Neg - eBay - CNDI 2024

Neg – Solvency
Squo S
Patents
eBay decision has led to more effective consideration of patent applicability and remedies
Pamela Samuelson in 2022
Richard M. Sherman Distinguished Professor of Law, Berkeley Law School
Withholding Injunctions in Copyright Cases: Impacts of eBay; 63 Wm. & Mary L. Rev. 773 (2022), https://scholarship.law.wm.edu/wmlr/vol63/iss3/3
Having canvassed the case law on denials of injunctive relief in three different periods—before Campbell, from Campbell to eBay, and post-eBay—the Article turns now to considering, first, whether the post-eBay copyright case law is consistent with traditional principles of equity, and second, why eBay seems not to have opened the floodgates to damages-only remedies for copyright infringement. Section A suggests that even if eBay’s critics are right that the Court deviated from certain traditional principles of equity, courts in the post-eBay copyright infringement cases have only rarely been led astray because of these mistakes. If anything, the eBay decision has had corrective effects on how courts in copyright cases assess whether to issue injunctions. Section B discusses several reasons why courts are still reluctant to withhold injunctive relief when infringement has been found or found to be likely, eBay and its progeny notwithstanding. A. Effects of eBay’s Departure from Traditional Equitable Principles Private law and remedies scholars have heavily criticized the eBay decision for what they charge are its numerous departures from traditional principles of equity when considering whether to issue injunctions.476 One article criticized eBay for having “swept aside long-settled presumptions about when injunctions should issue,” presumptions that courts have long used to “structure or streamline” injunction analyses.477 Especially criticized has been eBay’s rejection of a presumption of irreparable harm when IP rights have been infringed.478 The presumption of irreparable harm has traditionally performed a useful burden-shifting function.479 Once plaintiffs showed that their rights had been or were likely infringed, this presumption shifted the burden onto defendants to offer rebuttal evidence.480 The Campbell decision is more compatible with these principles than eBay in its assertion that a presumption of irreparable injury is sound in “simple piracy” cases.481 Although courts continued to support this presumption in the first several years after eBay, the predominant view now is that eBay overturned that presumption, as Part III.B showed. However sound this criticism may be, eBay’s repudiation of this presumption has had largely salutary effects in copyright cases because courts prior to eBay had treated the presumption as though it was virtually irrebuttable.482 It was akin to the Federal Circuit’s categorical pro-injunction rule in patent cases that the Court overturned in eBay.483 Courts in copyright cases are now more willing to make a meaningful assessment about what harms have resulted from the infringement, whether they can be remedied through monetary relief, and whether future infringements are likely before deciding whether the irreparable harm evidence favors or disfavors injunctive relief.484 During the period in which the hard presumption prevailed, courts had no need to articulate what kinds of harms from copyright infringement were irreparable and why.485 The demise of that presumption has meant that courts have had to start explaining why some harms are indeed irreparable.486
No patenting internal link—no discernable decline in patenting post eBay
Mezzanotti and Simcoe 19
Filippo, Northwestern University Kellogg School of Management; Timothy, Boston University Questrom School of Business and NBER. “Patent policy and American innovation after eBay: An empirical examination.” Volume 48, Issue 5, June 2019, Pages 1271-1281. LJS
If changes in the law of patent damages or eligibility led to a reduction in U.S. patent value, we should expect to see a reduction in the¶ number (or growth rate) of new U.S. patent applications relative to the¶ rest of the world. Fig. 1 compares the number of annual applications¶ filed at the USPTO and EPO between 1990 and 2016, using data from¶ the World Intellectual Property Organization (WIPO). In this and all¶ subsequent figures, the vertical line represents the 2006 eBay decision,¶ and the gray shaded bar corresponds to the great recession years of¶ 2008 and 2009.17¶ Although applications to both patent offices increased over this 26¶ year period, U.S. applications grew faster in both absolute and per¶ centage terms. Moreover, there is no apparent decline is U.S. utility¶ applications following the 2006 eBay decision, regardless of whether¶ we use the EPO or the pre-eBay U.S. application growth rate as our¶ baseline.