COLORADO SPRINGS, Colo. In a closely-watched suit involving eBay Inc.’s Buy It Now service, the U.S. Supreme Court ruled Monday (May 15) that the finding of a patent infringement does not mean that an injunction is automatically issued against the infringing product.
The ruling is a partial setback to Virginia company MercExchange LLC, since it set aside a lower court ruling that eBay must immediately halt the use of technology based on MercExchange patents.
Microsoft Corp. and Intel Corp. were among the technology companies that supported eBay, saying that too many patent claims are being made by “patent mills” that can block the distribution of existing products. By contrast, several pharmaceutical companies had backed MercExchange, because they depend on strong patent threats to protect intellectual property.
Justice Clarence Thomas, writing on behalf of the unanimous court, said the decision should be up to an individual trial judge as to whether infringement warranted the issuance of an immediate injunction. The U.S. Court of Appeals had ruled that, in most cases, a trial judge must issue a permanent injunction preventing the patents from being infringed.
In cases such as eBay and the Research In Motion Inc. suit, the courts have argued whether judges should impose mandatory fines as an alternative to injunctions that prevent the use of patents in products that already are widely used.
MercExchange had won a jury trial, where the jury awarded the Virginia company $35 million for eBay’s alleged infringement of fixed-price purchase options for consignment goods. A trial judge later reduced the amount to $5.5 million.