Harmonizing eBay

AutorWalter O. Alomar-Jiménez
CargoPatent Law Professor, University of Puerto Rico School of Law
Páginas17-33
17
HARMONIZING EBAY
ARTICLE
WALTER O. ALOMAR-JIMÉNEZ*
Introduction ................................................................................................................. 17
Part I. Patent Rights ................................................................................................... 20
A. Overview .......................................................................................................... 20
B. Pre eBay............................................................................................................ 20
C. eBay ................................................................................................................. 21
D. Post eBay .......................................................................................................... 23
II. Reasons for Granting a C ompulsory License in the United States .................... 23
A. Patent Trolls ..................................................................................................... 23
1. Generally ................................................................................................... 23
2. Identifying a Patent Troll ......................................................................... 25
B. The patented invention is but a small component of the
infringer’s product ........................................................................................ 27
III. Compulsory Licensing Under the Agreement o n Trade Related
Aspects of Intellectual Property Rights (TRIPS) ............................................... 29
IV. United Sates’ Complianc e with TRIPS ................................................................ 31
A. Reasons for Granting a Compulsory License ................................................ 31
B. Substantive and Procedur al Terms under TRIPS Article 31. ........................ 31
Conclusion ................................................................................................................... 33
INTRODUCTION
FTER THE 2006 SUPREME COU RTS DECISION OF EBAY V. MERCEXCHANGE,1
some commentators have expressed their concerns and argue that
said decision: a) weakens the patentee’s fundamental right to
exclude; b) threatens the status of patents as property rights; and c) puts the
United States in noncompliance with the Agreement on Trade Related Aspects
of Intellectual Property (TRIPS).2 They have brought up these concerns because
* Patent Law Professor, University of Puerto Rico School of Law.
1 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
2 See, e.g., Christopher A. Crotopia, Compulsory Licensing Under TRIPS and the Supreme Court of
the United States’ Decision in eBay v. MercExchange (available at www.cotropia.com/bio/Chapter26--
Cotropia--PatentLawHandbook.pdf , last visited on Mar. 18, 2009) (arguing that the decision in eBay,
regardless of how it is described and applied, weakens the patentee’s right to exclusivity); Yixin H.
Tang, Note, Recent Development: The Future of Patent Enforcement After eBay v. MercExchange, 20
HARV. J. L. & TECH. 235 (2006) (interpreting eBay as stating that patents bestow no property-like
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18 U.P.R. BUSINESS LAW JOURNAL Vol. 1
in eBay, the Supreme Court abolished the Federal Circuit’s general rule that
obliged courts to issue permanent injunctions against defendants-infringe rs
once a patent was found valid and infringed. Rather, the Supreme Court held
that the decision to grant or deny injunctive relief rests within the equitable
discretion of the district co urts. Thus, after eBay, permanent injunctions should
not be granted automatically by the courts. Instead, courts will apply their
equitable discretion to determine if the specific circumstances of the case before
them merit issuing an injunction to stop further infringement by the defendant-
infringer.
If the court denies the issue of an injunction, the patentee will be forced to
grant the defendant-infringer a license to practice his invention. This can be
done in two ways: a) the patentee could negotiate the terms of the license with
the defendant-infringer; or b) the court sua sponte could issue as damages an
ongoing royalty, setting the terms of said license. In either case, the court will
force the patentee to grant a license to the defendant-infringer without the
patentee’s consent; this practice is internationally know n as a compulsory
license.3
Although the United Sates has traditionally expressed disregard for
compulsory licensing systems,4 eBay’s decision, if interpreted broadly, could
change said practice. However, this has not been the case.
To date, there have been fifty-eight district court decisions interpreting eBay
when determining whether to grant injunctive re lief to a patent holder.5 Of
these decisions, forty-four have granted permanent injunctions, 6 while fourteen
have denied it. 7
rights beyond the provisions of the federal patent statues); Harold C. Wegner, Post-eBay Compulsory
Licenses: TRIPS Standards, Paper Presented at the 41st World Congress of the Association
Internationale pour la Protection de la Propriété Intellectuelle (Sept. 6-11, 2008) (arguing that
violations of the United States of the TRIPS may in theory be basis to trigger a dispute settlement
resolution in Geneva under the auspices of the World Trade Organization).
3 See Paice LLC v. Toyota Motor Corp., 504 F.3d 1293 (Fed. Cir. 2007) (Rader, concurring)
(stating that “calling a compulsory license an ongoing royalty does not make it any less a compulsory
license”).
4 See Harold C. Wegner, Injunctive Releif: A Charming Betsy Boomerang, 4 NW. J. TECH. & INTELL.
PROP. 156 (stating that “[t]he United States, led by the pharmaceutical industry, created a treaty
framework to restrict a foreign government’s grant of a compulsory licenses as part of an increased
emphasis on global patent protection.”).
5 As of February 2009.
6 Joyal Prods. v. Johnson Elec. North Am., Inc., 2009 U.S. Dist. LEXIS 15531 (D.N.J. 2009);
Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008); United States Philips Corp. v.
Iwasaki Elec. Co., 2009 U.S. Dist. LEXIS 6869 (S.D.N.Y. 2009); Funai Elec. Co., LTD. v. Daewoo Elecs.
Corp., 2009 U.S. Dist. LEXIS 1618 (N.D. Cal. 2009); Sensormatic Elecs. Corp. v. Tag Co. US, LLC, 2008
U.S. Dist. LEXIS 102690 (2009); Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 2008
U.S. Dist. LEXIS 100539 (D. Del. 2008); Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., 2008
U.S. Dist. LEXIS 79689 (N.D. Cal. 2008); Amgen, Inc. v. F. Hoffmann La Roche Ltd., 2008 U.S. Dist.
LEXIS 77343 (D. Mass. 2008); Extreme Networks, Inc. v. Enterasys Networks, Inc., 2008 U.S. Dist.
LEXIS 88540 (W.D. Wis. 2008); Power-One, Inc. v. Artesyn Techs., Inc., 2008 U.S. Dist. LEXIS 30338
(E.D. Tex. 2008); TruePosition Inc. v. Andrew Corp., 568 F. Supp. 2d 500, 2008 U.S. Dist. LEXIS 58351

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