¶ Fig. 1 suggests that any decline in U.S. patent value caused by eBay¶ and subsequent patent policy changes was not enough to prevent applicants from continuing to seek them, and indeed, pursuing them with¶ greater intensity than in other parts of the world. It is not clear what¶ this trend means for innovation overall. First, as we have already suggested, patents do not measure total innovative output. Second, there¶ may be other explanations for trends in the figure. For instance, the¶ USPTO may have increased rejection rates over time, leading applicants¶ to divide their ideas across more applications or file more request for¶ continue examinations (RCEs). Nevertheless, Fig. 1 is at odds with the¶ hypothesis that recent changes in U.S. patent law are harming domestic¶ innovation incentives. In fact, if we assume that reductions in patent¶ value have a first order impact on incentives to patent, we would expect¶ to find a reduction in US filings relative to Europe.¶ To understand what is driving the faster growth in US applications¶ observed in Fig. 1, we can look at their composition. Specifically, we¶ use industry codes published by USPTO to divide new utility patent¶ applicants into three broad groups: Computing (ICT), Life Sciences and¶ Other (mainly Mechanical and Electrical).18 Fig. 2 plots the number of¶ new applications in each industry group by year.¶ It is immediately apparent from Fig. 2 that most of the increase in¶ U.S. patent applications is associated with computer technologies (with¶ a bit of an assist from the Other group). Changes in patent eligibility¶ that made it easier to obtain software and business method patents¶ notably the 1998 State Street vs. Signature decision– almost certainly¶ contributed to this pattern. At the same time, it may also reflect a response to real economic changes associated with ICT revolution, as¶ suggested by Kortum and Lerner (1999). The dramatic increase in¶ Computer patents, and the problems associated with them (Jaffe and¶ Lerner 2004), are arguably key drivers of the legal changes we are¶ seeking to evaluate.¶ Importantly for us, there does appear to be some slowing in the¶ growth of computer patents after eBay. Such a slowdown would be¶ consistent with the idea that legal and policy changes reduced incentives to seek Computer patents. However, the timing of this slow¶ down coincides with the financial crisis, and Fig. 1 shows a resurgence¶ in the growth rate of total U.S. patent applications between 2012 and 2016.19¶ In the Appendix, we show that the results in Fig. 2 are not sensitive¶ to the way we classify patents. In particular, Appendix Figure A.1 shows¶ very similar patterns based on the alternative technology classification¶ scheme of Hall et al (2001), and it also shows that the increase in US¶ patenting relative to European patenting between 1990 and 2010 is¶ largely associated with Computing.20 Table A.1 provides estimates from¶ a simple regression model showing that, if anything, US patenting has¶ grown faster than European patenting after the eBay decision. 21¶ Since patenting is not equivalent to innovation, we now turn to¶ alternative measures to see whether they provide any evidence that¶ post-eBay U.S. patent policy produced a measurable impact.22
Injunctions
Injunctions are still being overwhelmingly granted and patent access in the US is still strong
Nirav Desai et al in 2023
Patrick Murray, and Roberta Lam; Nirav Desai is a director in the trial and appellate practice group, and the electronics practice group, at Sterne Kessler Goldstein & Fox PLLC.; Patrick Murray is the manager of business development and analytics at the firm.; Roberta Lam is a student at the University of Arizona’s James E. Rogers College of Law. She was a 2023 summer associate at Sterne Kessler.; A Look At US Injunctive Relief Trends Amid UPC Chatter; https://www.sternekessler.com/news-insights/publications/look-us-injunctive-relief-trends-amid-upc-chatter/
U.S. courts determine whether a permanent injunction is appropriate using the test from the 2006 Supreme Court decision in eBay Inc. v. MercExchange LLC. Under this test, the proponent must prove that: It has suffered an irreparable injury; Legal remedies are insufficient compensation; A remedy in equity is necessary; and A permanent injunction would not be counter to public policy.[2] Under eBay, the Supreme Court has held that the Patent Act does not create a predisposition for the granting of permanent injunctions. Rather, the court has firmly held that the equity principles of injunctive relief apply in patent cases as it does in any other cases. From 2022-2023, U.S. courts have granted 22 out of 38 utility patent cases a permanent injunction, which is roughly 58%. U.S. Trends and Exceptions An analysis of data from Docket Navigator reveals a recent uptick in both the number of motions for preliminary injunctions as well as the frequency that these motions are granted in patent cases. It’s important to note that these trends appear to be driven in large part by anti-counterfeiting cases involving design patents filed against so-called John