Patent Holders Using Loophole To Sneak Around Supreme Court Decision
from the well,-that's-innovation-for-you dept
Last May, the Supreme Court made an important ruling concerning patents, noting that it didn't make sense for courts to automatically put an injunction in place when patent infringement occurred. The reasoning for this was that patents often cover a very tiny part of a product, and blocking that entire product over a small component doesn't seem fair or reasonable. This doesn't mean that a court can't award an injunction -- just that it needs to take into account the bigger picture of what makes sense and how important the patented part is. This makes a lot of sense -- though, of course, big patent holders weren't at all happy with it. That's because patent holders would use the threat of an injunction, which could completely destroy a business, to force companies to settle patent infringement suits even if the suit wasn't valid. The risk of getting hit with an injunction was just too great. So, it was nice to see the Supreme Court push back at least a little on that point. However, leave it to the patent lawyers to figure out a loophole. We noted last summer that patent holders were skipping the courts and going to the International Trade Commission instead, claiming that infringing products represent unfair trade practices, and the ITC should ban those products from being imported (so it only applies to imported products, rather than domestic ones). This is effectively an injunction within the US for foreign products. Where it gets tricky is that the ITC is under no obligation to follow the court's rulings on this matter or use the standard tests over whether or not a patent is valid or an injunction makes sense. It can just decide there's infringement and ban the sale of the product in the US -- basically giving patent holders a way to get an injunction without ever going to court. As was predicted last summer, this little loophole is now becoming increasingly popular among patent holders, basically giving patent holders two separate ways to attack anyone they believe has infringed. While the ITC (thankfully) hasn't been rushing to approve these types of bans, it still seems reasonable to suggest that the ITC should at least need to follow the same basic standards that the courts need to follow in recognizing a patent and imposing an injunction.