Senate Committee Considers Legislation to Strengthen Patent Infringement Relief
As the 118th Congress comes to an end, the United States Senate has continued to pay attention to the United States patent system.
On December 18, 2024, Senators Chris Coons (D-DE) and Senator Thom Tillis (R-NC), the chair and ranking member of the Senate Judiciary Committee’s Subcommittee on Intellectual Property, jointly held a hearing on the RESTORE Patent Rights Act (S. 4840 and H.R. 9221), legislation that seeks to overturn a Supreme Court decision that potentially restricts the ability of patent owners to obtain injunctive relief.
In eBay Inc. v. MercExchange, L.L.C., 547 US 388 (2006), the Supreme Court overturned the near-universal practice of granting permanent injunctions in successful patent infringement cases and in its place instituted a four-factor test to determine whether an injunction should issue against the patent infringer. Under the eBay test, courts are instructed to consider irreparable harm, adequacy of monetary damages, balance of hardships, and the public interest in deciding whether to issue a permanent injunction against a party found liable for infringement.
The legislation merely adds a single sentence to 35 U.S.C. § 285, the section of the patent statute outlining available relief to a successful patent owner. The legislation adds a new provision to Section 285 that reads:
(b) Rebuttable Presumption.—If, in a case under this title, the court enters a final judgment finding infringement of a right secured by patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct.
Members of the subcommittee heard testimony in support of the legislation from Jacob Babcock, CEO of NuCurrent and Professor Kristen Osenga of Richmond Law School and heard testimony opposing the legislation from Joshua Landua, representing the Computer & Communications Industry Association and Professor Jorge Contreras of the University of Utah. The proponents of the legislation argued that without a credible threat of a permanent injunction, there was little deterrent to infringement especially when the accused infringer is substantially larger than the patent owner. The opponents of the legislation argued that under the eBay test, operating companies remained well-positioned to obtain a permanent injunction with the main impact falling on non-practicing entities who, under the proposed legislation, would be in a position to extract excessive settlements by threatening to shut down production in light of patents for minor product features. The opponents of the legislation cited studies showing that courts rarely deny entry of a permanent injunction, although the studies do not address the reluctance of patent owners to request injunctive relief or the incentive to settle rather than incur further expense in an effort to obtain an uncertain permanent injunction.
When the new Congress convenes in January, Senator Tillis will assume the chair of the Subcommittee on Intellectual Property and is expected to continue to advance hearings on the RESTORE Patent Rights Act as well as other legislation affecting patent rights. We will continue to monitor the proposed legislation and provide updates as developments occur.
If you need assistance in navigating and determining how these legislative bills and Congressional action may impact your company, Buchanan’s experienced IP attorneys and Government Relations professionals are here to help. Please reach out to Michael Dever or Michael Strazzella with any questions.