Dissents

In the case of MercExchange v. Ebay, the District Court did deny permanent injunction relief to MercExchange for their internet invention that became such a success once it was released. Once it was taken to Supreme Court, the judges concurred with the judges of the District Court, but they had to stress that the procedures in patent infringement cases should not go over looked. They did proceed to issue the four factor test to MercExchange to decide whether they suffered any damages to their company and MercExchange wanted to use that to delare permanent injunction of their invention. Unfortunately, it was decided that although that had documents proving that the idea was theirs first, they did not have enough to secure the injunction and so, it was a unanimous decision amongst the courts to revoke their motion and allow Ebay and their subsidiaries to use the idea for their profitable gain.

My Own Argument

I had learned a lot when I studied and analyzed this case. Going about having an idea and protecting it from those out there to gain personal interest for themselves requires an extensive research and understanding the laws. MercExchange had a non-patented idea and had originally wanted to license the idea so they could properly petition it to potential buyers. But when no agreement was reached, another company proceeded to use the invention. Timing was off and MercExchange missed their chance. I understand the decision of the courts but I am not sure if I agree with them. MercExchange had proof that the idea was theirs and even though a decision was not made in time, I think that there should be some sort of compensation made by Ebay and their subsidiary. I am glad that an effort was made on behalf of the court and they did not just try to pass it off as some open/shut case. They put up a good fight for what was there’s in the beginning of it all and their particular case opened up possibilities for future cases to be able to have a chance to defend their ideas. So even though MercExchange did not receive the compensation they felt they deserved, it will remind the courts not to take any tasks lightly and to force courts to follow the procedures when dealing with patent-related cases.

Rule of law

In this particular case, the District Court wanted to deny permanent injunctive relief to MercExchange. It was brought up in court that the Patent Act disputed that “A major departure from the long tradition of equity practice should not be lightly implied.” (Weinberger v. Romero-Barcelo, 456 U. S. 305, 320). Also, the Federal Circuit applied its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.” 401 F. 3d 1323, 1339. That led to the four-factor test that is normally applied by courts of equity when the consideration of awarding permanent injunction relief to a plaintiff arises.

Reasoning of the Court

The reasoning of the court took a lot of deliberation on the District Court and the Supreme Court. The major concern was not only on the permanent injunction of the patent invention but also on whether the courts can manage to take every bit of the Patent Act into consideration and make sure not to skip over the procedures when it comes to the process of proving any infringement damages. That includes the four-factor test which can rule whether to grant injunctive relief in any patent cases. The Supreme Court also wanted to stress that “The traditional practice of issuing injunctions against patent infringers 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). Meaning that one cannot use the personal injunction against the one you are accusing to protect the patent from use against the owner’s wishes. The Supreme Court concurred with the District Court stating that the nature of the patent being enforced and the economic function of the patent holder should be taken into consideration. This is due to the fact that the industry has developed to use patents not as a basis for producing and selling goods but instead for obtaining licensing fees making injunctions more important. With all these observations, the courts made their decision.

Decision of the Court

As MercExchange continued to file for a permanent injunction for their Patent Infringement, a jury ruled that the patent was valid and that an award of damages should be given. But the district court denied MercExchange motion for permanent injunctive relief. Meaning that this particular patent is to remain the exclusive ownership of MercExchange. The Courts decided that an injunction should not automatically be issued based on a finding of a patent infringement but they also included that an injunction should not be denied simply on the basis that the plaintiff does not practice the patented invention. However, it will be stressed that the federal court must still issue the four factors to determine if an injunction should be issued whenever a relief is requested. So, the concept is still being used by Ebay and their subsidiary and no injunction was issued on this particular patent.

The Supreme Court

As my knowledge grows in this course, I have learned how the systems work in almost every facet of our daily lives. However, tonight we watched a film that focused on the Supreme Court and most importantly, the election of the first woman in the Supreme Court. I gathered that the basic structure of it all of the eight people are put together by the President of the United States, one being the Chief Justice of the United States and such number of Associate Justices as may be fixed by Congress. As it is chosen by the President, the President does receive advice and consent of the Senate. It is stated in the Constitution that the Judge, “both of the supreme and inferior Courts, shall hold their Offices during good behavior, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.” (Article 3 Section 1) When I read and understood the duties that are to be carried out by the people of the Supreme Court, I often found myself questioning whether I could even begin to carry out some of the decisions made by those who hold that particular position. I would often be judged on my opinions and beliefs just like Ruth Loomis in the film except times were different during that period and women were viewed as a sensitive matter when it came down to most things. But I would not be surprised if there were people out there that still had that frame of mind pertaining to women in that position of power but it would open a certain amount of trust to the people if you had that sort of diversity in the Supreme Court because they make many important decisions that could make or break the society we all live in.

