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eBay Inc. v. MercExchange, L.L.C.

Supreme Court of the United States

March 29, 2006, Argued ; May 15, 2006, Decided

No. 05-130

Opinion

 [*390]  [**1838]   Justice Thomas delivered the opinion of the Court.

LEdHN[1A][] [1A] LEdHN[2A][] [2A] LEdHN[3A][] [3A] Ordinarily, a federal court considering whether to award permanent injunctive relief to a prevailing plaintiff applies the four-factor test historically employed by courts of equity. Petitioners eBay Inc. and Half.com, Inc., argue that this traditional test applies to disputes arising under [**1839]  the Patent Act. We agree and, accordingly, vacate the judgment of the Court of Appeals.

Petitioner eBay operates a popular Internet Web site that allows private sellers to list goods they wish to sell, either through an auction or at a fixed price. Petitioner Half.com, now a wholly owned subsidiary of eBay, operates a similar Web site. Respondent MercExchange, L. L. C., holds a number of patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. See  U.S. Patent No. 5,845,265.  MercExchange sought to license its patent to eBay and Half.com, as it had previously done with other companies, but the parties failed [****4]  to reach an agreement. MercExchange subsequently filed a patent infringement suit against eBay and Half.com in the United States District Court for the Eastern District of Virginia. A jury found  [*391]  that MercExchange's patent was valid, that eBay and Half.com had infringed that patent, and that an award of damages was appropriate. 1

Following the jury verdict, the District Court denied MercExchange's motion for permanent injunctive relief.  275 F. Supp. 2d 695 (2003). The Court of Appeals for the Federal Circuit reversed, applying its "general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances."  401 F.3d 1323, 1339 (2005). We granted certiorari to determine the appropriateness of this general rule. 546 U.S. 1029, 126 S. Ct. 733, 163 L. Ed. 2d 567 (2005).

HN1[] LEdHN[1B][] [1B] LEdHN[3B][] [3B] LEdHN[4][] [4] According to well-established principles of equity, [****5]  a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable  [***646]  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. See, e.g.,  Weinberger v. Romero-Barcelo, 456 U.S. 305, 311-313, 102 S. Ct. 1798, 72 L. Ed. 2d 91 (1982);  Amoco Production Co. v. Gambell, 480 U.S. 531, 542, 107 S. Ct. 1396, 94 L. Ed. 2d 542 (1987).  The decision to grant or deny permanent injunctive relief is an act of equitable  [1579]  discretion by the district court, reviewable on appeal for abuse of discretion. See, e.g.,  Romero-Barcelo, 456 U.S., at 320, 102 S. Ct. 1798, 72 L. Ed. 2d 91.

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547 U.S. 388 *; 126 S. Ct. 1837 **; 164 L. Ed. 2d 641 ***; 2006 U.S. LEXIS 3872 ****; 78 U.S.P.Q.2D (BNA) 1577; 74 U.S.L.W. 4248; 27 A.L.R. Fed. 2d 685; 19 Fla. L. Weekly Fed. S 197

EBAY INC., et al., Petitioners v. MERCEXCHANGE, L. L. C.

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT.

 MercExchange, LLC v. eBay, Inc., 401 F.3d 1323, 2005 U.S. App. LEXIS 4308 (Fed. Cir., 2005)

Disposition: Vacated and remanded.

patent, injunction, district court, injunctive relief, infringement, four-factor, cases, courts, eBay, permanent injunction, categorical, permanent injunctive relief, equitable discretion, principle of equity, right to exclude, patent holder, general rule, license

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Patent Law, Remedies, Equitable Relief, Injunctions, Judicial Officers, Judges, Discretionary Powers, Injunctions, Permanent Injunctions, Infringement Actions, Exclusive Rights, General Overview, Ownership, Patents as Property