Source: http://www.ipsofactoj.com/DecidedCases/international/2007/part07/int2007(07)-012.htm
Timestamp: 2019-02-17 09:25:47
Document Index: 784418424

Matched Legal Cases: ['art 7', '§283', '§261', '§154', '§261', '§283', '§502', '§261', '§283', '§502']

eBay Inc v MercExchange LLC [USSC]
IpsofactoJ.com: International Cases [2007] Part 7 Case 12 [USSC]
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 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]
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-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 favour 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 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 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”).
(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 Pharmaceutical 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. 132 (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.).
(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.
[1] EBay and Half.com continue to challenge the validity of MercExchange’s patent in proceedings pending before the United States Patent and Trademark Office.
[2] Section 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.”
Weinberger v Romero-Barcelo, 456 U. S. 305 (1982)
Amoco Production Co v Gambell, 480 U. S. 531 (1987)
Fox Film Corp v Doyal, 286 U. S. 123 (1932)
New York Times Co v Tasini, 533 U. S. 483 (2001)
Campbell v Acuff-Rose Music, Inc., 510 U. S. 569 (1994)
Dun v Lumbermen’s Credit Assn., 209 U. S. 20 (1908)
Continental Paper Bag Co v Eastern Paper Bag Co., 210 U. S. 405 (1908)
Roche Products v Bolar Pharmaceutical Co., 733 F. 2d 858 (CAFed 1984)
Roche Products, Inc v Bolar Pharmaceutical Co., 733 F. 2d 858 (1984)
Martin v Franklin Capital Corp., 546 U. S. 132 (2005)
New York Trust Co v Eisner, 256 U. S. 345 (1921)
Patent Act, 35 U. S. C. §261, §283
Copyright Act 17 U. S. C. §502(a)
FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, ch. 3, pp. 38–39 (Oct. 2003), at http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited May 11, 2006, and available in Clerk of Court’s case file)
Carter G. Phillips, Richard D. Bernstein, Virginia A. Seitz & Allan M. Soobert for the petitioners.
Seth P. Waxman, Paul R. Q. Wolfson, Scott L. Robertson, Gregory N. Stillman, Jennifer A. Albert, David M. Young & Brian M. Buroker for the respondent.
Jeffrey P. Minear, Solicitor General Clement, Assistant Attorney General Barnett, Acting Assistant Attorney General Katsas, Deputy Solicitor General Hungar, Anthony J. Steinmeyer, David Seidman, Mark R. Freeman, John M. Whealan, Cynthia C. Lynch, and Heather F. Auyang for the United States as amicus curiae in support of respondent.