Issues of the Case

In the case of EBay Incorporated versus MercExchange, we are informed that MercExchange sought to license its business method patent to EBay Incorporated, but no agreement was reached. MercExchange then sought a patent infringement suit and a jury found that its patent was valid, that EBay Inc. had infringed the patent, and that damages were appropriate. However, the District Court denied Mercexchange’s motion for permanent injunctive relief. In reversing, the Federal Circuit applied its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.” 401 F. 3d 1323, 1339. Mercexchange then proceeded to push the infringement suit and when that happens they must go through a series of tests to prove whether they truly can dispute under the Patent Act. This requires Mercexchange to demonstrate that “it has suffered an irreparable injury, that remedies available at law are inadequate to compensate for that injury, that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted, and that the public interest would not be disserved by a permanent injunction.” These principles apply with equal force to Patent Act disputes. “[A] major departure from the long tradition of equity practice should not be lightly implied.” Weinberger v. Romero-Barcelo, 456 U. S. 305, 320. These tests are then evaluated by the Supreme Court. EBay Inc. and Half.com, Inc., argue that this traditional test applies to disputes arising under the Patent Act. Petitioner Half.com, now a wholly owned subsidiary of EBay, operates a similar Web site. MercExchange holds a number of patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. MercExchange sought to license its patent to eBay and Half.com, as it had previously done with other companies, but the parties failed to reach an agreement. MercExchange subsequently filed a patent infringement suit against eBay and Half.com in the United States District Court for the Eastern District of Virginia. As this Court has long recognized, “a major departure from the long tradition of equity practice should not be lightly implied.” Nothing in the Patent Act indicates that Congress intended such a departure. ThePatent Act expressly provides that injunctions “may” issue “in accordance with the principles of equity.” To be sure, the Patent Act also declares that “patents shall have the attributes of personal property,” §261, including “the right to exclude others from making, using, offering for sale, or selling the invention,” §154(a)(1). According to the Court of Appeals, this statutory right to exclude alone justifies its general rule in favor of permanent injunctive relief. But the creation of a right is distinct from the provision of remedies for violations of that right. Indeed, the Patent Act itself indicates that patents shall have the attributes of personal property.

Fact of the Case

Facts of the case

EBAY INC. v. MERCEXCHANGE, L. L. C.

Argued March 29, 2006—Decided May 15, 2006

Petitioners operate popular Internet Web sites that allow private sellers to list goods they wish to sell. Respondent sought to license its business method patent to petitioners, but no agreement was reached. In respondent’s subsequent patent infringement suit, a jury found that its patent was valid, that petitioners had infringed the patent, and that damages were appropriate. However, the District Court denied respondent’s motion for permanent injunctive relief. In reversing, the Federal Circuit applied its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.

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 reliefs an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. These principles apply with equal force to Patent Act disputes. “[A] major departure from the long tradition of equity practice should not be lightly implied.” (Weinberger v. Romero-Barceló, 456 U. S. 305, 320. Nothing in the Act indicates such a departure. Pp. 2–6. 401 F. 3d 1323, vacated and remanded.)

It was then taken to the Supreme Court where they evaluated the tests taken and gave their conclusion on whether the patent infringement will stand in court.

Illicit

Illicit

I think that we as a whole are sorely affected by copyright infringement and it is so common and overlooked because what we see is a good deal on a certain product, was obtained in a most uncommon way. It comes back to the manufacturer because it cuts into their profit and the people involved are just scooping money out of them like there is nothing wrong with it. It is supply and demand with a twist and America is buying in on it. When watching the documentary, I saw people in Hong Kong selling these knock off products like you see the sales person in a mall kiosk sell their lotions and steamers. Sure, it is all at a good price but what you do not see is the lengths those people go through just to hustle their consumer. They say they do it to survive and I understand that times are hard but it comes to a dangerous point when it comes to how these knock offs are acquired. The making and distribution of pharmaceuticals was a topic that really scared me because they could not afford to buy the ingredients made for those drugs so they just grabbed whatever they could find and made the pills in their basements. Some of these ingredients were poisons and people were buying them because they were considered a good deal. Pesticides, glue, and paint were being ingested by people who thought they were using medicines. When you watch this documentary, you see under a fine microscope what this world of black market trading is capable of. You see how everyday people participate in such trades from the consumers to the producers and in the end, somebody always paid. It makes you wonder if the price you pay is really what you bargained for.