Doe defendants, particularly in the U.S. District Court for the Northern District of Illinois. At the same time, the analysis underscores the extent to which persuasive arguments can secure preliminary injunctions despite the legal headwinds against plaintiffs receiving this type of relief. Similar Docket Navigator data shows that in patent cases that have gone to trial, courts grant motions for permanent injunctions in a majority of cases. Despite this trend in outcomes, plaintiffs have tended to seek injunctive relief after trial in fewer cases over the past several years, perhaps suggesting that only the strongest arguments for permanent injunctions are being presented to judges. The circumstances of the case are important as well. U.S. courts will carve out exceptions for injunctive relief if there is sufficient evidence to call into question the ability of both parties’ ability to return to the status quo. For example, appellate courts have repeatedly recognized that injunctions may be “appropriate based on barriers to collectability after judgment,” as per the 2017 SAS Institute Inc. v. World Programming Ltd. decision in the U.S. Court of Appeals for the Fourth Circuit.[3] Courts will examine the defendant’s assets and take into account obligations owed by insolvents when determining whether monetary damages is an available remedy.[4] Finally, the U.S. is a particularly favorable venue for design patents. From 2022-2023, 62 out of 69 design patents were granted a preliminary injunction, roughly 90%. This is an increase from 2021-2022, where 43 out of 56 design patents were granted a preliminary injunction, roughly 77%. For the design patents that were taken to trial in 2022 and 2023, 81 out of 83 design patents were granted a permanent injunction, which is roughly 98%. This is also an increase from 2021-2022, where 48 out of 56 design patents were granted a permanent injunction, roughly 92%. Concluding Remarks While the predicted availability of injunctive relief is one reason the UPC is the hottest topic in intellectual property circles at the moment, recent trends suggest that the U.S. is still a great destination for injunctive relief in many situations. The U.S. represents a significant share in terms of gross domestic product — even when compared to the combined UPCA signatory states ($26.9 trillion vs. $15.5 trillion)[5] — which makes it a venue of economic importance that cannot be ignored.
Legitimate injunctions were not affected by eBay—trolls are the only ones having a hard time
Mckiernan 22
Marie, Associate with Wolf Greenfield Intellectual Property Law. "An Exercise in Restraint: Seeking and Combatting Injunctive Relief", IPWatchdog, 8-23-2022, https://ipwatchdog.com/2022/08/23/exercise-restraint-seeking-combatting-injunctive-relief/id=151016/ LJS
When we examine the number of contested motions for permanent injunction in U.S. district courts from 2013 through 2017, as reported by Lex Machina, we see two things. First, the number of motions filed for permanent injunctions are generally low since this remedy is only available where the case is litigated all the way to the conclusion and a finding of infringement has been entered. Next, we see an overall increase in the number of motions for permanent injunctions filed by patentees over the course of five years. However, thereafter in 2018, we see a drop in both the number of motions filed and the grant rate of such motions.¶ Permanent Injunction Grant Rates¶ While it is not entirely clear why the number of motions for permanent injunctions dropped so significantly from 2017 to 2018, one potential reason for this is introduction of inter partes review with the passing of the America Invents Act (AIA) in 2011, which introduced substantial implications for parallel district court litigation. We saw the filings for IPRs substantially increase in 2013. The normal progression of a district court case is three to five years in the United States and so it is possible that the filings of IPRs impacted overall patent success rates, and in turn, the number of motions for permanent injunctions.¶ The additional decline seen in permanent injunctions after 2018 may be attributable to the decrease in overall patent case filings in 2018. Nearly 40% fewer patent cases were filed in 2018 as compared to those filed in 2015. This leads to fewer cases going to trial and in turn, fewer cases where the patent owner is successful and seeks permanent injunctive relief. Statistics also suggest that approximately 90% of high-tech litigation in 2018 was initiated by non-practicing entities (NPEs) which may have negatively impacted the number of injunctions sought at the end of a case years later. As we explore below, NPEs can experience heightened difficulty meeting several of the eBay factors.