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.