No. 05-130 In the Supreme Court of the United States EBAY INC. AND HALF.COM, INC., Petitioners, v. MERCEXCHANGE, L.L.C., Respondent. On Writ of Certiorari to the United States Court of Appeals for the Federal Circuit BRIEF OF REMBRANDT IP MANAGEMENT, LLC AS AMICUS CURIAE IN SUPPORT OF RESPONDENT LAWRENCE S. ROBBINS* ROY T. ENGLERT, JR. DANIEL WALFISH Robbins, Russell, Englert, Orseck & Untereiner LLP 1801 K Street, N.W. Suite 411 Washington, D.C. 20006 (202) 775-4500 * Counsel of Record i TABLE OF CONTENTS Page TABLE OF AUTHORITIES..................................................ii INTEREST OF THE AMICUS CURIAE ............................... 1 SUMMARY OF ARGUMENT.............................................. 2 ARGUMENT ......................................................................... 5 I. NON-PRACTICING ENTITIES PLAY A KEY ROLE IN A SYSTEM DESIGNED TO PROMOTE PROGRESS BY PROTECTING INVENTION.............................................................. 5 II. THE PURPOSES OF THE PATENT SYSTEM WOULD BE UNDERMINED IF COURTS DISCRIMINATED AGAINST PATENT- HOLDERS ON THE BASIS OF WHETHER THEY PRODUCE A PRODUCT ............................ 11 III. THE DISTRICT COURT, IN MAKING PATENT USE THE TOUCHSTONE OF THE EQUITABLE ANALYSIS, ABUSED ITS DISCRETION BECAUSE IT IGNORED PRECEDENTS OF THIS COURT THAT CONGRESS HAS INCORPORATED INTO THE INJUNCTION STATUTE............................... 18 IV. THE ATTACKS ON NON-PRACTICING ENTITIES LEVELED BY PETITIONERS AND THEIR AMICI ARE REALLY A CALL TO LEGISLATE ON ISSUES NOT PRESENTED BY THIS CASE ....................................................... 29 CONCLUSION .................................................................... 30 ii TABLE OF AUTHORITIES Page(s) Cases Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979) .........................................................................5 Bank of America Nat’l Trust & Savings Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434 (1999)..............15 Bob Jones Univ. v. United States, 461 U.S. 574 (1983) .................................................................22, 27 Brown v. Gardner, 513 U.S. 115 (1994)..............................21 Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908) ..................................passim Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24 (1923).................................19, 28 Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176 (1980) ................................................................25 Dep’t of the Interior v. Klamath Water Users Protective Ass’n, 532 U.S. 1 (2001).........................22 Faragher v. City of Boca Raton, 524 U.S. 775 (1998) ........21 FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) ..................................................21, 27 Granholm v. Heald, 125 S. Ct. 1885 (2005) ........................21 Hartford-Empire Co. v. United States, 323 U.S. 386 (1945) .......................................................................19 iii TABLE OF AUTHORITIES—continued Page(s) In re Mahurkar Double Lumen Hemodialysis Catheter Patent Litig., 831 F. Supp. 1354 (N.D. Ill. 1993).........................................................16 Keene Corp. v. United States, 508 U.S. 200 (1993) ............21 Lindahl v. Office of Pers. Mgmt., 470 U.S. 768 (1985) .......21 Lorillard v. Pons, 434 U.S. 575 (1978) ...............................21 Martin v. Franklin Capital Corp., 126 S. Ct. 704 (2005) .......................................................................18 Metro. Stevedore Co. v. Rambo, 515 U.S. 291 (1995).........21 Patterson v. McLean Credit Union, 491 U.S. 164 (1989) .................................................................21, 27 Pierce v. Underwood, 487 U.S. 552 (1988).........................21 Smith Int’l, Inc. v. Hughes Tool Co., 718 F.2d 1573 (Fed. Cir. 1983) ..................................................10, 12 Solid Waste Agency of N. Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) ..........21, 26 Special Equip. Co. v. Coe, 324 U.S. 370 (1945 .............19, 26 Woodbridge v. United States, 263 U.S. 50 (1923)...............19 Statutes and Other Legislative Materials 28 U.S.C. § 1498 ..................................................................17 35 U.S.C. § 283 ..............................................................19, 27 iv TABLE OF AUTHORITIES—continued Page(s) 35 U.S.C.A. § 283 (West 2006) ...........................................22 42 U.S.C. § 2183 ..................................................................17 7 U.S.C. § 2404 ....................................................................17 Act of Aug. 1, 1946, Pub. L. No. 79-587, ch. 726, 60 Stat. 778....................................................................22 Act