eBay’s judicial activism that chills medical tech development—ruins key incentives based on exclusive rights.

It is somewhat circular for courts to hold that the public interest supporting the denial of a permanent injunction is the harm resulting from the availability of only one medical option. The fundamental basis of patent law is to grant exclusive rights for a limited time.248 In other words, the desired effect of the patent system is precisely to have only one option for statutorily limited time. Taken to its logical conclusion, this argument seems to indicate that it is contrary to public interest to allow any patent protection for medical procedures and medical devices in an effort to foster competition and increase the availability of alternative products. Still, in Bard, the court deemed the two devices at issue interchangeable.249 If that is the case, does the denial of a permanent injunction actually serve the purpose of providing more options to the public?

Public interest is not solely allocated to concerns regarding the cost and availability of health care. Society also has an interest in incentivizing innovation, from which the public benefits during the patent term (though perhaps at a higher cost) and, more importantly, after the patent term upon the invention's entrance to the public domain.250 Patent law aims to foster competition only after the patent term expires.251

There is significant concern about the impact rulings like these could have on the business decisions behind medical device production if investors and patent holders cannot rely on robust preservation of their exclusive rights.252 "The eBay decision applies both to previously issued patents and to patents applied for in the future."253 Many of the business decisions to patent and licenses new devices were based, in part, on the understanding that court would enforce exclusive rights.254 The fast-tracked 510(k) approval process combined with the courts' willingness to award compulsory licensing or on- going royalties in lieu of permanent injunctive relief also shifts business incentives, ultimately increasing the likelihood of a generic medical device market.255 A large company could decide that it makes more financial sense to manufacture a device "substantially similar" to a patented device, spend less on the 510(k) process, and risk compulsory licensing fees for infringement than go through the process of creating a pioneer device. Likewise, the company may reasonably calculate it could capture enough of the market share to cover those costs. This possibility reduces the value of a medical device patent and makes investing in these opportunities less attractive and further may actually chill the development of such technologies.

There is evidence that the Patent Act has been interpreted by the courts in a way that may seem to limit the scope of patent protection.256 Here, however, Congress has had several opportunities to redefine the scope of patent protection for medical devices and procedures but declined to do so.257 Judicial activism is particularly problematic given the disproportionate impact of the eBay decision on medical patents.