The threat of a permanent injunction in a patent infringement case looms large over an accused infringer. And thanks to NTP, Inc. v. Research in Motion, Ltd. (the well-known “BlackBerry case”), and our increased reliance on technology, the public has become acutely aware of the immense power and adverse effects that an injunction can have on everyday life. But the threat may be losing a bit of its bite. This past May, the Supreme Court’s decision in eBay Inc. v. MercExchange LLC put an end to a long-standing practice of courts to grant permanent injunctions almost as a matter of course upon a finding of patent infringement.
The specter of a routinely granted injunction provides substantial leverage to patent owners in licensing and settlement negotiations. This is particularly true for so-called “trolls”: patent holders who do not practice their patented technologies, and base their business model on monetizing their patents. Faced with a worst-case scenario of having to shut down production lines worth hundreds of millions or even billions of dollars, accused infringers often have chosen to settle with such trolls, even when the infringement case is of dubious merit.
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