Several Empirical Studies on Injunctions Post-eBay

Chris Seaman recently released a draft of his new paper, Permanent Injunctions in Patent Litigation After eBay: An Empirical Study. In the paper, he present the results of his empirical study of contested permanent injunction decisions in district courts for a 7½ year period following eBay (May 2006 to December 2013). This post follows up my previous posts on Seaman's WIPIP presentation and on Ryan Holte's paper assessing the effects of eBay. Kirti Gupta and Jay Kesan also just released their own study on eBay's impact.

Below is Seaman's write-up of his conclusions:

The data collected in the study reveal that while most prevailing patentees still obtain an injunction following eBay (72.5% overall grant rate), so-called patent assertion entities (PAEs) are almost never able to do so (16% grant rate). This finding remains robust even after controlling for the field of technology of the infringed patents and the district court that decided the case. Furthermore, non-practicing patentees rarely can establish the type of injury deemed “irreparable” after eBay, as district courts focus primarily on competition-related harms like loss of market share (80% of cases where the district court made an explicit finding regarding irreparable harm) and loss of goodwill or damage to the patentee’s brand or reputation (43% of such cases). Injunction rates also vary by technology—over 90% of winning patentees in pharmaceutical and biotechnology cases obtain injunctive relief, while only slightly more than half (53%) of software patent holders do so. In terms of particular factors, my study finds that competition between the litigants in a product market is positively correlated with injunctive relief, while PAE status and whether the patent covers only a “small component” of an infringing product (as mentioned in Justice Kennedy’s concurring opinion) are negatively correlated with an injunction. Other factors studied—including the patentee’s willingness to license the patent in suit, the claiming of a business method, and a finding of willful infringement—were not statistically significant. In addition, several characteristics of the infringed patents (such as the number of claims, number of citations to prior art, forward citations, and small entity status) were not correlated with injunction outcomes. In sum, my paper contends that eBay has ushered in a new era in patent remedies by creating a divided system for different categories of patent owners. Little has changed for practicing patentees who compete in a product market against an infringer. In contrast, PAEs are generally subject to a so-called liability rule because they rarely obtain an injunction at the trial court level. This dichotomy may have a negative impact on certain PAEs, such as startups that have not yet brought a product to market, by effectively eliminating their right to exclude others from practicing the patented technology. Moreover, the de facto bar against injunctive relief for PAEs appears to contradict the Supreme Court’s own statement in eBay that such a “categorical rule” is inappropriate in determining entitlement to equitable relief.