Subject: Re: The term "intellectual property" considered useful
From: Seth Johnson <seth.johnson@RealMeasures.dyndns.org>
Date: Sun, 28 May 2006 17:07:02 -0400


The case is a resounding rebuke against the general principle
approach applied by the Federal Court of Appeals.  They treat
that general principle for remedies as arising from treating
patents as having "the attributes of personal property
[including] the right to exclude others from making, using,
offering for sale, or selling the invention" and contrast, and
dismiss, that approach against the four factor equity test.

To be sure, the Patent Act also declares that "patents shall have
the attributes of personal property," 261, including "the right
to exclude others from making, using, offering for sale, or
selling the invention," 154(a)(1). According to the Court of
Appeals, this statutory right to exclude alone justifies its
general rule in favor of permanent injunctive relief. 401 F. 3d,
at 1338. But the creation of a right is distinct from the
provision of remedies for violations of that right. Indeed, the
Patent Act itself indicates that patents shall have the
attributes of personal property "[s]ubject to the provisions of
this title," 35 U.S.C. 261, including, presumably, the provision
that injunctive relief "may" issue only "in accordance with the
principles of equity," 283.



Thomas Lord wrote:
> 
> Seth Johnson wrote:
> > The case is a resounding rebuke against the general principle
> > approach ("that courts will issue permanent injunctions against
> > patent infringement absent exceptional circumstances") applied by
> > the Federal Court of Appeals.
> >
> 
> That's partly correct.


It's 100% correct.


> The court rejected *two* principles, one
> stated by the District Court and another stated by the Appeals Court
> when it overturned the District Court.
> 
> It isn't in dispute, at this stage, whether or not the patent is valid
> and violated.   A jury found the patent to be both valid and violated.
> That stands.
> 
> What is the relief for a plaintiff who's patent has been violated?
> Perhaps they are just entitled to some damages?  Or, perhaps,
> the court should order the violator to cease practicing the patent.
> As in: "Hey, eBay, shut down!"
> 
> By analogy:  you and I have played stick-ball in the street for
> years and years without incident.   A freakish play one day
> sends the ball into a neighbors yard where it smashes their
> garden gnome.   The neighbor sues asking for damages (to
> replace the gnome) AND asking the court to order us to
> never play stick-ball in that street again.   Should the court
> grant that injunction?
> 
> On the other hand, we hold soccer practice in one yard and
> 8 times in 9 months a stray ball has broken a neighbor's
> window.   In addition to paying for the windows, might it
> not be reasonable for the court to order us to hold practice
> elsewhere?
> 
> District apparently decided *against* injunctive relief for
> plaintiff and, in their opinion, stated a general principle as
> to why.   If unchallenged, that general principle would then
> become precedent for District and lower courts.
> 
> I don't have the full language of District's opinion handy but
> the SCOTUS decision quotes it a bit and it's very FSB relevant.
> District gave a partial finger to patent trolls.   District (according
> to SCOTUS) said that since plaintiff is in the business of
> licensing patents, but not in the business of practicing them
> themselves, that therefore injunctive relief was not appropriate.
> That doesn't say trolls can't collect damages but it would say
> that trolls can't easily coerce companies like eBay to settle
> by threatening to get an injunction and shut them down.
> 
> SCOTUS affirmed Appeals, looking at District's
> general principle and saying "No.  No way.   You're just
> making that up.   We've long had a way to decide when
> injunction is appropriate and that isn't it."   (They are
> amusingly snide in pointing out that District acknowledged
> the traditional tests but then blew them off.)
> 
> So: the door is still open for trolls to get injunctions.
> 
> Next, SCOTUS takes on Appeals who were also just "making
> stuff up".   Appeals basically said "Injunctive relief is the
> default,  there has to be a really good reason not to provide
> it."    SCOTUS says "No again.   See, for years and years
> now we've been using this four part test in questions of
> equity.   Stop making stuff up."
> 
> So: patent trolls don't get a free ride to injunction.  A
> patent does not function like a restraining order.
> 
> This is where your reading goes badly off track:
> > They treat that general principle for remedies as arising from
> > treating patents as having "the attributes of personal property
> > [including] the right to exclude others from making, using,
> > offering for sale, or selling the invention" and contrast, and
> > dismiss, that approach against the four factor equity test.
> 
> They absolutely do no such thing.  Quite the opposite.


