Injunctive Relief in Patent Law Under TRIPS
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Description
Traditionally, intellectual property’s right to exclude has implied that injunctive relief should always be available at the conclusion of a successful infringement action. However, in recent years that view has evolved. As discussed in Chapter 14, in the United States, the 2006 Supreme Court decision in eBay Inc. v. MercExchange imposed a four-part test requiring the plaintiff in a patent case seeking a permanent injunction to demonstrate “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” While this standard appears to impose quite a restrictive test, several members of the court emphasized that even under this discretionary standard, injunctive relief should remain available in the vast majority of cases. Furthermore, Justice Kennedy wrote a concurring opinion delineating specific areas where such relief might be appropriately withheld. First, he suggested that the availability of injunctive relief may furnish firms that use patents primarily to obtain licensing fees (so-called patent assertion entities or PAEs) too much bargaining power in licensing negotiations and that since they are only interested in fees, monetary relief is usually sufficient to compensate them. Second, he stated that when a patent is “but a small component” of a larger product, the opportunity for holdups creates undue leverage. As a result, injunctive relief in such cases could undermine the public interest. Third, he argued, giving the example of business method patents, that injunctions may be withheld when the asserted patents are vague and of “suspect validity.” As the other chapters in this volume attest, many countries have now adopted a similar discretionary approach to the award of injunctive relief. The question we address in this chapter is whether that position is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS or the TRIPS Agreement). To be sure, the TRIPS Agreement is largely conceptual in character and the section addressing enforcement (Part III of TRIPS) is of a very general nature. However, the Agreement does require member states to give courts the authority to order parties to desist from infringement, it requires remedies to deter future infringements, it imposes national treatment and most-favored-nation (MFN) obligations, and it bars discrimination by field of technology. In addition, it cautions member states that protection exceeding its standards is allowable, but only if such a measure “does not contravene the provisions of [the] Agreement.” Thus, TRIPS also sets a ceiling on right-holder protection. Since empirical evidence on the effect of eBay in US patent litigation shows that its impact falls disproportionately on certain right holders (not surprisingly, PAEs in particular) and on specific industries, all of these TRIPS obligations are implicated. In this chapter, we first outline what we regard as the conceptual features of TRIPS. We then consider the individual provisions touching on enforcement and how they might be interpreted. Finally, we discuss specific applications of the discretionary approach and ask whether World Trade Organization (WTO) decision makers would find any of the outcomes incompatible with TRIPS obligations. Our analysis draws heavily on our book, A Neofederalist Vision of TRIPS.
Source Publication
Injunctions in Patent Law: Trans-Atlantic Dialogues on Flexibility and Tailoring
Source Editors/Authors
Jorge L. Contreras, Martin Husovec
Publication Date
2022
Recommended Citation
Dinwoodie, Graeme B. and Dreyfuss, Rochelle C., "Injunctive Relief in Patent Law Under TRIPS" (2022). Faculty Chapters. 1157.
https://gretchen.law.nyu.edu/fac-chapt/1157
