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Supreme Court lets eBay keep using 'Buy It Now' ! - 5/16/2006 7:30:30 AM   

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In a decision giving eBay a new chance to fight an injunction against its "Buy It Now" pricing feature, the Supreme Court ruled Monday that a company found liable for patent infringement should not necessarily be forced to stop using the patented technology.

The unanimous ruling may make it tougher for small firms to win such battles. The decision is a boost for big tech companies, which argue that patent holders would wield too much leverage if judges routinely imposed injunctions - on top of money damages - in patent lawsuits. 

The court said that trial judges have discretion on whether to issue a permanent injunction, which was a victory for eBay. But it handed a small victory to challenger MercExchange, too. A lower court judge had said MercExchange shouldn't be granted an injunction because it doesn't actually make any product using the technology. Thus, it couldn't be hurt by eBay's continued use of the technology. The Supreme Court rejected such reasoning. 

"The court went out of its way to reject broad rules on either side," says Andrew Pincus, who wrote a brief on behalf of the Business Software Alliance and other industry groups. 

Monday's dispute arises against a background of fierce competition in the tech world and the specter of "patent trolls," little companies that obtain patents on promising technology in order to gain settlements from big tech firms. 

A jury had found eBay liable for infringement of patents held by MercExchange, a Virginia company, related to eBay's feature allowing customers to buy items for a fixed price. The jury awarded damages of $35 million, later reduced by $5.5 million. 

The judge denied MercExchange's request for an injunction; the U.S. Court of Appeals for the Federal Circuit reversed. It said once a jury has found infringement, an injunction should be imposed "absent exceptional circumstances." 

In an opinion by Justice Clarence Thomas, the high court rejected that view and said a traditional general test for the imposition of injunctions applies to patent disputes. That test requires a showing that money is not enough to compensate for the infringement and that shutting down the technology would not hurt the public. 

The court sent the case back for a new hearing, saying it had no position on whether a permanent injunction should be imposed. 

Jay Monahan, an eBay deputy general counsel, said in a statement that eBay was "gratified" by the ruling. EBay had argued that innovation would be stifled if an injunction were issued while a company redesigned its technology to avoid patent problems. 

Seth Waxman, who represented MercExchange, said he hoped the trial judge reconsidering the case would find that an injunction should be imposed.

Source : YahooNews
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