EBay Arrives at Supreme Court: A Landmark Patent Case

eBay v. MercExchange (on petition for certiorari).

The Supreme Court has agreed to review the question of “when it is appropriate to grant an injunction against a patent infringer” and will question the century-old precedent of Continental Paper Bag (1908).

The issues before the Court include:

1. Whether the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement. (Question proposed by eBay).
2. Whether this Court should reconsider its precedents, including Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908), on when it is appropriate to grant an injunction against a patent infringer. (Question proposed by Supreme Court).

 In its petition for certiorari, eBay spells out the traditional four-factor test for injunctive relief and argues that the four-factor test should apply to patent cases rather than the de facto per se test applied by the CAFC.  The four-factor test includes consideration of:

1. Irreparable harm from not issuing an injunction;
2. Whether an adequate remedy exists in law (damages);
3. Whether the injunction would be in the public interest; and
4. Whether a balance of hardships would tip in the plaintiff’s favor. 

According to regarded patent law professor Joseph Miller, this certiorari decision is breathtaking. “If the Court writes narrowly, it will be the most important patent case since Chakrabarty or Diehr. If the Court writes broadly, it will be the most important patent case (perhaps even the most important patent or copyright case) in a century.”

An injunction in this case would not threaten eBay’s core business, but is directed to the “buy-it-now” feature of the online auctioneer.

Links:

• Discussion of the petition and reply
• Discussion of eBay’s petition
• CAFC Opinion in MercExchange v. eBay
• Reexam of MercExchange’s Patents 
• Wegner's Patent Cases
• Supreme Court’s Decision on Cert