Patent trolls acquire patents not to practice the inventions, but to assert them against other companies. Usually, patent trolls are able to obtain an almost automatic permanent injunctions against the defendant if liability is found. The injunction, in turn, provided leverage to the patent trolls when negotiating settlements. For example, in NTP v. Research in Motion, a $612 settlement was reached when a district court was contemplating the permanent enjoinment of Research in Motion’s Blackberry service.
This tactic may change with the U.S. Supreme Court’s ruling in eBay, Inc. (eBay) v. MercExchange. The Supreme Court decided in favor of eBay. In the case, MercExchange alleged that eBay’s “Buy it Now” feature infringed a business method patent. Except for licensing the technology, MercExchange did not conduct any commercial activity involving the patented technology.
The Supreme Court clarified that plaintiffs seeking permanent injunctions in patent cases must satisfy the following elements: (a) the plaintiff suffers an irreparable injury, (b) money or other legal damages are inadequate, (c) balancing of hardships, (d) public interest would not be disserved by the granting of an injunction. The Supreme Court held that injunctions in patent cases fall within a court’s equitable discretion, and that owning a patent that has been infringed does not give a near-automatic right to an injunction.
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