Document ID: ./input/supremecourt_opinions/opinions/05pdf/05-130.pdf
Page Number: 12.0

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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 Innova-
tion:  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 num-
ber  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.