eBay marks the beginning of Round Two in the patent reform movement

The oral arguments in eBay v. MercExchange are over and now we wait to hear what sayeth the Supremes on the injunctive relief issue. (Update May 15, 2006 - click here for an analysis of the Supreme Court decision)  Some expert Court watchers are reporting that the tone of the questioning during yesterday’s oral arguments revealed a likelihood that affirmance of the right to injunctive relief can be expected.  But the real issue, of course, is whether the ”nearly automatic” granting of injunctions following a finding of infringement will be trimmed back.  For that, we’ll have to wait until a decision is rendered in June.

But eBay marks a beginning even more that it does an end.  With the injunctive relief issue presumably settled, we’re now set to head into Round Two of the patent reform movement in the United States.  Everything that has happened thus far is merely a prologue that served to define the real battle lines.

The eBay decision, no matter the outcome, will likely serve to bolster the position of some in the reform debate and enrage others.  Incentives and desires to bargain on particular reform measures, and maybe even the ability to do so, may change and the power of Congress to legislatively overrule the Court may be supported by some as a nuclear option.

We’re really at a crossroads.  Round Two could be marked either by bitter disagreement that completely stalls the process or by a renewed focus on the reform measures on which agreement amongst stakeholders has been previously expressed, such as the fee diversion issue.  This seems timely, considering the facts that the Justices apparently inquired about patent quality during yesterday’s arguments and that the temporary fix to the diversion problem expires at the end of fiscal year 2006.

We may get a glimpse at Round Two as early as next Wednesday, when the House Subcommittee on Courts, the Internet, and Intellectual Property holds a patent reform hearing with the interesting caption “Patent Quality Enhancement in the Information-Based Economy.”

Considering the Justices questioning regarding patent quality, eBay may bring us full circle - it will be very interesting to see if any dicta relating to patent quality and/or patent reform in general makes its way into the opinion.