New Bill Introduced In U.S. Congress To Overturn The 2006 EBay Decision

Historically, patent infringement judgments in U.S. federal courts led almost automatically to injunctive relief under 35 USC 283. This section of the patent statute provides that a court "may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable." The situation changed with the Supreme Court's 2006 decision in eBay Inc. v. MercExchange. The eBay decision rejected the notion that injunctions should be generally granted upon a showing of infringement and required instead a detailed analysis based on four principles of equity: irreparable injury to the plaintiff, inadequacy of legal remedies, balance of hardships, and public interest. This decision eliminated the presumption of injunctive relief, particularly affecting non-practicing entities (NPEs). Since the eBay decision, many U.S. patentees have faced challenges in obtaining injunctive relief.

A new bipartisan bill, the RESTORE Patent Rights Act of 2024, was recently introduced in both houses of the U.S. Congress to return to the pre-eBay situation. The bill introduces a rebuttable presumption that an adjudged patent infringer should face injunctive relief, thus simplifying the process. Under the bill, 35 USC 283 would be amended by adding the following subsection:

Supporters argue that the eBay decision undermined the exclusivity of patent rights and encouraged predatory infringement by large companies. Opponents of the bill cite concerns about enabling opportunistic "holdup" situations by NPEs. Despite the bill's bipartisan support, strong opposition and the upcoming election year make its passage uncertain.

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