Monday, May 15, 2006

Supreme Court Demolishes Automatic Patent Injunctions

Big news today: the Supreme Court, in a unanimous decision, has removed the “general rule” that a permanent injunction should be issued once infringement of a valid patent is established. It reversed a lower court's decision that allowed MercExchange to receive an injunction against eBay.

What this means: patent trolls will find it increasingly difficult to swing the axe of injunction over the heads of researchers, academics, innovative startups, and industry titans. Trial courts have complete discretion over whether an injunction is an appropriate remedy for a patent holder. Had this decision arrived earlier, companies like RIM may have never had to pay out more than $600 million to patent extortionists or suffer years of irreprable market-place harm and multi-million dollar losses of stock market valuation as the spector of such injunctions hung over their businesses.

What this doesn't change: this likely won't affect legitimate competitors with valid patents from achieving injunctions. Only patent holding firms (aka, trolls) will have difficulty in proving that irreperable harm is done by allowing the 'infringer' to continue practicing claims of the patent, and that a monetary remedy is insufficient.

This is a big deal, as it increases your right to create. It diminishes the paper inventor's monopoly over basic ideas, and gives you more freedom to invent and market your innovations without the fear that unscrupulous individuals will be able to thwart it all by gaming the legal system.

This subtle change doesn't destroy the shackles of our broken patent system, but it certainly loosens the bonds that tie innovation down. And perhaps most importantly, it demonstrates that the Supreme Court understands how oppressive the current legal system has become with respect to patent litigation. This decision is, perhaps, a portent of how the Court might feel about several other important patent issues it is schedulued to hear.

Dennis Crouch has more in-depth analysis.

Additional Commentary: Injunctions, Monopolies, and Free Markets


Anonymous Anonymous said...

One of my buddy's recently got into some trouble at a bar and the short story is he was arrested on assault charges which are ridiculous we were there and watched as a random guy came up to him punched him in the face and began repeatedly beating him. He stood up to defend himself and in the crossfire the wasted dude fell and banged his head on the kerb. The cops show up and don't want to hear us and arrest him.
It all got cleared up in the end but had that have gone to court and my friend had to have paid court bonds could he have claimed them back or even sued the police force for wrongful arrest? Also where would be the best place for getting bonded?

6:35 AM  

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