A little-known Supreme Court decision allows corporations to infringe on the intellectual property rights of their competitors, and largely get away with it. Allowing this precedent to go on will discourage American innovators and, by extension, harm our economy and our competitive position in the world.
We are two former federal judges appointed by presidents from different parties, but we agree that eBay Inc. is the best candidate for the Court. It’s time to review your 2006 decision in the 2006 Versus. MercExchange, LLC Since this has not happened, Congress must step in and protect America’s inventors from patent predators.
The issue involves (so-called) “injunctions”, the legal term used when judges order someone to stop their illegal actions.
Injunctions are legally binding and force patent hunters to stop manufacturing goods that incorporate stolen intellectual property. Essentially, they restore patent holders’ ability to manufacture and sell products that incorporate their patented technology, without unfair competition from copycats.
This brings us to the case of eBay. Nearly 17 years ago, the Supreme Court decided that injunctive relief would not be the legal system’s default response to proven patent theft. Instead, courts refuse to award anything other than monetary damages to the patent owner, without forcing the infringer to stop infringing the patent owner’s rights.
But as many inventors will attest, no payoff can come close to missing the opportunity to see your own invention from abstract idea to product on supermarket shelves or in doctor’s offices. In a certain sense, economic compensation cannot compensate for the irreparable harm that occurs when an inventor loses his “exclusive right to his respective writings and inventions”, as established by the Constitution itself.
eBay’s decision made patent theft more attractive than ever. Sometimes it is cheaper for one large company to steal the intellectual property of another, build a competing business using that intellectual property, and pay damages awarded by the courts long after the fact, rather than in good faith. to enter into the license agreement of. Such “efficient” infringement would not be possible in a world where injunction is the standard remedy for patent theft.
And even in cases where a patent has quantifiable value, damages awarded by courts rarely reflect this. The reason is simple: Big infringers can easily drag out infringement lawsuits for as long as possible and make those lawsuits as costly as possible. The strategy makes it more likely that cash-strapped innovators will cry and settle, even if it means accepting a monetary loss far less than the actual value of their intellectual property.
Lawmakers recently took the first step toward invalidating eBay by codifying the presumption of irreparable harm, a key requirement for court orders for trademark infringement cases. Sen. Chris Coons (D-Del.) recently indicated he may soon introduce a bill that would do the same for patent theft.
It is time for Congress to clarify that injunctions, not monetary damages, are generally the most appropriate response in proven patent infringement cases.
Paul Mitchell served on the United States Court of Appeals for the Federal Circuit from 1988 until his retirement in 2010, and as Chief Justice from 2004 to 2010. Kathleen O’Malley served on the United States Court of Appeals for the Federal Circuit from 2010 to 2022 and the United States District Court for the Northern District of Ohio from 1994 to 2010. Both currently serve as board members of the Council for the Promotion of Innovation.