(The) unintended consequences of eBay v. mercexchange

Abstract

The Federal Circuit has historically been seen as pro-patent. As such, the court developed a general rule that injunctions should issue once infringement and validity had been established. However, around the turn of this century, the ease with which patent owners could obtain injunctions was coming under increasing scrutiny. In Congress, the Patent Reform Act was poised to limit the use of injunctions, and in the public sphere, the Blackberry case had raised awareness of the issue. In front of this backdrop, the eBay case worked its way through the judicial system. The Supreme Court would ultimately take up the issue, dramatically changing the law in the process. This article empirically evaluates the aftermath of the eBay decision, looking at nine years of post-eBay injunction decisions. Numerous early studies were done to evaluate the effect of the eBay decision on NPEs. This study confirms the findings in the earlier literature that NPE plaintiffs are significantly disadvantaged. More interestingly, our results also reveal that firms in health related industries are likewise granted injunctions at significantly lower rates.