Copyright Injunctions after eBay: An Empirical Study
73 Pages Posted: 30 May 2012 Last revised: 7 Jun 2012
Date Written: January 6, 2012
An interesting yet less explored aspect of the eBay decision, in which the Supreme Court upheld the four-factor test under traditional principles of equity in the patent injunction context, is that the decision referred to what it characterized as long-term practice in copyright law to support the equitable power of lower courts to deny permanent injunctions. This ruling was made against the backdrop of widespread patent holdup where patent owners used the threat of injunctive relief to extract royalties grossly disproportionate to the value of the patented feature to the whole product. The holdup problem, however, is not equally obvious in copyright law.
A close examination of the copyright cases cited in eBay reveals that they are hardly compelling authorities with respect to copyright injunction. The history of copyright law appears to suggest that injunctive relief was routinely available to copyright owners who had succeeded on the merits. More remarkably, empirical evidence shows that the majority of post-eBay decisions on copyright injunctions have totally ignored the eBay decision as well as the four-factor test advocated therein. Even among the cases that did cite eBay, most courts were reluctant to withhold injunctive relief upon a finding of copyright infringement.
This Article argues that the traditional practice of copyright law and the apparent indifference toward the eBay decision may have resulted from rational choices of judges. Copyright holdup is much less pervasive than patent holdup, as interchangeable copyrighted works abound in the marketplace, and copyright law contains built-in mechanisms to control the holdup problem. Copyright injunctions also involve a distinct set of policy concerns, such as reputational harm, fair use, statutory damages, and freedom of speech. Hence, this Article proposes several approaches to reconcile the unique concerns in copyright law and the four-factor test mandated by eBay, with a focus on three scenarios that are particularly susceptible to the holdup problem.
Keywords: Copyright, Injunction, eBay, Injunctive Relief, Intellectual Property, Property Rules, Liability Rules
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