Some Heartening News on Patents

With all the bad news on patents, there was a glimmer of good news yesterday. You may recall that Ebay was sued by a "patent troll," a company whose only business is to acquire patents and enforce them. It can be a highly profitable business, especially for a law firm who has the assets to vigorously enforce them.

One of the most powerful tools a troll has is the "automatic" issuance of a restraining order once a jury verdict is issued, effectively stopping the alleged infringer from using the "purloined" technology. (By the way, so as not to complicate this too much, just insert the word "alleged" about every other word.) This puts the defendant out of business, and is a strong reason not to appeal decisions. Because these patent cases are not often appealed, they have not had higher court review.

Well, Ebay was sued, and lost, a patent case over using a fixed price in an auction. Yes, Virginia, there was a patent covering fixed price auctions. It held on, and yesterday, the Supreme Court ruled that the restraining orders need not be automatic. The actual ruling is a lot more complex than this, but this is the essence.

A small victory, but at least the door to a more reasoned approach to Intellectual Property has been opened. It is time for Congress and the courts to address where we have come since the first patent law in 1789. The march of technology has significantly increased its pace, and software driven systems have blurred the line between abstract idea and patentable technology.

-gene