In a 43-page brief filed on Friday, the US Department of Justice's Office of Solicitor General sided with MercExchange, the Virginia-based patent-holding company that sued eBay for infringing on patents tied to its "Buy It Now" feature.
In 2003, a federal jury found eBay guilty of wilfully infringing on two MercExchange patents related to that feature, which allows shoppers to purchase items without participating in an auction, and ordered it to pay US$25 million in damages. That court, however, decided against issuing an injunction -- that is, forcing a company to stop using a patent in question. It cited several factors, including what it deemed a "growing concern" from the public over key aspects of the patent system.
The US Appeals Court for the Federal Circuit reversed that ruling, deciding that eBay should be subject to an injunction -- and correctly so, the government wrote in its brief. The injunction was put on hold pending eBay's next round of appeals.
The government in its brief -- which also counted support from the US Patent and Trademark Office -- argued that the court handling eBay's appeal did not stick to a "general rule," as critics have suggested, but instead used ample "discretion" in issuing an injunction.
The government said no special exemptions should be made in cases involving companies like MercExchange that do not make products using their patents but instead simply licence them -- a practice that in some cases has earned companies the disparaging title of "patent troll." The government said a 1908 high court decision correctly established that injunctions can occur even if the patent holder itself has "'unreasonably' failed to practice its own invention."
The Supreme Court will begin taking up the general merits of that ruling on March 29, when it is scheduled to hear arguments from both companies. The central question it faces could have wide repercussions: If patent infringement has been determined, under what circumstances is it appropriate for a court to issue an injunction?
eBay has argued that the appeals court's reading is far too narrow. It said the court's decision that a permanent injunction must follow all judgments of infringement unless such a decision would "frustrate an important public need," such as protecting public health, leads to nearly "automatic" injunctions that could disproportionately threaten a company's well-being. A number of patent-dependent high-tech companies and trade associations have also filed briefs in support of eBay's position.
It is long past time that the injunction is enforced.
Patent pirates have a huge propaganda & lobbying machine running 24-7 trying to paint their victims as the bad guys and far too many people are buying it. There are four high profile patent battles being waged right now. In every case there is a real American inventor involved. In one of the current cases the inventor died while a patent pirate was making hundreds of millions on his invention and his heirs only recently got justice while the patent office is being used by the patent pirate to delay such justice.
Very successful companies usually end up full of themselves. They think they can do what they want with other's inventions. Patent pirates pick one fight after another, and generally get away with killing hundreds of innovators spirits before they run into one who kicks the tar out of them. These are usually huge cases with damages running from hundreds of millions of dollars to a billion or more dollars.
Once patent pirates poor conduct started coming back to haunt them they started conniving to change patent law to facilitate such theft. They are desperate because they have incurred huge liabilities. And they are terrified that someone will invent something which makes them irrelevant by disrupting their market with a better product. They know that all they ever invent is small incremental improvements, and that the breakthrough inventions mostly come from independent inventors and their small businesses.
American innovators and small business have always been the fuel which has driven our incredible success. What is at stake here is rather America will continue to be the land of opportunity where someone who works hard can start in a garage and build a huge techno local powerhouse or will our system be rigged like much of the rest of the world where it is impossible for someone with a dream to challenge the vested interests. The real issue is will well heeled companies be able to take others innovations with impunity
Ronald J Riley, President
Professional Inventors Alliance
www.PIAUSA.org
RJR"at"PIAUSA.org
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RJR Direct # (202) 318-1595