In a unanimous decision today, the Supreme Court overturned the assumption that injunctions issue nearly automatically in patent cases. (An injunction in a patent case is a court order stopping the infringer from continuing to practice the patent). Rather, the court held, injunctions in patent cases should be decided under the same four-factor test that has long governed injunctions in other areas of law. The case involved a high-profile patent suit against online auction giant eBay. The Court’s opinions are here. Dennis Crouch provided his usual excellent summaries and links to the many briefs at his blog Patently-O.
I say unanimous, but it is worth pointing out that seven of the nine justices signed one of two very short concurrences. One of the concurrences, by Chief Justice Roberts (joined by Justices Scalia and Ginsburg), emphasizes that, while the decision frees lower courts to apply the traditional test, that test would be expected to produce injunctions in most cases, as it has done historically. The other concurrence, by Justice Kennedy (joined by Justices Stevens, Souter, and Breyer), invokes several of the major controversies raging in patent law policy, including patent trolls and business method patents. He suggests that the flexibility of equitable discretion will allow judges to respond to cases that raise those issues — presumably by denying injunctions — better than would the near-automatic injunction imposed under the now-overturned appeals court decision.
What’s the upshot? Hard to say. District courts now have discretion, guided by the traditional test, to issue injunctions or not as they see fit. But the concurrences seek to nudge that discretion in two opposite directions. We can expect a flurry of new cases coming out all over the map, which should converge eventually around some new principles. This may happen more rapidly in patent law than in other areas, since all patent appeals go to the Court of Appeals for the Federal Circuit rather than being distributed to the 11 regional circuits. Perhaps that’s a good thing, although if the Federal Circuit seeks to impose new rules too quickly the issues may not percolate long enough to assist that court in formulating an appropriate test.
So, this is yet another of those unanimous Supreme Court decisions in intellectual property law that leaves practitioners scratching their heads (like the Grokster filesharing case, the Moseley trademark dilution case, and the Two Pesos trade dress case). For the time being, despite the unanimous result, there will be less certainty in this area of law, not more.
Filed under: Patents