The Aftermath of eBay V. MercExchange, 126 S. Ct. 1837 (2006): A Review of Subsequent Judicial Decisions

Abstract:     
In Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908), the Supreme Court recognized that patents are property and as a general rule a patent owner was entitled to permanent injunctive relief as a remedy for infringement. This was the rule followed by the federal circuit until it was overruled by the Supreme Court in 2006 in eBay v. MercExchange, 126 S. Ct. 1837 (2006). eBay held that permanent injunctive relief is an equitable remedy subject to the discretion of the trial court. Additionally, the grant or denial of a permanent injunction should be based on evaluation of the traditional four factor test generally used to determine whether permanent injunctive relief should be awarded in any context. Under this test a patent owner can only obtain a permanent injunction as a remedy for infringement if he or she can demonstrate: (1) that the patent owner suffered an irreparable injury due to the infringement; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that irreparable injury; (3) that, considering the balance of hardships between the patent owner and the infringer, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

This article reviews the federal district court decisions subsequent to eBay with regard to whether permanent injunctions were granted for patent infringement. An analysis of the post-eBay decisions supports the following conclusions: (1) The district courts continue to grant permanent injunctions in most cases; (2) Typically, permanent injunctions continue to issue when the patent owner and the infringer are direct marketplace competitors; (3) Typically, permanent injunctions are denied if the patent owner is a non-practicing entity; and, (4) Other factors such as willful infringement, venue, the existence of a complex invention incorporating a patented feature, the willingness of the patent owner to license the invention and the likelihood of future infringement are not overly predictive with regard to whether patent infringement will result in issuance or denial of a permanent injunction.

Number of Pages in PDF File: 31

Keywords: eBay, patent law, injunctions, remedies, infringement

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