Supreme Court to hear patent injunction case

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Besides, 200 years of patent law have affirmed the patent holder's exclusive right to keep others from using his invention, others siding with MercExchange have argued, adding that allowing judges broader discretion to withhold injunctions will "water down" the entire system.

"It should not come from places like the judge reading one of (a reporter's) very interesting stories in the paper and...saying, 'People think there's a problem with drug patents,'" Philip Johnson, chief patent counsel for Johnson & Johnson, told reporters at a recent roundtable discussion.

It's conceivable that, using the right standard, eBay still loses, but the rest of us win.

--Jonathan Band, outside counsel, Computer and Communications Industry Association

The Bush adminsistration, which had argued against an injunction for alleged patent-infringer RIM in its spat, instead agreed in its brief with the need for an injunction against eBay.

At the same time, the administration said a four-part test is the most appropriate standard for deciding whether an injunction should apply. That test involves weighing not only the public interest but also other factors, such as whether the patent owner would experience irreparable harm if an injunction weren't granted or whether other remedies, such as monetary compensation, would be enough.

If the Supreme Court listens to that suggestion, the tech industry would get a boost, said Jonathan Band, outside counsel for the Computer and Communications Industry Association, which filed a brief in support of eBay. That group, like the other tech entities on eBay's side, isn't so much interested in whether eBay is ultimately enjoined from using MercExchange's patents as it is in solidifying what it considers a more stringent standard for issuing injunctions, Band said.

"It's conceivable that, using the right standard, eBay still loses, but the rest of us win," he said.

The injunction question before the high court may seem obscure, but it's actually one of several major points of contention in a larger debate about state of the U.S. patent system. Reform proposals underway in Congress have stalled amid fractures primarily along high-tech and pharmaceutical or biotechnology industry lines, which have surfaced again in this case.

Origins of MercExchange v. eBay
The inventions at the heart of the case date back to nearly five months before eBay's launch on Labor Day 1995, when MercExchange founder Tom Woolston filed his first application for a patent describing an "electronic market" for buying and selling goods. That application was initially rejected, according to eBay's brief, though the Patent Office went on to accept it in 1998. According to MercExchange's brief, Woolston, an electrical engineer and patent attorney, drew up a business plan, hired programmers and planned to commercialize his patents.

EBay took notice of Woolston's patents, even approaching MercExchange in 2000 with interest in snapping up its portfolio. But negotiations between the two sides crumbled, as did MercExchange's attempts to raise capital to support its ventures. In September 2001, the firm filed suit against eBay, accusing it of using its patents in its "Buy It Now" feature, which allows shoppers to circumvent the auction process and purchase items at a fixed price.

A jury found eBay guilty of infringing on two of Woolston's patents in 2003, and the court ordered eBay to pay about $25 million in damages--but decided against issuing a permanent injunction. It cited several factors for justification, including MercExchange's "willingness to license" and nonpractice of its patents and what it termed a "growing concern" from the public over key aspects of the current patent system.

The U.S. Appeals Court for the Federal Circuit found flaws in the lower court's reasoning. It held that a permanent injunction must follow all infringement findings unless cutting off the patent in question would "frustrate an important public need," such as protecting public health. That injunction, however, remained on hold pending eBay's Supreme Court appeal.

Go, Ebay, Go!

The very notion that 'buy it now' is patentable is, pardon the pun, patently stupid.

The real threat to innovation are these patent squatters who keep software and other high tech companies perpetually worried they'll be sued into bankruptcy over a patent that covers mundane, plainly obvious concepts that should have been laughed out of the patent office when the application was filed.

Invent a new encryption algorithm after a year of research? Create a new drug after a decade of R&D investment? Sure thats patentable.

'Buy it now'? Get real.

[kjharris]

Patents Unlimited

It's obvious to me that our patent office needs a complete re-do. They need a new set of goals and a complete rethinking of what a patent is and what kinds of things are patentable. They seem to have fallen into a fixed mode(and a midguided one in my view) of determining on what basis a patent can be issued. Someone in our administration needs to take things in hand and get(or force)this agency to operate on a rational basis.

Go, Ebay, Go!

The very notion that 'buy it now' is patentable is, pardon the pun, patently stupid.

The real threat to innovation are these patent squatters who keep software and other high tech companies perpetually worried they'll be sued into bankruptcy over a patent that covers mundane, plainly obvious concepts that should have been laughed out of the patent office when the application was filed.

Invent a new encryption algorithm after a year of research? Create a new drug after a decade of R&D investment? Sure thats patentable.

'Buy it now'? Get real.

[kjharris]

Patents Unlimited

It's obvious to me that our patent office needs a complete re-do. They need a new set of goals and a complete rethinking of what a patent is and what kinds of things are patentable. They seem to have fallen into a fixed mode(and a midguided one in my view) of determining on what basis a patent can be issued. Someone in our administration needs to take things in hand and get(or force)this agency to operate on a rational basis.

[sbwinn]

The Real Problem

The patent office needs to buy an ounce of common sense. It
seems to be largely clueless when it comes to technology. "Buy
It Now" and "One Click" should not be patented technologies.

For anyone who thinks it's not a problem, remember that jerk
who held a patent on online shoping carts (never should have
been issued)? He never sued any major company for fear of
losing his patent rights. Instead he contented himself with
extorting smaller companies (at $30,000 a pop) who did not
have the means to fight prolonged court battles. When asked
what his actual business was he replied, "defending my patents".

[sbwinn]

The Real Problem

The patent office needs to buy an ounce of common sense. It
seems to be largely clueless when it comes to technology. "Buy
It Now" and "One Click" should not be patented technologies.

For anyone who thinks it's not a problem, remember that jerk
who held a patent on online shoping carts (never should have
been issued)? He never sued any major company for fear of
losing his patent rights. Instead he contented himself with
extorting smaller companies (at $30,000 a pop) who did not
have the means to fight prolonged court battles. When asked
what his actual business was he replied, "defending my patents".