Alerts

Supreme Court Eliminates Automatic Injunction in Patent Infringement Cases

May 15, 2006

In a unanimous decision issued today in the closely watched litigation between eBay and MercExchange (See "Supreme Court to Decide on Permanent Injunctions Against Patent Infringers", SRZ Client Alert, November 29, 2005), the Supreme Court has effectively overturned over 100 years of precedent and
concluded that permanent injunctions cannot be automatically granted following a trial court's finding of patent infringement. Instead, the trial courts are required to consider whether the plaintiff-patentee has satisfied the traditional "four factor test [for injunction] before a court may grant such relief … (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, 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." From its inception, the Court of Appeals for the Federal Circuit, which has exclusive jurisdiction of all patent based appeals, had required that permanent injunctions be granted following trial in virtually all cases and that equitable factors such as the sufficiency of monetary relief could not be considered. This rule stemmed from the Federal Circuit's view that the right to exclude is essential to the right granted by a patent.