The Supreme Court’s decision yesterday in eBay v. Mercexchange may be of interest to competition lawyers, even though it is nominally only about patent law.  For those who missed it, the Court unanimously held that in deciding whether to issue a permanent injunction after finding patent infringement, a district court must consider the traditional four-part injunction standard (irreparable harm, adequate remedy at law, balance of interests, public interest).  The Court rejected both the approach of the district court (which seemed skeptical that injunctive relief should often be appropriate) and the Federal Circuit (which viewed injunctive relief as a presumptive entitlement).

For what seemed to be a straight-forward formal legal issue on which everyone agreed, the case drew concurring opinions by Roberts, Scalia, and Ginsburg in one opinion and Kennedy, Stevens, Souter, and Breyer in another.  For once, Thomas stood as the centrist view on the Court, announcing the legal standard to be applied in future cases and not taking sides between the Roberts and Kennedy concurrences.  What separates the Roberts branch from the Kennedy branch is whether patent cases should draw on general equitable precedents or instead keep a careful eye on the peculiarities of patent cases.  The Kennedy branch is concerned about the deleterious influence of patent trolls that have no interest in ever marketing the patented technology themselves but are just using the injunction threat as leverage to increase licensing fees.  The Roberts branch seems to be more concerned about increasing the role of courts as royalty-rate-setting bodies for patents, and therefore seems to favor a more frequent use of injunctions to force negotiations out of the courtroom. 

Overall, the case seems to be more of a “duck” than a serious resolution of the difficult and important issues raised by patent infringement cases.

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