The top court in the United States has decided to review the increasingly contentious issue of when injunctions should be handed out in patent infringement cases.
But the U.S. Supreme Court will not focus its review on the biggest patent fight of the day, the battle between Research In Motion Ltd. and NTP Inc. Instead, it has agreed to hear an appeal from eBay Inc., the world's largest Internet auctioneer, which was found to have infringed on the claims of a small patent holding firm in a case that has similarities with RIM's.
Legal experts say the Supreme Court is unlikely to hear two patent infringement cases at the same time, leaving it unlikely now that the top court will accept RIM's petition for a hearing. The Supreme Court receives more than 7,000 requests for appeal each session and chooses to hear only about 100 of them.
Nevertheless, a decision in eBay's favour could help RIM fend off NTP, if it came soon enough. A victory for eBay could “have broad ramifications for every industry,” said Stephen Maebius, a patent lawyer in Washington.
The Supreme Court justices will review a decision made this year by the Federal U.S. Circuit Court of Appeals that said the trial judge should have issued an injunction against eBay.
Lawyers have looked at that decision as paving the way for a greater number of injunctions in patent infringement cases.
In agreeing to hear the case, the top court will consider whether to overturn a 1908 Supreme Court ruling that said patent owners have far-reaching rights, including injunctions, to prevent others from using their inventions. The Internet auctioneer is arguing that any injunction against it should be up to the discretion of the trial judge.
In May, 2003, a jury in federal court in Norfolk, Va., found eBay to have willfully violated two patents held by MercExchange LLC and awarded the Great Falls, Va.-based firm $35-million (U.S.).
Two years later, the Federal U.S. Circuit Court of Appeals agreed that eBay had infringed on one patent relating to e-commerce. It cleared the company of infringing a second patent and sent the dispute over a third patent back to the district court. The ruling opened the way for MercExchange to seek an injunction against eBay.
MercExchange, similar to NTP, is a small patent holding firm that never used its patents to develop a commercial product or service.
“If a patent owner isn't practising the invention himself, it's always sounded somewhat unreasonable to say they are irreparably harmed” without an injunction, Mr. Maebius said. “Why isn't money enough?”
The auctioneer says that at this point, any injunction issued will not effect its business because the company has made changes to the e-commerce methods in question.
The threat of an injunction is much more troublesome for RIM, however, which would be prevented from selling its BlackBerry services and products to all U.S. customers, with the likely exception of U.S. federal government accounts. About 70 per cent of the Waterloo, Ont., company's business is done in the U.S.
RIM says it recently completed a workaround that would use different software independent of NTP's patents, but it hasn't released further details of the new technology.
Both RIM and eBay convinced the U.S. Patent and Trademark Office to review the patents in their respective cases. Both companies also have won initial victories there, with the PTO rejecting the contested claims at the heart of each legal battle.
