TRIPs compliance a significant issue for injunctive relief reform
Changing the standard for injunctive relief in patent infringement lawsuits has been the hottest topic in US patent law for all of 2005. With the Patent Act of 2005, Congress is considering a legislative change to the standard and, with the granting of certiorari in Ebay v. MercExchange, the Supreme Court is now set to address the issue.
But how much change can be implemented considering the country’s obligations under TRIPs? The Agreement on Trade Related Aspects of Intellectual Property Rights is lurking in the background and stands to be an issue if any significant change is implemented (either by legislation or judicial decision).
Under TRIPs, the country is obligated to confer exclusive rights by patent and entitled to provide exceptions to those exclusive rights only in certain circumstances. Any change made to the injunctive relief standard must qualify under TRIPs and the Agreement provides an opportunity for challenging any change that is implemented.
The rest of this article includes background on TRIPs and the relevant provisions. A forthcoming article will examine the issue in greater depth.
Background
Article 28 of TRIPs provides:
A patent shall confer on its owner the following exclusive rights:
(a) where the subject matter of a patent is a product, to prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product;
(b) where the subject matter of a patent is a process, to prevent third parties not having the owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.
(emphasis added)
Article 30 provides for exceptions to the exclusive rights in some circumstances:
Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.
(emphasis added)
Any change to the injunctive relief standard in patent infringement cases must address the applicability of Article 30. The text of Article 30 has been officially interpreted. It is clear that any exception to the exclusive right conferred by patent must meet three requirements:
the exception must be limited;
the exception must not unreasonably conflict with the normal exploitation of the patent; AND
the exception must not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.
For an exception to survive Article 30 scrutiny, all three requirements must be met. At first blush, it appears that the second requirement presents the biggest hurdle for any proposed change to the injunctive relief standard. The issue becomes:
“does a different standard for awarding injunctive relief unreasonably conflict with a normal exploitation of the patent?”
I’ll provide more information on the analysis of this issue in a follow-up article in the next few days.
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