Tuesday, May 16, 2006

AP quotes Merges on Supreme Court eBay decision

"What's happening today, particularly in the electronics industries, is a widespread misuse of the patent system," said Robert Merges, a University of California, Berkeley, law professor who filed a friend-of-the-court brief in the case on behalf of Web portal Yahoo. "People have been looking for tools to deal with it, and I think we just got a big one."

The Supreme Court unanimously ruled district court judges have flexibility in deciding whether to issue orders barring use of a technology after juries find a patent violation [ie, enjoining the practice by infringers of activities which fall within the scope of a valid patent claim after a decision of infringement by a judge or jury]. The ruling threw out a federal appeals court ruling that said injunctions should be automatic unless exceptional circumstances applied.

The AP story began: The U.S. Supreme Court handed a win to patent-reform supporters ...

Although many newspapers did emphasize the victory for "patent reform against patent troll" issue, BusinessWeek said this:

Make no mistake -- eBay was granted a reprieve. But the narrowly tailored and succinct, five-page opinion offered up no big winners, and no big losers, in a patent case that signifies a deep and long-simmering philosophical split in intellectual-property circles. At issue is the role of so-called patent trolls -- a derisive term applied to scrappy entrepreneurs who amass patents with the sole intent of extracting large licensing fees from alleged infringers, sometimes threatening court injunctions to help seal the deal.

Because the high court declined to take a side in the debate, choosing instead to hew to a narrow interpretation of existing statute, "both sides will find something to crow about in this opinion," says Sharon Barner, chair of the intellectual-property department at Foley & Lardner. And the opinion likely will take the wind out of efforts in Congress to reform a system that's granting patents on processes that are already in wide use or techniques so simplistic that avoiding infringement is nearly impossible.


Entities who are adjudicated infringers now have a chance to avoid a permanent injunction, and they are a lot better off. In terms of predictability of outcome, the legal system is a lot worse off. The problem is thrown to the district courts with no clear guidance on what is proper, and what is improper, in conducting balances in the 4-factor test. It will take years to figure out "how much" was won by the infringers and lost by the patentees.


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