261, including, presumably, the provision that 

injunctive relief “may” issue only “in accordance with the 

principles of equity,” §283.

This approach is consistent with our treatment of injunctions under the Copyright Act. Like a patent owner, a 

copyright holder possesses “the right to exclude others 

from using his property.” Fox Film Corp. v. Doyal, 286 

U. S. 123, 127 (1932); see also id., at 127–128 (“A copyright, like a patent, is at once the equivalent given by the 

public for benefits bestowed by the genius and meditations 

—————— 

2Section 283 provides that “[t]he several courts having jurisdiction of 

cases under this title may grant injunctions in accordance with the 

principles of equity to prevent the violation of any right secured by

patent, on such terms as the court deems reasonable.” 
4 EBAY INC. v. MERCEXCHANGE, L. L. C. 

Opinion of the Court 

and skill of individuals, and the incentive to further efforts 

for the same important objects” (internal quotation marks

omitted)). Like the Patent Act, the Copyright Act provides

that courts “may” grant injunctive relief “on such terms as

it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U. S. C. §502(a). And as in our 

decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a 

rule that an injunction automatically follows a determination that a copyright has been infringed. See, e.g., New 

York Times Co. v. Tasini, 533 U. S. 483, 505 (2001) (citing 

Campbell v. Acuff-Rose Music, Inc., 510 U. S. 569, 578, n. 10 

(1994)); Dun v. Lumbermen’s Credit Assn., 209 U. S. 20, 23– 

24 (1908). 

Neither the District Court nor the Court of Appeals 

below fairly applied these traditional equitable principles

in deciding respondent’s motion for a permanent injunction. Although the District Court recited the traditional

four-factor test, 275 F. Supp. 2d, at 711, it appeared to

adopt certain expansive principles suggesting that injunctive relief could not issue in a broad swath of cases. Most 

notably, it concluded that a “plaintiff’s willingness to 

license its patents” and “its lack of commercial activity in

practicing the patents” would be sufficient to establish 

that the patent holder would not suffer irreparable harm if 

an injunction did not issue. Id., at 712. But traditional 

equitable principles do not permit such broad classifications. For example, some patent holders, such as university researchers or self-made inventors, might reasonably 

prefer to license their patents, rather than undertake 

efforts to secure the financing necessary to bring their 

works to market themselves. Such patent holders may be

able to satisfy the traditional four-factor test, and we see 

no basis for categorically denying them the opportunity to 

do so. To the extent that the District Court adopted such 

a categorical rule, then, its analysis cannot be squared 
Cite as: 547 U. S. ____ (2006) 5 

Opinion of the Court 

with the principles of equity adopted by Congress. The 

court’s categorical rule is also in tension with Continental 

Paper Bag Co. v. Eastern Paper Bag Co., 210 U. S. 405, 422– 

430 (1908), which rejected the contention that a court of

equity has no jurisdiction to grant injunctive relief to a 

patent holder who has unreasonably declined to use the 

patent.

In reversing the District Court, the Court of Appeals

departed in the opposite direction from the four-factor 

test. The court articulated a “general rule,” unique to 

patent disputes, “that a permanent injunction will issue 

once infringement and validity have been adjudged.” 401 

F. 3d, at 1338. The court further indicated that injunctions should be denied only in the “unusual” case, under 

“exceptional circumstances” and “‘in rare instances . . . to

protect the public interest.’” Id., at 1338–1339. Just as 

the District Court erred in its categorical denial of injunctive relief, the Court of Appeals erred in its categorical

grant of such relief. Cf. Roche Products v. Bolar Pharmaceutical Co., 733 F. 2d 858, 865 (CAFed 1984) (recognizing

the “considerable discretion” district courts have “in determining whether the facts of a situation require it to 

issue an injunction”). 

Because we conclude that neither court below correctly

applied the traditional four-factor framework that governs 

the award of injunctive relief, we vacate the judgment of 

the Court of Appeals, so that the District Court may apply 

that framework in the first instance. In doing so, we take

no position on whether permanent injunctive relief should

or should not issue in this particular case, or indeed in any 

number of other disputes arising under the Patent Act. 

We hold only that the decision whether to grant or deny 

injunctive relief rests within the equitable discretion of the

district courts, and that such discretion must be exercised 

consistent with traditional principles of equity, in patent

disputes no less than in other cases governed by such 

standards. 
6 EBAY INC. v. MERCEXCHANGE, L. L. C. 

Opinion of the Court 

Accordingly, we vacate the judgment of the Court of

Appeals, and remand for further proceedings consistent

with this opinion. 

It is so ordered. 
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Cite as: 547 U. S. ____ (2006) 1 

ROBERTS, C. J., concurring 

SUPREME COURT OF THE UNITED STATES 

No. 05–130 

EBAY INC., ET AL., PETITIONERS v.

MERCEXCHANGE, L. L. C. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 15, 2006] 

CHIEF JUSTICE ROBERTS, with whom JUSTICE SCALIA 

and JUSTICE GINSBURG join, concurring. 

