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Woops, sorry, Blackberry!

Tags InterventionismMonopoly and Competition

I've recently bemoaned the damage done to RIM, the manufacturer of the Blackberry, by the US patent system. RIM eventually had to settle for over $600M with NTP, even though the patents it was accused of violating were being re-examined in the US Patent Office and might be overturned. Nevertheless, the very real threat of an injunction by the court that would have shut down RIM's business—even if only for a few months, until the patents might have been invalidated by the PTO—would have ruined RIM. So, it agreed to pay almost a billion dollars to some company that happened to hold a government-granted monopoly to some method of sending email—a method Blackberry probably did not even copy, but just happened to independently come up with (hmm, I wonder why—could it be that many patented ideas are obvious?).

Well now comes a U.S. Supreme Court decision, eBay v. MercExchange, issued May 15, 2006. The decision changes the general rule that a permanent injunction is generally awarded in cases of patent infringement; instead, now courts have to apply traditional four-factor test to see if the patentee deserves an injunciton. I.e., the injunction for patentees who prove patent infringement is not so automatic anymore. As a recent law firm's alert noted, "Unfortunately for RIM, the Court's decision came too late to avoid the necessity of having to settle with NTP after the district court had indicated in February 2006, that it was very likely to grant a permanent injunction against RIM."

Oh well, what's a billion dollars to a big, bad company like RIM? Just goes to demonstrate the problem with state-issued positive law, and the economic damage and uncertainty it foists on the economy and its participants.


Stephan Kinsella

Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom, and editor of Libertarian Papers.

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