EFF Weighs In On eBay-Merc Exchange Patent Dispute

by Glen Shapiro, LawAndTax-News.com, New York

31 January 2006

The Electronic Frontier Foundation (EFF) announced last Thursday that it has filed a friend-of-the-court brief with the United States Supreme Court, asking justices to overturn a court ruling in a patent case with dangerous implications for free speech and consumers' rights. The Public Patent Foundation, the American Library Association, the American Association of Law Libraries, and the Special Library Association joined EFF on the brief.

The brief was filed in connection with a patent dispute between online auction site eBay and Virginia-based MercExchange.

In the summer of 2003, a Virginia District Court ruled that with its 'Buy It Now' function, eBay had infringed upon a patent for direct online buying held by MercExchange founder and former CIA engineer, Tom Woolston.

Last year, the Federal Circuit Court of Appeals ruled that eBay had violated MercExchange's online auction patents and that eBay could be permanently enjoined, or prohibited, from using the patented technology.

However, the EFF is objecting specifically to the part of the ruling which stated that patentees who prove their case have a right to permanent injunctions under all but "exceptional circumstances," like a major public health crisis.

This radical rule created an "automatic injunction" standard that ignored the traditional balancing and discretion used by judges to consider how such a decision might affect other public interests - including free speech online.

"As more and more people use software and Internet technology to express themselves online, the battle over software patents has grave implications for online speech," observed EFF Staff Attorney Corynne McSherry, continuing:

"Courts must work harder than ever to ensure that technologies like blogs, email, online video, and instant messaging remain free and available to the public."

The Foundation argues that the lower court's ruling stems in part from a misperception that patents are just like other forms of property, with the same rights and remedies.

However, it suggests that Supreme Court rulings have repeatedly emphasized that patents are a unique form of property, designed to achieve a specific public purpose: the promotion of scientific and industrial progress.

"Part of the court's duty in patent cases is to make sure that the system helps the public's right to free speech instead of hurting it," concluded EFF Staff Attorney Jason Schultz. "If this ruling is allowed to stand, courts won't be able to do what's right."

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