IP Case Law Update: Patents and Copyright

I said in yesterday's IP Case Law Update that not a lot had happened on this side of the Atlantic in the first week of term. However, quite a lot has been happening in the rest of the world. In the USA, for insgtance, an application by eBAY Inc to the US federal supreme court (petition for certiorari) to review part of the judgment of the Court of Appeals of the Federal Circuit in MercExchange LLC v eBAY Inc and another 401 F.3d 1323 (2005) has been supported by written submissions from 35 eminent law teachers including Professor Lawrence Lessig of Stanford. In Australia, the High Court (the federal supreme court) reversed the decision of the full court in Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 and reinstated the judgment of the court below. Both cases could have an indirect effect on the development of the law in England.

The issue upon that has excited the American academics in eBAY is whether a patentee whose patent has been challenged and found to be valid and infringed should have a permanent injunction as of right. The trial judge had refused to grant the claimant a permanent injunction and this part of his judgment was reversed by the Court of Appeals. The appeal judges considered a number of arguments as to why the decision of the court below should not be interfered with. These included general uneasiness over business method patents that had prompted a second level review, the likelihood of contempt proceedings over ebery attempt by the defendants to design round the patent, the willingness of the claimant to license its patents and the fact that it had not applied for interim injunctive relief. These were, in the view of the Circuit Court, nothing to the purpose:

"Because the “right to exclude recognized in a patent is but the essence of the concept of property,” the general rule is that a permanent injunction will issue once infringement and validity have been adjudged. Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1246-47 (Fed. Cir. 1989). To be sure, “courts have in rare instances exercised their discretion to deny injunctive relief in order to protect the public interest.” Rite-Hite Corp. v. Kelley, Inc., 56 F.3d 1538, 1547 (Fed. Cir. 1995); see Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858, 865-66 (Fed. Cir. 1984) (“standards of the public interest, not the requirements of private litigation, measure the propriety and need for injunctive relief”). Thus, we have stated that a court may decline to enter an injunction when “a patentee’s failure to practice the patented invention frustrates an important
public need for the invention,” such as the need to use an invention to protect public health. Rite-Hite Corp., 56 F.3d at 1547."
In this case, the Court of Appeals were of opinion that "the district court did not provide any persuasive reason to believe this case is sufficiently exceptional to justify the denial of a permanent injunction." As the trial judge had not exercised his discretion the Court of Appeals was entitled to intervene.

The opening shots in the academics' submission is combative: "The Federal Circuit has abandoned the role of equity, in defiance of the statutory language". The language which is supposed to be defined in this case is the permissive "may", an argument that we have had in England in other contexts before now. There is a lot of useful and informed discussion on Dennis Crouch's site Patently-O to which it would be otiose to add anything. This includes not only Dennis's own commentary but the links to the judgment below and to the written submissions of the parties as well as that of the academics (see "Case Questioning Patent Injunction Standards Moves Towards Supreme Court" 6 Oct 2005).

It would be equally otiose to add to the commentary of some of our own academics on the Sony case (see Sony round 3 in Australia in IP Edinburgh (6 Oct 2005) by the IP, technology and human rights project of the AHRC research centre in Edinburgh and "Sony loses Chipping Case" by Jeremy Phillips in IPKat of yesterday). The relevance of this case for us is that the Australian Copyright Amendment (Digital Agenda) Act 2000 (the construction of which was the issue in this case) was intended to implement the WIPO Copyright Treaty. So, too, of course was Directive 2001/29/EC which were carried into effect in the UK by The Copyright and Related Rights Regulations 2003. As Jeremy noted, a similar issue has come before our courts in KK Sony Computer Entertainment Inc (t/a Sony Computer Entertainment Inc) v Ball and others [2004] EWHC 1738 (Ch) (19 July 2004) and been decided differently. An interesting essay question for Jeremy to set to his students might be whether our legislature has done more than it was bound by the WIPO treaty to do.


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