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Permanent Injunctions and Running Royalties in a Post eBay World

By Mark J. Feldstein, Ph.D. 1

I. Introduction2

The Supreme Courtís 2006 eBay v. MercExchange3 decision continues to transform the way companies and their counsel evaluate and litigate patent infringement.† The two central post-eBay questions are the availability of a permanent injunction and, in the absence of an injunction, the assessment of a running royalty.† As courts have tackled these new issues, some guideposts for litigation strategy and expectations have begun to surface.

II. The eBay Equities

The basic principles of eBay and its progeny are now well known.† Notwithstanding a patenteeís statutory right to exclude, permanent injunctions for patent infringement are a question of equity.† As permanent injunctions are not automatic, a successful plaintiff must prove that (1) it will suffer an irreparable injury; (2) remedies available at law are inadequate to compensate for that injury; (3) the balance of hardships between the parties favors the plaintiff; and (4) the public interest would not be disserved.4† In the absence of a permanent injunction, the court may award an ongoing royalty for the infringerís continued practice of the claimed invention.

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