Tuesday, December 21, 2010

Federal Circuit Holds that eBay Doesn't Apply to ITC Injunctions

Today the Federal Circuit decided Spansion v. U.S.I.T.C.

You have to read to the very end of this long opinion, but in the case, the Federal Circuit ruled that eBay doesn't apply to ITC injunctions.  Specifically, while there is still a "public welfare" component to an ITC injunction, the "irreparable harm" element seems to be absent.

UPDATE: (a brief explanation of what this means for people who don't know just by reading it):
A patent owner who wants to enforce its patent can file a lawsuit in Federal District Court.  If the patent owner wins the case, it might or might not get an injunction forcing the losing infringer to stop its infringing activities, based on the case of eBay v. MercExchange. Under that case, to get an injunction 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.  What this means in practice is that if the patent owner has a competing product -- it is in the market -- it usually can get an injunction.  If the patent owner does not practice its patent, it usually can't get an injunction, and only gets money damages (royalties).

Alternatively, some patent owners can file a proceeding in the U.S. International Trade Commission (ITC).  There are a number of differences between an ITC proceeding and a district court proceeding; some of them are discussed here and here.  For the purposes of today's case, the Federal Circuit ruled that eBay's four part test, above, doesn't apply to ITC injunctions -- specifically, the patent owner doesn't have to prove irreparable harm to get an ITC injunction.  This has been an open question after the eBay decision.

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