eBay v MercExchange ruling

The long-awaited U.S. Supreme Court ruling regarding the patent dispute between eBay and MercExchange has finally been decided.

This case is of importance because it rules on the strength of the injunction power awarded to patent holders in the United States. In this particular case, MercExchange held business method patents with regards to software search agent and fixed-price listing patents, and tried to get licences from eBay. When this failed eBay was sued and was found to be willfully infringing the patent, and they were subjet to an injunction that threatened to shut down part of the service.

eBay is objecting to the patent, which I hope they get. I mean, how much more generic can you get than getting a patent on selling stuff at a fixed price? However, eBay petitioned to the U.S. Supreme Court to decide on the issue of injunctive power. In the States, patent holders have considerable power to shut down infringers through injunctions, something that became evident with the Blackberry case. eBay has just won the case, which will make it more difficult for patent trolls to affect established businesses. The ruling states:

The traditional four-factor test applied by courts of equity when considering whether to award permanent injunctive relief to a prevailing plaintiff applies to disputes arising under the Patent Act. That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. The decision to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion.

Patent trolls beware.

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