The U.S. Supreme Court ruled on Monday in eBay, Inc. v. MercExchange, L.L.C. that the availability of a plaintiff’s injunction against a patent infringer is determined by the same four-part test applicable to injunctions generally. The Court therefore reversed the Court of Appeals for the Federal Circuit, which had adopted a patent-specific rule that injunctions are presumed available “absent exceptional circumstances.”
The Supreme Court ruling should drastically diminish the leverage recently enjoyed by patent claimants to force settlements for infringement claims over product or process components, based on the larger business value of the threatened sales interruption for the assembled product or system in which they are used. If the test for an injunction cannot be met by the claimant, then even a proven infringement would result in exposure to damages for the infringing use, but not an abrupt court-ordered suspension of sales.
The Court’s opinion by Justice Thomas recites the familiar four-part test for an injunction, involving 1) irreparable injury; 2) inadequacy of legal remedies such as monetary damages; 3) a balancing of hardships favoring injunction; and 4) the public interest not being disserved by injunction. 2 concurring opinions from other justices note that a) there often are patent-specific factors which justify injunctions even under the four-part test; but b) modern patent trolls, and dubious business-process patents, may not deserve the benefit of the doubt in obtaining injunctions.