Supreme Court Weighs eBay Patent Case

U.S. Supreme Court justices Wednesday peppered a lawyer for eBay with questions about why they should protect the company against a patent injunction requested by a small inventor. The justices questioned why small inventors should have less chance of an injunction than wealthy companies that release products based on their inventions.

Oral arguments in the eBay v. MercExchange case lasted an hour, during which Chief Justice John Roberts asked eBay lawyer Carter Phillips why the lower courts should have discounted MercExchange patents when considering an injunction against eBay.

The court is looking at whether near-automatic injunctions should be granted in cases when a company is found to be infringing a patent. Much of the tech industry is siding with eBay, which was found guilty in May 2003 of infringing a “buy it now” patent held by MercExchange, a small auction site. An appeals court later ruled that an injunction against eBay using the “buy it now” feature was appropriate.

The U.S. District Court for the Eastern District of Virginia declined to issue an injunction after a US$35 million jury award, but the U.S. Court of Appeals for the Federal Circuit reversed that decision, saying an injunction was warranted.

At the Supreme Court Wednesday, Phillips argued that the district court correctly rejected an injunction even though U.S. courts have traditionally issued injunctions in nearly all patent cases. Phillips said the district court in 2003 weighed several factors when it rejected the injunction, including the fact that MercExchange hadn’t used its patent for buy-it-now features in online auctions.

But Roberts seemed to disagree, saying, “Is that an appropriate consideration to take into account? Isn’t that just saying that the [invention] is going on in a garage?”

The justices, however, did not spare MercExchange lawyer Seth Waxman, suggesting that district courts should weigh several factors when deciding whether to issue injunctions. Justice Roberts noted that the district court questioned the practice of issuing software patents involving business methods, suggesting at one point that he himself could have thought up the methodology involved in the MercExchange patents.

-Grant Gross, IDG News Service

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.