April 14, 2009 by Jonathan Giraldi (IPilogue Editor)
Although a patent is typically seen as a right to exclude others, the willingness of American courts to automatically provide that right through a permanent or preliminary injunction has been affected by the Supreme Court of the United States in Ebay v. MercExchange (547 U.S. 388 (2006)). In a recent article, Prof. Richard Epstein argues that this will have serious consequences and potentially reduce the flow of inventions.
The Ebay case concerned a company that owned a business-method patent for an electronic market, and was in negotiations to license that technology to two website operators. After the parties failed to reach an agreement, the patentee brought a successful patent infringement suit against both website operators. The District Court, however, denied injunctive relief on the basis that the plaintiff company was willing to license its patent and was not actively practicing the patented invention. The Supreme Court in stating that both the District and Appeal courts had failed to apply the proper test, made it clear that an injunction will not automatically follow a finding of patent infringement.