THE U.S. SUPREME COURT ON MONDAY SET ASIDE A PATENT INJUNCTION AGAINST ONLINE AUCTIONEER EBAY INC., BUT ALSO REJECTED A KEY ARGUMENT MADE BY THE COMPANY THAT COULD HAVE NARROWED THE RIGHTS OF PATENT HOLDERS, REUTERRS REPORTED. THE HIGH COURT UNANIMOUSLY VACATED AN APPEALS COURT RULING IN FAVOR OF MERCEXCHANGE, A DEVELOPER OF E-COMMERCE TECHNOLOGY THAT SUED EBAY FOR PATENT INFRINGEMENT, SAYING AN APPEALS COURT HAD FAILED TO APPLY THE PROPER LEGAL TEST IN DECIDING WHETHER MERCEXCHANGE SHOULD BE GRANTED AN INJUNCTION BARRING EBAY FROM USING ITS TECHNOLOGY. THE JUSTICES SAID THE APPEALS COURT WENT TOO FAR WHEN IT FOUND THERE IS A "GENERAL RULE" THAT THE OWNERS OF PATENTS HAVE THE RIGHT TO AN INJUNCTION AGAINST INFRINGERS AND SENT THE CASE BACK TO THE TRIAL COURT FOR FURTHER PROCEEDINGS. HOWEVER, THEY ALSO REJECTED A CRUCIAL ARGUMENT ADVANCED BY EBAY, AND EMBRACED BY A U.S. DISTRICT COURT THAT HANDLED THE CASE, THAT COMPANIES CAN LOSE THEIR RIGHT TO AN INJUNCTION IF THEY HAVE AGREED TO LICENSE OUT THEIR TECHNOLOGY OR ARE NOT USING IT TO MAKE A PRODUCT THEMSELVES. "THE PENDULUM HAS NOT SWUNG VERY FAR WITH THIS RULING," SAID STEVE MAEBIUS, A PATENT LAWYER WITH THE FIRM FOLEY & LARDNER. "THERE'S A LITTLE BIT OF SOMETHING IN HERE FOR EVERYONE, BUT I STILL THINK IT'S NOT A MAJOR DEPARTURE FROM WHAT THE LAW WAS PREVIOUSLY." EBAY SHARES WERE OFF 30 CENTS, OR NEARLY ONE PERCENT, TO $31.19 IN AFTERNOON TRADING ON THE NASDAQ ON MONDAY. MERCEXCHANGE ISSUED A STATEMENT SAYING IT WAS CONFIDENT THAT THE DISTRICT COURT WOULD IMPOSE AN INJUNCTION ON EBAY "WHEN IT FAIRLY APPLIES THE TRADITIONAL PRINCIPLES OF EQUITY SET FORTH IN THE SUPREME COURT'S OPINION ... " EBAY ISSUED A STATEMENT PRAISING THE SUPREME COURT RULING AND EXPRESSING CONFIDENCE THE LOWER COURT WOULD RULE IN ITS FAVOR. --MORE
