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.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. identicon
    a known e-mouse, 2 Jun 2007 @ 5:44pm

    mother always said

    it's never a good idea to get in a pissing contest. ya see, even if you win, you still end up smelling like piss.

    just realize that there are chowder heads in real life that never speak up 'cause they're chicken so they get online and, whamo, they flex their e-muscles.

    just ignore the fools that don't make sense, like angry dude, because it's the fools that make sense that you have to look out for. them's is just plain dangerous.

    but yeah, this loophole thing, both mike and dmm have it right. even if companies had the option of going to the itc before the supreme court ruling, why should they?

    dmm's correct because:

    this option was there before and is viable now. however, before the u.s. supreme court ruling, it was far easier to threaten with a u.s. court injunction as well as being a blanket injunction on domestic as well as foreign patents.

    the cons about going to the itc instead of going to u.s. courts first, well, mike states them. the itc can only put injunctions on imported products to the united states, and not on domestic ones that might infringe a patent. so, that blocks that avenue of persuit for a good number of patent holders.

    mike's correct because:

    well, he wrote the story. heh, all humor aside, this is a loophole because it's a way of skirting a law, made by the u.s. government to stop or restrict a certain practice, legally in a way that is obscure and not readily apparent to everyone.

    gosh i love loopholes, my accountant found me a really good one this past tax season, can't remember it, but it had to do with my car, got me most of my taxes back. heh, and i am in no way rich, he's a friend i went to school with.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it

Email This

This feature is only available to registered users. Register or sign in to use it.