Justices Seem Divided Over eBay Patent Injunction Case

Two veterans of the Supreme Court bar argued forcefully -- and inconclusively -- Wednesday in a high-stakes dispute over how easy it should be for a patent holder to win an injunction against an infringer.

From the tenor of the questioning in eBay v. MercExchange, justices seemed closely divided over the issue, alternately sympathetic toward Sidley Austin's Carter Phillips, arguing his 49th case at the Court, and then toward his adversary, WilmerHale's Seth Waxman, appearing before the high court for the 47th time.

The case has drawn wide interest, with businesses lining up on both sides. Some companies, including Intel, are siding with eBay, expressing concern that the holder of a single patent that covers one of thousands of processes inside a product could bring down that product too easily by obtaining a paralyzing injunction. The recent patent dispute that almost crippled BlackBerry service is cited as a prime example.

Phillips represented eBay, arguing that injunctions should not be granted automatically and that instead, judges should have broad discretion to balance equities and to decide, in some cases, that money damages are a "perfectly adequate" way to penalize infringers. Permanent injunctions, he said, represent a "sword of Damocles" over companies that can be wielded by small patent holders or "trolls" who do not even make direct use of the patent.

Waxman represented MercExchange, a small Virginia firm that sought an injunction against eBay. Both Court precedent and the will of Congress, he said, dictate that "a final judgment of infringement yields an injunction in all but the rarest of cases." He portrayed his client as a hardworking inventor, not a "patent troll" or a "promiscuous licenser" aiming to profit from his patent merely through litigation.

Details here from Tony Mauro of Legal Times via Law.com.