IP Law360 reports that Federal Circuit Chief Judge Randall Rader on Tuesday chastised the US Supreme Court for getting it wrong on when injunctions should issue against patent infringers. He reportedly said their 2006 decision in eBay Inc. and Half.com v. MercExchange, L.L.C. improperly applied the Patent Act on injunctions. I’ve always thought the Supreme Court got it exactly right and want to understand Judge Rader’s reasoning. His remarks have not been published as far as I can tell after searching, so if you know where they are, please tell me.
The criticism is intriguing because it takes courage to criticize the one court in the world that can, and often lately does, reverse your decisions. It’s also intriguing because the report just says the Supreme Court didn’t follow the Patent Act. No details beyond that.
The Act says courts “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” eBay reversed the Federal Circuit’s general rule that an injunction issued automatically upon a finding of patent infringement. The Supreme Court said that patent injunctions are just like any other injunctions issued by a federal court, and there are four factors to consider in each case.
The factors are familiar to lawyers who handle injunctions: (1) is there irreparable injury; (2) are remedies at law [damages] adequate compensation; (3) is the injunction warranted after balancing the hardships between the parties; and (4) will it harm the public interest.
The Supreme Court said that issuing a patent infringement injunction is just another “act of equitable discretion” by a federal judge. That makes sense to me because the Patent Act commands it. Injunctions must be “in accordance with the principles of equity.”
If Judge Rader was accurately quoted, the only words left in the simple injunction provision that might make a difference are “as the court deems reasonable.” Do these words confine or trump the application of principles of equity? Are there other sections of the Patent Act that justify presuming that an injunction should issue once patent infringement is found? Given the high rate of appeals and reversals in patent infringement cases, it would be good to know more.