March 13th, 2006
Patents in the news again as Supreme Court hears eBay case
The Supreme Court will hear oral arguments in a patent dispute between eBay and a patent troll named MercExchange. At issue is whether companies that make no attempt to put their patents into practice are deserving of protection, reports Anne Broach at News.com.
Specifically, eBay is accused of violating MercExchange patents in their Buy it Now feature.
In a 43-page brief filed Friday, the U.S. 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 willfully 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 $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 U.S. 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 Court will consider a 1908 ruling that said injunctions can occur even if the patent holder itself has "’unreasonably’ failed to practice its own invention."
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?