I agree with the Court’s holding that “the decision 

whether to grant or deny injunctive relief rests within the 

equitable discretion of the district courts, and that such

discretion must be exercised consistent with traditional 

principles of equity, in patent disputes no less than in

other cases governed by such standards,” ante, at 5, and I 

join the opinion of the Court. That opinion rightly rests on 

the proposition that “a major departure from the long

tradition of equity practice should not be lightly implied.” 

Weinberger v. Romero-Barcelo, 456 U. S. 305, 320 (1982); see 

ante, at 3. 

From at least the early 19th century, courts have

granted injunctive relief upon a finding of infringement in

the vast majority of patent cases. This “long tradition of

equity practice” is not surprising, given the difficulty of

protecting a right to exclude through monetary remedies 

that allow an infringer to use an invention against the

patentee’s wishes—a difficulty that often implicates the

first two factors of the traditional four-factor test. This 

historical practice, as the Court holds, does not entitle a 

patentee to a permanent injunction or justify a general rule 

that such injunctions should issue. The Federal Circuit 

itself so recognized in Roche Products, Inc. v. Bolar Pharma-
2 EBAY INC. v. MERCEXCHANGE, L. L. C. 

ROBERTS, C. J., concurring 

ceutical Co., 733 F. 2d 858, 865–867 (1984). At the same 

time, there is a difference between exercising equitable

discretion pursuant to the established four-factor test and

writing on an entirely clean slate. “Discretion is not whim, 

and limiting discretion according to legal standards helps

promote the basic principle of justice that like cases 

should be decided alike.” Martin v. Franklin Capital Corp.,

546 U. S. ___, ___ (2005) (slip op., at 6). When it comes to 

discerning and applying those standards, in this area as

others, “a page of history is worth a volume of logic.” New 

York Trust Co. v. Eisner, 256 U. S. 345, 349 (1921) (opinion

for the Court by Holmes, J.). 
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Cite as: 547 U. S. ____ (2006) 1 

KENNEDY, J., concurring 

SUPREME COURT OF THE UNITED STATES 

No. 05–130 

EBAY INC., ET AL., PETITIONERS v.

MERCEXCHANGE, L. L. C. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[May 15, 2006] 

JUSTICE KENNEDY, with whom JUSTICE STEVENS, 

JUSTICE SOUTER, and JUSTICE BREYER join, concurring. 

The Court is correct, in my view, to hold that courts

should apply the well-established, four-factor test— 

without resort to categorical rules—in deciding whether to

grant injunctive relief in patent cases. THE CHIEF 

JUSTICE is also correct that history may be instructive in

applying this test. Ante, at 1–2 (concurring opinion). The 

traditional practice of issuing injunctions against patent

infringers, however, does not seem to rest on “the difficulty of protecting a right to exclude through monetary 

remedies that allow an infringer to use an invention 

against the patentee’s wishes.” Ante, at 1 (ROBERTS, C. J., 

concurring). Both the terms of the Patent Act and the 

traditional view of injunctive relief accept that the existence of a right to exclude does not dictate the remedy for 

a violation of that right. Ante, at 3–4 (opinion of the

Court). To the extent earlier cases establish a pattern of

granting an injunction against patent infringers almost as

a matter of course, this pattern simply illustrates the 

result of the four-factor test in the contexts then prevalent. The lesson of the historical practice, therefore, is 

most helpful and instructive when the circumstances of a 

case bear substantial parallels to litigation the courts have 

confronted before. 
2 EBAY INC. v. MERCEXCHANGE, L. L. C. 

KENNEDY, J., concurring 

In cases now arising trial courts should bear in mind

that in many instances the nature of the patent being 

enforced and the economic function of the patent holder 

present considerations quite unlike earlier cases. An 

industry has developed in which firms use patents not as a 

basis for producing and selling goods but, instead, primarily 

for obtaining licensing fees. See FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law 

and Policy, ch. 3, pp. 38–39 (Oct. 2003), available at 

http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited 

May 11, 2006, and available in Clerk of Court’s case file).

For these firms, an injunction, and the potentially serious

sanctions arising from its violation, can be employed as a

bargaining tool to charge exorbitant fees to companies that 

seek to buy licenses to practice the patent. See ibid. 

When the patented invention is but a small component of 

the product the companies seek to produce and the threat

of an injunction is employed simply for undue leverage in 

negotiations, legal damages may well be sufficient to

compensate for the infringement and an injunction may

not serve the public interest. In addition injunctive relief

may have different consequences for the burgeoning number of patents over business methods, which were not of

much economic and legal significance in earlier times. 

The potential vagueness and suspect validity of some of

these patents may affect the calculus under the four-factor 

test. 

The equitable discretion over injunctions, granted by the

Patent Act, is well suited to allow courts to adapt to the 

rapid technological and legal developments in the patent 

system. For these reasons it should be recognized that 

district courts must determine whether past practice fits

the circumstances of the cases before them. With these 

observations, I join the opinion of the Court.