Supreme Court on eBay

October 1, 2006

Kenneth Godlewski, Tom Corrado, Eric Sophir

In eBay, Inc. v. MercExchange, LLC, the Supreme Court rendered a highly anticipated decision holding unanimously that the decision to enjoin “is an act of equitable discretion by the district court.” The Court vacated the Federal Circuit’s application of a “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances”(401 F.3d 1323, 1339 (Fed.Cir. 2005)). The Court held that, according to the traditional principles of equity, the patent owner must demonstrate “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”

Supreme Court in Ebay: Permanent Injunctions are not Automatic, But Decided by Traditional Test in Equity