March 29, 2006 11:40 AM PST

Supreme Court hears eBay's patent appeal

WASHINGTON--In a dispute that's part of a broader debate over the future of the patent system, some U.S. Supreme Court justices suggested Wednesday that the patent at the heart of a suit against eBay may be too vague and trivial to even be taken seriously.

During oral arguments that lasted about an hour, Justice Stephen Breyer suggested that if eBay's "Buy it Now" feature could be patented, "then maybe A&P could patent its process for a supermarket."

Patent holder MercExchange sued eBay in September 2001, accusing it of patent infringement through the "Buy it Now" feature, which allows shoppers to halt the auction process and purchase items at a fixed price. A federal appeals court sided with MercExchange and granted it an injunction against eBay. The injunction is currently on hold.

Chief Justice John Roberts drew laughter from the usually taciturn court audience when he made a quip about his interpretation of MercExchange's patent. "It's displaying pictures of your wares on a computer monitor and picking the ones you want. I might be able to do that.

"It's not (like the patent describes) the internal combustion engine," he added. "It's very vague."

The case has drawn an unusual amount of attention because it could have a profound influence on the way patent injunctions are issued. That question assumed a high profile in recent months when Research In Motion's wildly popular BlackBerry service, which was itself at the center of a heated patent dispute, faced the threat of a shutdown.

Many of the nation's largest software, hardware and Internet companies have sided with eBay in their own briefs, warning that "near automatic" injunctions threaten day-to-day business operations and give too much power to owners of patents of dubious quality.

Individual inventors and pharmaceutical giants, on the other hand, have opposed the online auctioneer, arguing that patent holders have an exclusive right to keep others from using their inventions and that allowing judges broader discretion to withhold injunctions will "water down" the entire system.

It's nearly impossible to discern how the justices will vote based on their remarks during oral arguments, and whether they agree with the validity of the disputed patent may not even come into play. Some members of the court did express sympathy with MercExchange's position, and most of them indicated that injunctions are an important right for inventors.

MercExchange a patent troll?
Justice Antonin Scalia questioned eBay's argument that companies should be treated differently if they don't actually use the patents they own in business--such companies are often derisively called "patent trolls."

"Why should we draw a distinction between the solo inventor who needs a patent speculation firm to market his invention and somebody else?" Scalia asked. "We're talking about a property right here, and a property right is the exclusive right to exclude others."

Because MercExchange was in the business of licensing, not commercializing, its patents, money damages are "a completely adequate remedy," eBay attorney Carter Phillips argued.

The appeals court ignored relevant information, Phillips said, including the fact that patent holder MercExchange does not actually use, but only licenses, its various patents related to electronic sales.

CONTINUED: The "four-factor test"…
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6 comments

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wow
Sense from the justices? Of course all software patents need to be invalidated, which will likely never happen, to the detriment of everyone, even those abusing software patents. Copyright is all software needs.
Posted by Bill Dautrive (1179 comments )
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Breath of fresh air
Some of these justices sound like they actually have a clue about the
current silly state of the patent system.

But unfortunately, as the article notes, this particular case is about
a narrow issue of how and when injunctions can be imposed, and may not
even get into the issue of whether this patent is any good to begin with.
Posted by Jackson Cracker (272 comments )
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Patent life spans...
Besides the fact that the patent office seems willing to allow any one to patent anything including how one picks their noses or how a knat farts the other issue that needs to be dealt with is the length of time something can be patented. A patent should only be good for 10 years. Once that time expires it is open for anyone to use at no charge.

But, the copyrights should work the same way. They should be good for 20 years and then it goes in to the public domain.

Both of these things would keep inovation alive instead allowing companies and people to keep milking the same old dead rotting cow.

But, then greed and stupidity always wins out when you deal with business, government and lawyers.

Robert
Posted by Heebee Jeebies (632 comments )
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What's patentable about "virtual"?
The patent in question includes the word "virtual". Does that make it new? Does removing the "virtual" or "automatic" ascpect from the patent description make it something that existed before? If so, patent should not have been granted.

Turing proved in 1936 that any process that can be described can be automated on a "universal computer". If an existing process (perhaps allowing a buyer in an auction, not an online one, to buy the same product for a fixed price) is implemented using a computer, the result should not be granted a patent, since the "added" element of automation using a general purpose computer is trivial: it is well known that a general purpose computer can be used to automate any process. It was the reason computers were invented (the discovery that a universal computer is possible and can actually be built and told to do anything that can be described using language), and no one should be granted exclusive rights on applying this well known fact in particular settings. Any computer "expert" knows that a general purpose computer with appropriate software can replace any component that acts on input in a well defined way. This is standard practice nowadays.

So any patent that refers to implementation of anything using a computer should be subject to this kind of check: does the same thing or similar thing existed before without the general purpose computer element? If so patent should not be granted!
Posted by hadaso (468 comments )
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The parmaceuticals are shooting their own feet
BY comparing the development of new drugs or any other invention process that requires extensive research and real innovation with the mere trivial automation of well known processes using computers the parmaceuticals are shooting their own feet!!!
Posted by hadaso (468 comments )
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A&P did patent a supermarket
Funny comment from the bench... but IIRC, A&P did originally patent the supermarket. Trouble is, as I have heard it told, their patent had the aisles connected at alternate ends, so you had to walk the entire length back and forth in order to get through it. Competitors left the ends of the aisles open so you could walk around freely, thus avoiding the patent, and having a better store at the same time.
Posted by fgoldstein (144 comments )
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