of Dec. 12, 1980, Pub. L. No. 96-517, 94 Stat. 3015 (codified as amended at 35 U.S.C. §§ 200-211 (2005)).....................................................6 Act of Feb. 18, 1922, Pub. L. No. 67-147, ch. 58, 42 Stat. 389....................................................................22 Act of Mar. 3, 1897, ch. 391,29 Stat. 692 ............................19 Committee Print Regarding Patent Quality Improvement: Hearing Before the Subcomm. on Courts, the Internet, and Intell. Prop. of the H. Comm. on the Judiciary, 109th Cong. (2005) .......................................................................26 H.R. 10068, 75th Cong. (1938)............................................23 H.R. 15989, 63d Cong. (1914) .............................................23 H.R. 1700, 63d Cong. (1913) ...............................................23 H.R. 19188, 63d Cong. (1914) .............................................23 H.R. 23193, 62d Cong. (1912) .............................................23 H.R. 23417, 62d Cong. (1912) .............................................23 v TABLE OF AUTHORITIES—continued Page(s) H.R. 2795, 109th Cong. (2005)............................................27 H.R. 3054, 64th Cong. (1915)..............................................23 H.R. 3082, 64th Cong. (1915)..............................................23 H.R. 8776, 62d Cong. (1911) ...............................................23 H.R. 9259, 75th Cong. (1938)..............................................23 H.R. 9304, 81st Cong. (1950) ..............................................23 H.R. REP. NO. 62-1161 (1912) .............................................23 H.R. REP. NO. 62-1161, Pt. 2 (1913)....................................24 H.R. REP. NO. 63-1082 (1914) .............................................24 S. 1838, 67th Cong. (1921) ..................................................23 S. 203, 71st Cong. (1929).....................................................23 S. 2116, 62d Cong. (1911) ...................................................23 S. 22, 72d Cong. (1931) .......................................................23 S. 2491, 77th Cong. (1942) ..................................................23 S. 290, 73d Cong. (1933) .....................................................23 S. 3325, 67th Cong. (1922) ..................................................23 S. 3410, 67th Cong. (1922) ..................................................23 S. 3474, 69th Cong. (1926) ..................................................23 vi TABLE OF AUTHORITIES—continued Page(s) S. 383, 74th Cong. (1935) ....................................................23 S. 6273, 62d Cong. (1912) ...................................................23 S. 705, 70th Cong. (1927) ....................................................23 S. REP. NO. 82-1979 (1952), reprinted in 1952 U.S.C.C.A.N. 2394...................................................22 S. REP. NO. 84-1464 (1956)..................................................25 SUBCOMM. ON PATENTS, 85TH CONG., AN ECONOMIC REVIEW OF THE PATENT SYSTEM (Comm. Print 1958).........................................................................26 SUBCOMM. ON PATENTS, 85TH CONG., COMPULSORY LICENSING OF PATENTS—A LEGISLATIVE HISTORY (Comm. Print 1958) ................22, 23, 24, 25 SUBCOMM. ON PATENTS, PROPOSALS FOR IMPROVING THE PATENT SYSTEM, S. DOC. NO. 85-21 (1st Sess. 1957)................................................................25 SUBCOMM. ON PATENTS, THE PATENT SYSTEM AND THE MODERN ECONOMY, S. DOC. NO. 85-22 (1st Sess. 1957).........................................................26 TEMPORARY NAT’L ECON. COMM., FINAL REPORT AND RECOMMENDATION, S. DOC. NO. 77-35 (1st Sess. 1941) ........................................................25 Other Authorities A Market for Ideas, ECONOMIST, Oct. 22, 2005.....................6 vii TABLE OF AUTHORITIES—continued Page(s) Aley, James, Heads We Win, Tails We Win, FORTUNE, Mar. 3, 2003 ..............................................7 Barnett, Jonathan M., Private Protection of Patentable Goods, 25 CARDOZO L. REV. 1251 (2004) .......................................................................13 Boss-Bicak, Shira, Moving Ideas off Campus, N.Y. TIMES, Oct. 28, 2004 ..................................................6 Calabresi, Guido & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089 (1972) .......................................................................14 Clark, Don, Inventors See Promise in Large-Scale Public Patent Auctions, WALL ST. J., March 9, 2006......................................................................9, 12 Cohn, Meredith, Big Ideas, Long Odds, BALT. SUN, Oct. 29, 2004 ..............................................................6