Tuesday, December 06, 2005

Patent Injunctions - Pulling Out the Stops?

Last week the US Supreme Court decided to re-examine the use of court injunctions in intellectual property proceedings, particularly in the context of patent disputes. Arising originally out of the eBay litigation, the Supreme Court will be considering whether the application of injunctions in patent disputes is mandatory, as decided by the federal patent court, the Court of Appeals for the Federal Circuit, in the eBay case.

While it is reported that some powerful interests, including the pharmaceutical industry, are in favour of mandatory injunctions, regarding some industries the real concern is that mandatory injunctions will shut down production during the course of proceedings. In other words, if an injunction is granted on one particular patented technology in a product (where the products in question often involve numerous and individually patented technologies), then the whole production of that good will be halted until the dispute is resolved. Aside from the obvious and immediate commercial implications, if the ordering of injunctions is deemed mandatory and the courts no longer have discretion as to whether to stop production, the consequences for high technology businesses may be such that they impact upon the very processes of innovation in these industries themselves.

As Patti Waldmeir suggested in last Wednesday's Financial Times newspaper, "Some patent experts (not normally an excitable lot) have said it could turn out to be the most improtant patent case in a century ... Abortion may be what captures the headlines but the court knows that patent policy touches Americans where it really matters: in their innovation economy."

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