Posts Tagged: "Ebay v. Mercexchange"

The concurring opinion of Justice Kennedy is even more unfortunate. Like Chief Justice Roberts, while agreeing with Justice Thomas’ holding that the traditional “four-factor” test applied to the grant of injunctive relief in patent cases, Justice Kennedy’s concurring opinion went even further to suggest that “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 patent cases.” As Justice Kennedy saw it, “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.” What is particularly distressing about Justice Kennedy’s concurring opinion is the further comments he makes about injunctive relief in the context of patents on “business methods.”

the United States Court of Appeals for the Federal Circuit determined that the United States Federal District Court for the Southern District of California abused its discretion when it refused to award a victorious patent plaintiff a permanent injunction where the patentee directly competes with the infringer. The case is Presidio Components v. American Technical Ceramics. The opinion was authored by Chief Judge Rader and joined by Judge Plager and Judge Wallach. Perhaps this case will be a turning point, something of a Twisted Sister moment. You know — “we’re Not gonna take it, no, we ain’t gonna take it, we’re not gonna take it anymore…” I sure hope so!

Yesterday, the Judge Koh of the United States District Court for the Federal Circuit denied Apple’s request for a permanent injunction in their ongoing patent war over smartphones with Samsung. The denial of the injunction will allow Samsung to continue to sell phones found to infringe Apple’s patents. How can that make sense to anyone? The patentee, who has already won, must establish entitlement to an order to exclude ongoing and future infringement under a four-factor test that balances equities? What good is a patent? Why did the Patent Office even bother reviewing the patent in the first place then? Why do we pretend that there is an exclusive right in the first place? And the most ignorant elements of the anti-patent community have the audacity to refer to a patent as a monopoly? Give me a break!

Perhaps the infringer lobby needs a refresher course on the rights granted to a patent owner. 35 U.S.C. § 271(a) says: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” (emphasis added). So, as it turns out, importation of products covered by a patent during the term of the patent are an infringement of the patent rights granted. Let’s not forget that at the end of the day what these Silicon Valley elite are arguing is that it should be more difficult for a patent owner to stop infringement. The wrong-doers are NOT the patent owners who have the audacity to exercise rights granted by the federal government. The wrong-doers are those who infringe those rights and there is absolutely no reason to make it easier for them to engage in infringement.

The Prometheus decision shows that you can never know for sure what the outcome will be once you arrive at the Supreme Court. We also know that the Supreme Court is taking more patent cases now than ever, and those decisions have significant implications for the entire industry above and beyond the patent claims at issue and the parties involved. Your patent portfolio may be at risk because some other company obtained poorly written claims and the Supreme Court has taken the opportunity to decide not only the issues before them but to make decisions based on overarching concerns about the entire patent system.

The discussion was lively, perhaps even explosive. You could nearly see sparks fly when Chief Judge Rader continued to pepper Seth Waxman with question after question about his opinion on the propriety of parties lobbying the White House in order to obtain a favorable amici brief from the Department of Justice. Rader zeroed in on the slippery slope and obviously is not pleased with the mixing of law and politics, saying: “this is a cause for concern… Politics and law have a divide.” It is indeed troubling that the White House under both President Bush and President Obama have allowed lobbying by parties who seek a favorable DOJ amici brief. Interpretations of the law shouldn’t be for sale, or appear to be for sale to the largest donors.

Since the Supreme Court’s decision in eBay v. MercExchange there have been 131 cases where a permanent injunction has issued and 43 cases where a permanent injunction has been denied. Some have tried to pass this off as not much of a departure from the practice prior to the Supreme Court’s decision. Such a viewpoint is, however, not correct. Prior to the Supreme Court’s decision it was virtually unheard of for a district court to deny a victorious plaintiff a permanent injunction in patent infringement case. So the Supreme Court’s decision in eBay v. MercExchange has been one that has significantly altered the patent litigation landscape and, therefore, is easily one of the most important Supreme Court patent cases in recent memory.

Don Dunner is a partner with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, and he has argued over 150 cases before the Federal Circuit. Dunner was enormously candid, although many of the things I would have liked to ask him had to be off the table due to ongoing litigation. In fact, Dunner is involved in three exceptionally important cases: TiVo v. Echostar, Microsoft v. i4i and Uniloc v. Microsoft. Thankfully, Dunner did agree to return to talk to us further once these important cases finally resolve without further opportunity for appeal. We did, however, go in depth discussing eBay v. MercExchange, the dynmic between the Supreme Court and the Federal Circuit, how he approaches appeals generally and specifically blow-by-blow and which Federal Circuit Judges ask the toughest questions.

If you are anti-patent then you are anti-innovation because those who innovate are not the behemoths of industry, but rather start-up companies that absolutely require patents in order to attract funding, expand and create jobs. Thus, given the hostility toward patents it is entirely accurate to characterize the Roberts Court as anti-innovation. The Roberts Court increasingly puts hurdles in the way of high-tech job growth. You see, it is easy for anyone to characterize the Supreme Court as “pro-business” because selecting a victor in a “business case” almost necessarily means that a business has been victorious. But what business? One that is likely to innovate, expand, create jobs and form new industry? Or one that once innovated and expanded, but now finds themselves stagnant and laying off employees?

The latest edition of Fortune magazine has John Roberts, Chief Justice of the United States Supreme Court, on the cover proclaiming the Roberts Court to be the most pro-business court we have ever seen. So how can it be that the Roberts Court, which has shown hostility toward innovators and contempt for patents that is unusual, is considered pro-business? On top of that, the Roberts Court seems poised to strike at the very heart of the patent right granted by the United States federal government; namely the presumption of validity. That sure doesn’t sound very pro-business to me.

Last summer J.D. Salinger sued the author/publisher of the book entitled “60 Years Later Coming Through the Rye” for copyright infringement. Salinger claimed that the book was a sequel to his famous book entitled “Catcher in the Rye” and therefore it was an infringing derivative work. The Second Circuit agreed with the district court that Salinger is likely to ultimately prevail in his lawsuit because the book is probably an infringing work which is not protected by the fair use exception to copyright infringement. However, the Second Circuit remanded because it held that the test used by the district court to decide whether to issue a preliminary injunction was no longer the proper test to use in light of the 2006 Supreme Court decision in eBay v. MercExchange, 547 U.S. 388.

On December 21, 2009, I embarked upon identifying the top 10 patent stories of the decade, which ends as we usher in the new year.  The Top 10 Part 1 identified what I thought were in the bottom half of the top 10, and while any top 10 list is sure to be at least somewhat controversial, it seems as…