Here from Matt Buchanan's "Promote the Progress" is his take on Ebay v. MercExchange (Follow the link to read more):

Last week, the Supreme Court granted certiorari in eBay v. MercExchange, a case directed squarely at the standard for granting injunctive relief in patent infringement suits. That legal standard, which currently results in the nearly automatic granting of an injunction once a patent is determined to be both valid and infringed, was the most controversial issue during the drafting of the Patent Act of 2005 earlier this year. Now, with the granting of certiorari, the injunctive relief issue stands to dramatically alter the future of the patent reform movement in the United States.

The petitioner, eBay, seeks to change the standard in a manner that requires a court to consider various factors when determining whether a request for injunctive relief should be granted, including the extent to which the patentee makes use of the invention. This is exactly the same argument advanced by the Business Software Alliance during congressional patent reform hearings held earlier this year.

My take: On one side of this issue we have biotech/pharma, which likes injunctions, and on the other side, software/tech, which doesn't. Routinely awarding damages instead of an injunction would it seems to me kill off licensing at market rates in fairly short order. But the problem that software/tech faces is certainly a serious one, and needs *some* solution. Recommendation: First, try other measures to discourage overenthusiastic plaintiffs (loser pays!); See if improvements in prior art searching and quality at the patent office (easier said than done, I know) can reduce the patent baggage being carried around by software/tech.

But chances are *neither* of these measures would be enough. The fact of the matter is that when we live in a world where tech and ideas are all the more important, patents *are* likely to proliferate.

Another problem: Not addressing the problem of thickets in the software/tech universe *in theory* gives companies like Ebay an incentive to help the patent office figure out how to make a good prior art library and otherwise streamline licensing on the software/tech side. But actually since this is a tremendously difficult problem it is much easier for software/tech to argue for damages instead of injunctions, a form of compulsory licensing.

Time and time again in the past hundred-odd years difficulties in licensing on a massive scale have lead policy in the direction of the compulsory license. It is not a good idea. Prices should be set by a market that truly reflect demand, scarcity, and relative value. The process of price setting in an administrative tribunal is a pathetically bad proxy.

But there *does* need to be a solution consistent with a technology neutral patent system.

posted by Solveig Singleton @ 7:40 AM | Patents, Pharma, Prices, Terms, and Licensing, Software

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