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eBay wins Supreme Court backing

Overturns lower court ruling

The US Supreme Court has overturned a lower court decision to stop eBay from using a prominent feature on its website because of a patent dispute, according to reports.

In effect the Supreme Court decision overturns a long-term US court practice of issuing injunctions against infringing products in nearly all patent cases. Much of the US tech industry had sided with online auction site eBay, which, in May 2003, was found guilty of infringing a "buy it now" patent held by MercExchange, a small auction site.

The Supreme Court today unanimously ruled against an appeals court decision saying injunctions must be generally issued against companies found guilty of infringing patents, according to newswire reports and the online edition of the Wall Street Journal. The case now goes back to a lower court, which will consider several factors in weighing whether it should grant the injunction requested by MercExchange.

The US District Court for the Eastern District of Virginia declined to issue an injunction after a $35m (about £18.5m) jury award, but the US Court of Appeals for the Federal Circuit reversed that decision, saying an injunction against eBay using the "buy it now" feature was appropriate.

Siding with MercExchange in the case were independent inventors and many pharmaceutical companies, which spend millions of dollars developing drugs and want to protect their patents.

The ruling is likely to shift the balance of power between inventors - some of them one-person operations or small businesses - and large companies that sell products such as software and hardware, said observers of the case. A court ruling for eBay could make it harder for inventors to collect patent damages and easier for large vendors to market their products without fear of a court shutting them down.


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