Replies to post #156359 on InterDigital Inc (IDCC)

[quartzman0]

texb,

I believe that you are misinerpreting the court's statements. Injunctive relief would not be necessary if the patent holder is not commercially developing their because they are not suffering financial loss through loss of customers, market share etc. The loss of royalties can be recovered through infringement proceedings after the fact - at least theoretically. As I understand it, the counts did not restrict the patent holders rights to sue for compensation.


Also not an attorney and JMHO,

Q

[olddog967]

texb: The Supreme Court did not agree with the District Court that "that a patent holder's "lack of commercial activity in practicing the patents" creates a presumptive basis for denial of injunctive relief against would-be infringers." In fact it was the opposite. The District Court's consideration of this as an additional factor in not granting an injunction, over the four traditional factors was the reason the Supreme Court reversed the District Court's ruling. Here are portions of the decision where that is discussed, plus a concurring opinion from Justice Kennedy where the so called "patent trolls" are commented on.

Held: The traditional four-factor test applied by courts of equity when
considering whether to award permanent injunctive relief to a pre-
vailing plaintiff applies to disputes arising under the Patent Act.
That test requires a plaintiff to demonstrate: (1) that it has suffered
an irreparable injury; (2) that remedies available at law are inade-
quate 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. The decision to grant or deny such relief
is an act of equitable discretion by the district court, reviewable on
appeal for abuse of discretion. These principles apply with equal
force to Patent Act disputes. “[A] major departure from the long tra-
dition of equity practice should not be lightly implied.” Weinberger v.
Romero-Barcelo, 456 U. S. 305, 320. Nothing in the Act indicates
such a departure. Pp. 2–6.

snip

Neither the District Court nor the Court of Appeals
below fairly applied these traditional equitable principles
in deciding respondent’s motion for a permanent injunc-
tion. Although the District Court recited the traditional
four-factor test, 275 F. Supp. 2d, at 711, it appeared to
adopt certain expansive principles suggesting that injunc-
tive relief could not issue in a broad swath of cases. Most
notably, it concluded that a “plaintiff’s willingness to
license its patents” and “its lack of commercial activity in
practicing the patents” would be sufficient to establish
that the patent holder would not suffer irreparable harm if
an injunction did not issue. Id., at 712. But traditional
equitable principles do not permit such broad classifica-
tions. For example, some patent holders, such as univer-
sity researchers or self-made inventors, might reasonably
prefer to license their patents, rather than undertake
efforts to secure the financing necessary to bring their
works to market themselves. Such patent holders may be
able to satisfy the traditional four-factor test, and we see
no basis for categorically denying them the opportunity to
do so. To the extent that the District Court adopted such
a categorical rule, then, its analysis cannot be squared
with the principles of equity adopted by Congress. The
court’s categorical rule is also in tension with Continental
Paper Bag Co. v. Eastern Paper Bag Co., 210 U. S. 405, 422–
430 (1908), which rejected the contention that a court of
equity has no jurisdiction to grant injunctive relief to a
patent holder who has unreasonably declined to use the
patent.

snip


KENNEDY, J., concurring
In cases now arising trial courts should bear in mind
that in many instances the nature of the patent being
enforced and the economic function of the patent holder
present considerations quite unlike earlier cases. An
industry has developed in which firms use patents not as a
basis for producing and selling goods but, instead, primarily
for obtaining licensing fees. See FTC, To Promote Innova-
tion: The Proper Balance of Competition and Patent Law
and Policy, ch. 3, pp. 38–39 (Oct. 2003), available at
http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited
May 11, 2006, and available in Clerk of Court’s case file).
For these firms, an injunction, and the potentially serious
sanctions arising from its violation, can be employed as a
bargaining tool to charge exorbitant fees to companies that
seek to buy licenses to practice the patent. See ibid.
When the patented invention is but a small component of
the product the companies seek to produce and the threat
of an injunction is employed simply for undue leverage in
negotiations, legal damages may well be sufficient to
compensate for the infringement and an injunction may
not serve the public interest. In addition injunctive relief
may have different consequences for the burgeoning num-
ber of patents over business methods, which were not of
much economic and legal significance in earlier times.
The potential vagueness and suspect validity of some of
these patents may affect the calculus under the four-factor
test.
The equitable discretion over injunctions, granted by the
Patent Act, is well suited to allow courts to adapt to the
rapid technological and legal developments in the patent
system. For these reasons it should be recognized that
district courts must determine whether past practice fits
the circumstances of the cases before them. With these
observations, I join the opinion of the Court.


http://www.supremecourtus.gov/opinions/05pdf/05-130.pdf

[Corp_Buyer]

Texb- you have it backwards. As I understand the decision, the lower court erred on BOTH fronts:

1- non-manuf. not entitled to injunctive relief - Actually the Supreme Court reinforced the rights of non-manufacturers to obtain an injunction.

2- the lower court failed to apply the proper standard tests in granting the injunction, and this the reason the Supreme Court reversed the injunction and sent it back to the lower court for reassessment.

Ultimately, this was a victory for IPR houses like IDCC, and most likely a time delay for eBay. The lower court got it all wrong in every way. Fortunately, the Supreme Court has upheld the property rights of patent holders to exclude usage.

MO,
Corp_Buyer