1 November 2015

eBay, Inc. v. MercExchange

In today’s society, we use patent laws as way to exclude others from utilizing or benefiting from an invention for a period of time. The patent act protects an inventor that creates any new and useful process, machine, and/or manufacturer which also contains a description of the invention. However, once the patent has expired, it will give the right to others to create, use, and sell the same invention. The use of patent laws was disputed in the case of eBay v. MercExchange. This case displays how we have moved from the federal circuits’ general rule in patent disputes, to the traditional case by case analysis of the four-factor test. In the case, “the U.S Supreme made an important unanimous ruling that the traditional four factor test applied in courts of equity when determining whether to issues injunctive relief also applies in patent cases.” (Mota)

The Traditional Four-Factor tests consists of:

·         Factor 1: The Purpose and Character of the Use

·         Factor 2: The Nature of the Copyrighted Work

·         Factor 3: The Amount of Substantiality of the Portion Used

·         Factor 4: The effect of the Use on the Potential Market for or Value of the Work

 

Patent injunctive relief is based on these four factors where the plaintiff must demonstrate they have been affected by the alleged infringers. In this case, MercExchange has to prove how their patent was violated by eBay to sell and negotiate their goods. According to the District Court, they stated that there was no a irreparable harm caused to the plaintiff, therefore, a permanent injunction would not be issued. In addition, the district court found that monetary damages were an adequate remedy. “The four-part test requires the plaintiff to prove that it has suffered an irreparable injury; that the law does not provide other adequate ways to compensate it; that considering the balance of hardships between the plaintiff and defendant, an injunction is warranted; and that the public interest would not be harmed by a permanent injunction.” (Tech)

Although the district court found that a monetary compensation was an adequate remedy for the plaintiff, a permanent injunction was not granted because it would harm public interest. They believed that a patent holder that did not practice the patent law should not be granted a permanent injunction. The defendant appealed and according to the Court Appeal “stated that a general concern over business method patents is not a sufficient public purpose to deny injunctive relief… Applying the general rule, the denial of permanent injunction was reversed.”

 

 

 

 

 

 

Works Cited

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Crews, Dr. Kenneth D. Fair Use. 7 November 2015 <https://copyright.columbia.edu/basics/fair-use.html>.

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LastName, First, Middle. "Article Title." Journal Title (Year): Pages From - To.

Mota, Sue Ann. eBay v. MercExchange: Traditional Four-Factor Test for Injunction Relief Applies to Patent Cases, According to the Supreme Court. 23 April 2007. 1 November 2015 <https://www.uakron.edu/dotAsset/728020.pdf>.

Tech, Oyez. Chicago-Kent College of Law at Illinois. eBay Inc. v. MercExchange, L.L.C. 29 March 2006. 2 November 2015 <https://www.oyez.org/cases/2005/05-130>.