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ARTICLE · 07 AUGUST 2006

Are Injunctions for Patent Infringement Automatic?

Freehills
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The Supreme Court of the United States gave its decision on 15 May 2006 in the controversial patent case between eBay and MercExchange. eBay argued that despite a finding that it had infringed MercExchange’s patent, no injunction should be awarded.

AustraliaIntellectual Property
Craig Smith
Craig Smith

The Supreme Court of the United States gave its decision on 15 May 2006 in the controversial patent case between eBay and MercExchange. eBay argued that despite a finding that it had infringed MercExchange’s patent, no injunction should be awarded. The Supreme Court said that injunctions were not an automatic remedy, and courts must apply equitable principles in every case in deciding whether to award an injunction.

The Controversy

MercExchange owned a business method patent for an electronic market for the sale of goods between individuals, involving the use of a centralised authority. The patent was filed in 1995, a few months before eBay started its business. eBay was found to infringe the patent by the lower court and the jury awarded damages for past infringement of $25 million, but the District Court declined to award an injunction.

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