Sarah Lai Stirland in Tech Daily (subscription required) has a nice summary piece today on MercExchange v. eBay. I was asked to write a paper recently on IP issues on Capitol Hill. When it came to patents, I said some of the most interesting action seems to be happening not on the Hill but at the Supreme Court (like the Metabolite case last week). The oral arguments in this case, which involves MercExchange's claim of a patent on the "Buy it Now" technology used by eBay, will be Wednesday. I possess a dearth of knowledge of the U.S. patent industry but I have spent the last two years as an eager student, and it seems my thoughts are in line with most of the amicus briefs.

I think it would be a mistake for the Supremes to use the case to dilute or diminish the power of injunction. For many independent inventors or small businesses, the threat of injunction is about the only lever they have against an infringer of their patent.

So I'd have the court side with MercExchange here. BUT. I think it would be reasonable for the Supremes to suggest that lower courts can have some discretion on imposing an injunction, because there are some really bad patents out there. Patent experts out there may tell me this can't be done through a court decision, it will create too much ambiguity, it needs to be done through legislation. Perhaps, I'm not a patent attorney. But I do think that not every case should necessarily go straight to injunction just because almost every case before it has. Patent quality and the overall impact on consumers and the market should be considered.

Then there's the issue of the MercExchange business-method patent. At first blush I find myself troubled by such patents, but if a business method truly is innovative and non-obvious then you can make a case for its patentability. This seems to me to come back to patent quality and the obviousness standard, which Jim DeLong and Solveig Singleton addressed in their petition in KSR v. Teleflex. That case could also find itself in front of the Supreme Court.

In an ideal world, the PTO would issue patents after having complete access to prior art materials, they would apply consistent obviousness standards, and there would be a brief appeals process after patent issuance. (Much of this is in legislation pending on Capitol Hill.) In this system any patents surviving the process would be pretty solid. At that point, a strong injunction capability would be entirely appropriate, because it seems to me the problem with injunctions is when they're imposed to support a questionable patent. Reducing injunction power reduces intellectual property power, but if patent quality doesn't improve, the temptation on Capitol Hill -- and possibly in the Supreme Court -- to dilute injunction authority will grow.

posted by Patrick Ross @ 5:30 PM | Patents

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