[Random-bits] Text of Kennedy, Stevens, Souter, Breyer concurring opinion in eBay, Inc. v. MercExchange, LLC

[James Love]

This is the text of the Kennedy, Stevens, Souter, Breyer view on the
granting of injunctive relief in patent cases, from eBay, Inc. v.
MercExchange, LLC.  There are apparently 4 votes on the US Supreme
court for a more critical and skeptical view of current US patent
policy.  Jamie

http://laws.findlaw.com/us/000/05-130.html


Justice Kennedy, with whom Justice Stevens, Justice Souter, and
Justice Breyer join, concurring.

      The Court is correct, in my view, to hold that courts should
apply the well-established, four-factor test--without resort to
categorical rules--in deciding whether to grant injunctive relief in
patent cases. The Chief Justice is also correct that history may be
instructive in applying this test. Ante, at 1-2 (concurring opinion).
The traditional practice of issuing injunctions against patent
infringers, however, does not seem to rest on "the difficulty of
protecting a right to exclude through monetary remedies that allow an
infringer to use an invention against the patentee's wishes." Ante,
at 1 (Roberts, C. J., concurring). Both the terms of the Patent Act
and the traditional view of injunctive relief accept that the
existence of a right to exclude does not dictate the remedy for a
violation of that right. Ante, at 3-4 (opinion of the Court). To the
extent earlier cases establish a pattern of granting an injunction
against patent infringers almost as a matter of course, this pattern
simply illustrates the result of the four-factor test in the contexts
then prevalent. The lesson of the historical practice, therefore, is
most helpful and instructive when the circumstances of a case bear
substantial parallels to litigation the courts have confronted before.

      In cases now arising trial courts should bear in mind that in
many instances the nature of the patent being enforced and the
economic function of the patent holder present considerations quite
unlike earlier cases. An industry has developed in which firms use
patents not as a basis for producing and selling goods but, instead,
primarily for obtaining licensing fees. See FTC, To Promote
Innovation: The Proper Balance of Competition and Patent Law and
Policy, ch. 3, pp. 38-39 (Oct. 2003), available at http://www.ftc.gov/
os/2003/10/innovationrpt.pdf (as visited May 11, 2006, and available
in Clerk of Court's case file). For these firms, an injunction, and
the potentially serious sanctions arising from its violation, can be
employed as a bargaining tool to charge exorbitant fees to companies
that seek to buy licenses to practice the patent. See ibid. When the
patented invention is but a small component of the product the
companies seek to produce and the threat of an injunction is employed
simply for undue leverage in negotiations, legal damages may well be
sufficient to compensate for the infringement and an injunction may
not serve the public interest. In addition injunctive relief may have
different consequences for the burgeoning number of patents over
business methods, which were not of much economic and legal
significance in earlier times. The potential vagueness and suspect
validity of some of these patents may affect the calculus under the
four-factor test.

      The equitable discretion over injunctions, granted by the
Patent Act, is well suited to allow courts to adapt to the rapid
technological and legal developments in the patent system. For these
reasons it should be recognized that district courts must determine
whether past practice fits the circumstances of the cases before
them. With these observations, I join the opinion of the Court.


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James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
tel. +1.202.332.2670 / mobile +1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton