vnunet.com analysis: US government sides against eBay in patent spat

The US government has sided against a request by eBay to change an automatic injunction provision

In a case before the US Supreme Court that could fundamentally change patent law, the US government has sided against a request by eBay to change an automatic injunction provision. 

The case seeks to overturn a prior ruling requiring a court to automatically issue a permanent injunction if they find that a party is infringing on a patent.

Current rules force a company that is found violating a patent to stop selling its disputed product or service, without paying attention to the circumstances.

The US government aired its objections to overturning the prior ruling in a so-called amicus curiae (literally 'friend of the court'), a filing in which groups that are not a party in the case can air their opinions.

A number of such briefs have been filed from companies including Research in Motion, General Electric and the Electronic Frontier Foundation (EFF). 

A jury in 2003 found eBay guilty of violating a patent owned by MercExchange and ordered the auction giant to pay $25m in damages. The court decided against imposing an injunction at the time, which was later overruled.

The eBay case is scheduled to be heard on 29 March before the Supreme Court.

The case has strong similarities to the RIM-NTP battle, in which the BlackBerry maker was forced to pay $612.5m to settle the lawsuit and purchase a licence for a patent that is likely to be invalidated.

"NTP was awarded $500m more than the jury thought it should get," Jason Schultz, a staff attorney with the EFF, told vnunet.com after the RIM settlement. "This is a clear example of what is wrong with the patent system." 

In the RIM case the injunction provision would have forced the company to suspend its service in North America. The eBay case could force the auction website to stop offering its 'Buy it now' feature.