They absolutely do do such a thing.  Your preachy little noggin
is imagining opposites where there are none.  You basically had a
speech you wanted to deliver, key trope of which being "See? It's
all about what the law really means" -- and deliver it you must.

You went on at great length in your message, but I decided not to
waste time being snarky.


Seth


> SCOTUS *embraces* "patents as personal property".  They
> find other language in the statue to help establish that, in
> matters of equity (what relief to grant to a successful plaintiff)
> patents are *ordinary* property to which the usual rules
> apply.   It is on that basis that they insist on the four factor
> test.
> 
> See, ya got yr property rights, and ya got yr access to relief
> for violation of those rights.   Those are, except by statute,
> two separate things.   It's often up to the courts to decide what
> relief is appropriate once it is well established that the property
> rights are violated.   Doesn't matter what kind of property we
> are talking about.   The court has some general principles such
> as the four factor test for these conditions.  And here we are.
> 
> The lower courts now have to go back and reason:
> 
>    1) Ok, the patent (the right to exclude) is property.
>    2) Defendant's actions violated that property.
>    3) Was plaintiff really harmed?  Are they continuing
>         to be harmed by defendant's actions?
>    4) Are there statutory damages sufficient to make
>         plaintiff whole?   Is injunction the only way?
>    5) Is it wildly unfair to either party to either
>         issue or not issue an injunction?
>    6) Is there a public interest against an injunction?
> 
> The majority opinion doesn't say much more than "stop
> making stuff up, read the law, and go back and apply
> the ordinary tests for a property dispute."
> 
> J's Kennedy, Stevens, Souter, and Breyer say some
> tantalizing stuff in their concurrence.  This *minority*
> of the court saw fit to acknowledge, in general terms,
> the issues of patent trolls and of the cumulative nature
> of invention.   They are concerned that easy injunctions
> making trolling too easy -- not the incentive intended.
> They are concerned that one little patent violation in
> a much larger system is both increasingly the rule and
> not reason enough to issue an injunction.   Hey, I've
> heard RMS give that speech (only he would also
> argue against *damages* and even the right to
> take action, for at least software patents).   Basically,
> from the free software perspective, there's signs that
> this *minority* of the court is starting to "get it."
> They even raise an eyebrow at the validity of
> a lot of patents in recent years.   They even point
> out that as a matter of history, the patent system
> is now (in cases like this) doing something that
> may be quite different from what it did historically.
> 
> They then embrace the four factor test on the grounds
> that it is plenty enough (in their view) flexible enough
> to respond to recent developments in how patent law
> is being used.   "If it ain't broke, don't fix it.":
> 
>    "[....]The potential vagueness and suspect validity of some of
>    these patents may affect the calculus under the four-factor
>    test.
>      The equitable discretion over injunctions, granted by the
>    Patent Act, is well suited to allow courts to adapt to the
>    rapid technological and legal developments in the patent
>    system. For these reasons it should be recognized that
>    district courts must determine whether past practice fits
>    the circumstances of the cases before them. [....] "
>                                 -- Kennedy et al.
> 
> In other words, "Yes, injunctions used to be almost
> automatic because of the nature of what was being
> patented but that doesn't mean they should be today.
> All those earlier injunctions should be understood to
> follow from general principles of equity such as the
> four factor test.   The `batting average' of injunctions
> is not a legal argument in favor of one today -- stick
> to the principles and consider them in light of changing
> circumstance."
> 
> -t

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