eBay case going to the Supreme Court

eBay has gotten its wish in a patent dispute with MercExchange of Great Falls, VA. The online auction powerhouse's call for a hearing in front of the nine justices of the Supreme Court has been accepted (according to an article in the New York times).

The case, as you may remember, resulted in a finding in 2003 that eBay had infringed on the patents over the "Buy it now" auction mechanism that was added by the company. The key dispute before the Supreme Court, though, is whether the judge who granted the verdict was required to issue an injunction against the use of the technology or not. The plaintiffs have argued (successfully in front of the US Court of Appeals for the Federal Court) that patent law requires an injunction whenever an infringing use is found. The judge in the original case, however, felt that it wasn't warranted as the company wasn't actively marketing or developing their technology.

At stake is the question of how large of a club the owners of patents have to wield over infringers. If the Court holds against eBay, it means that even one infringed patent could stop the sale of a product until the infringement case is resolved.

The requirement that all patent disputes be resolved through an injunction means that other court remedies, such as prescribing a royalty instead of allowing for negotiation, etc. is outside of the purview of the court system.

Considering the purpose of the patent system in the first place ("To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries", Article I, section 8, clause 8 of the US Constitution), it is both clear that the Framers expected limited monopolies to be granted for inventions and that such monopolies would serve to promote progress. In this case, those two issues may be at odds with each other.

Of course, the issue of how patents should be licensed and how long they should be valid is of great interest both to the companies involved and the public as a whole, as we can see the large number of patent lawsuits that have erupted from the recent spate of software patents. Some of these issues were described in a 1994 letter to the US PTO by the LPF (an organization founded to oppose UI copyrights and software patents).