¶ In addition to seeking injunctive relief after a finding of infringement, patentees can seek preliminary injunctive relief at the outset of litigation. Such relief is extraordinary given the early stage of the case as compared to the end of litigation where a merits determination has been reached. We analyzed the grant rate for motions for preliminary injunctions filed between January 2, 2013, and December 31, 2020, in U.S. district courts as reported by Lex Machina. Of the 490 motions for preliminary injunctions filed, 41% (203 motions) were granted. You may note that there are significantly more motions for preliminary injunctions (490) than permanent injunctions detailed above (207). This may seem counterintuitive given that preliminary injunctions are harder to obtain, however, there are several reasons for the increased filings.¶ First, we’re starting with a fairly select group of cases. The filing of a preliminary injunction motion is not done lightly given the cost of what ends up being an expensive mini-trial at the start of a case. Thus, we most often see highly motivated plaintiffs filing such motions. Often these are competitors who have strong infringement cases. Another reason for the larger number of filings is the Federal Circuit’s holding in In re Seagate Tech., LLC (abrogated by Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 136 S. Ct. 1923, 195 L. Ed. 2d 278 (2016)).¶ The decision makes the filing of a motion for a preliminary injunction a prerequisite for obtaining or defending against requests for enhanced damages for post-filing conduct in patent cases:¶ “[W]hen an accused infringer’s post-filing conduct is reckless, a patentee can move for a preliminary injunction, which generally provides an adequate remedy for combating post-filing willful infringement … A patentee who does not attempt to stop an accused infringer’s activities in this manner should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement did not rise to the level of recklessness.”¶ While motions for preliminary injunction may outnumber the filings for post-judgment injunctive relief, grant rates do not. Comparing the grant rate of preliminary (41%) and permanent (87%) injunctions, we see that the bar is much higher at the outset of the case. This is likely attributable to the standard used by courts to assess such preliminary requests. The standard for obtaining a preliminary injunction echoes most of what we see in the eBay test for permanent relief. However, the patentee must also show a likelihood of success on proving infringement. Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364, 1372 (Fed. Cir. 2005). This results in a mini-trial on the merits, often necessitating expert testimony. Moreover, a finding of both likelihood of success on the merits and irreparable harm to the patentee are required to obtain the injunctive relief at the outset of the case. General Protecht Grp., Inc. v. Levitron Mfg., Co., 651 F.3d 1355, 1366 (Fed. Cir. 2011).
Ebay decision has not hindered injunctions-
Samuelson 22 (Pamela, professor of law and information, “Withholding Injunctions in Copyright Cases: Impacts of eBay,” https://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=3927&context=wmlr)
In the past decade, the eBay decision has had a considerable impact on the issuance of injunctions in copyright cases. The previously common view that any violation of an exclusive right entitles copyright owners to injunctive relief because that violation, like a trespass to land, constitutes irreparable harm cannot be reconciled with eBay’s conception of exclusive rights and remedies as “distinct” from one another. eBay has meant that copyright owners now bear a much stiffer burden of proof when seeking injunctive relief. It is no longer enough to show actual or likely success on the merits. The longstanding presumption of irreparable harm is no more, and plaintiffs who fail to offer meaningful proof of such harm are likely to be denied this remedy. It is fair to say that eBay resurrected irreparable harm as a key factor in judicial decisions about whether to exercise discretion to order this remedy for infringement. Even so, Campbell’s endorsement of presuming irreparable harm in “simple piracy” cases (that is, when the defendant has made exact or near exact copies of the plaintiff’s work that is undercutting the market for legitimate copies) should perhaps be revived as a reasonable exception to eBay’s general rule against presumptions. Courts are also more attentive now to hardships that injunctions impose on defendants as a balancing factor. Defendants have more opportunity to counter plaintiffs’ arguments about hardships. The public interest, however, has so far played a lesser role in the post eBay cases, except in close or novel issue cases. Going forward, courts should pay closer attention to the effects of injunctive relief on public interests and consider harms that injunctions would cause to innocent third parties as part of the public-interest factor rather than in the hardship-balancing factor. The

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