South-Western Legal Studies in Business

Injunctions against Use of Infringed Patent Must Meet Strict Test
Description Supreme Court held that when patent infringement has been held to exist, and when an injunction against further infringement is requested instead of money damages, the patent holder must satisfy a four-factor test to justify the injunction.
Topic Intellectual Property
Key Words Patents; Infringement; Injunction; Damages
C A S E   S U M M A R Y
Facts MercExchange owns a patent that covers a business method for the sale of goods on the Internet. It attempted to license its patent to eBay, but negotiations did not produce an agreement. MercExchange then sued for patent infringement and won a jury finding that the patent was valid, that it had been infringed, and that damages were due. That ruling was appealed. MercExchange requested a permanent injunction against eBay for using the business method. The trial court refused to issue the injunction; the appeals court reversed. eBay appealed.
Decision

Vacated and remanded. A plaintiff seeking a permanent injunction must show that: 1) it has suffered irreparable injury; 2) remedies at law, such as money damages, are inadequate to compensate for that injury; 3) considering balance of hardships between plaintiff and defendant, remedy in equity is warranted; and 4) public interest would not be disserved by the injunction. These factors apply to patent disputes as other disputes. Injunctive relief may be possible in this case, but the factors must be shown to the trial judge to warrant that action.

Citation eBay v. MercExchange, 126 S.Ct. 1837 (Sup. Ct., 2006)

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