The U.S. Supreme Court rarely hears patent cases, but you wouldn't know that from its current docket. It already has accepted four to review, and several others are under consideration.
That means the justices could take their most sweeping action in the area in 40 years. The result could significantly alter the intellectual-property landscape and create new winners and losers in the Knowledge Economy. "The court has not taken many major patent cases over the last 20 years," says Harold Wegner, a partner at Foley & Lardner. "Then all of a sudden you get an earthquake."
VEXED BY LOWER COURT. It's impossible to say why the court has decided to wade in so deeply. But intellectual property and disputes surrounding it have emerged as a central feature of the U.S. business landscape. Despite widespread calls to reform the patent system, efforts to do so in Congress have foundered -- partly because of broad divides within the business community about what to fix and how.
There has also been growing dissatisfaction with the U.S. Court of Appeals for the Federal Circuit, which hears all patent appeals. Created in 1982 to handle the surging number of complex patent cases, the court has consistently shown a lack of deference not only to the opinions of lower courts but also, critics say, to the Supreme Court. Of the four patent cases the high court has accepted so far, three could have far-reaching impact. Here's a snapshot:
eBay (EBAY) vs. MercExchange:
Perhaps one of the most important business cases on the docket this term. It confronts the question of whether a patent holder who wins an infringement lawsuit gets automatic entitlement to an injunction -- a court order directing the losing side to stop using the technology. That's the prospect eBay has faced since a jury found its "buy it now" feature infringed upon a patent belonging to MercExchange.
In another case that raises the same issue and is pending in a lower court, BlackBerry maker Research in Motion (RIMM) could see most of its business shut down.
Illinois Tool Works (ITW) vs. Independent Ink:
Patents translate into legal monopolies. But when can that monopoly be abused? That's the underlying issue in this David-vs.-Goliath battle that pits the maker of bar-code printers against a small seller of ink. Illinois Tool Works requires users of its patented printer technology to purchase its ink, an arrangement that Independent claims violates antitrust law. The court will decide whether the mere existence of a patent is proof of monopoly power.
Laboratory Corp. of America Holdings (LH) vs. Metabolite Laboratories:
Metabolite patented a blood test used to detect vitamin deficiencies. LabCorp says the patent improperly covers a basic scientific relationship, and doctors could infringe upon it merely by thinking about the relationship after reviewing a test result. A decision could place limits on the booming category of business-method patents, meaning patents on processes used to perform certain operations -- often manipulating data -- in areas such as electronic shopping, accounting, and finance. By Lorraine Woellert