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Supreme Court Reverses Dangerous Injunction Rule in eBay Patent Case
Four Justices Question Patent Trolls and Business Methods Patents in Concurring Opinion
San Francisco - The United States Supreme Court reversed a lower court decision in the controversial eBay v. MercExchange patent case Monday, invalidating a dangerous precedent that threatened free speech and consumers' rights. Four justices also joined in a concurring opinion questioning so-called "patent trolls" and business methods patents, which could foreshadow future intellectual property showdowns in the nation's highest court.
In Monday's decision, the court unanimously held that issuing automatic injunctions in patent cases improperly removed discretion from trial judges to weigh competing factors, including the effect that enforcing the patent would have on the public interest. This follows the reasoning outlined in a friend-of-the-court brief filed by the Electronic Frontier Foundation (EFF), which urged the justices to overrule the lower court and protect the public interest in free speech, innovation, and education.
"More and more people are using the Internet to exercise free speech and other individual rights," said Staff Attorney Jason Schultz, one of the authors of the EFF brief. "The court's ruling will allow judges to protect those rights in patent cases."
The lower court's ruling stemmed in part from a misperception that patents are just like other forms of property, with the same rights and remedies. However, Supreme Court rulings have repeatedly emphasized that patents are a unique form of property, designed to achieve a specific public purpose: the promotion of scientific and industrial progress. Additionally, the concurrence written by Justice Anthony Kennedy and joined by Justices David Souter, John Paul Stevens, and Stephen Breyer noted that the current patent system may be suffering ill effects from business method patents and so-called "patent troll" companies.
"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," Justice Kennedy wrote. "In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods … the potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test."
As a result of the Supreme Court's opinion, the case will now return to the trial court to reconsider its decision on the injunction.
For the full Supreme Court opinion:
For Justice Kennedy's concurring opinion:
For EFF's amicus brief:
For EFF's patent-busting project:
Electronic Frontier Foundation