U.S. Supreme Court Rejects Presumption Favoring Patent Infringement Injunction

The Federal Circuit, which is often the court of last resort in patent disputes because the U.S. Supreme Court accepts so few cases for review, has developed a line of authority under which plaintiffs who establish patent validity and infringement enjoyed a presumption in favor of injunctive relief “absent exceptional circumstances.”

However, in eBay Inc. v. MercExchange, L.L.C., No. 05-130 (May 15, 2006), the U.S. Supreme Court held that the four-factor test traditionally applied by courts of equity in deciding whether or not to grant injunctive relief applied equally to disputes arising under the Patent Act.

Regardless of the fact that a case involves alleged patent infringement, a district court should not issue an injunction unless it finds (1) that plaintiff has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

State Taxpayers Lack Standing To Challenge State Tax Or Spending Decisions

The U.S. Supreme Court historically has restricted the standing of plaintiffs suing the federal government to invoke Article III “case or controversy” jurisdiction merely based on their status as taxpayers.

In DaimlerChrysler Corp. v. Cuno, No. 04-1704 (May 15, 2006), the Court extended that jurisprudence to cases involving state taxpayers suing state governments to challenge state tax or spending decisions.

Moreover, while the Court has permitted municipal residents to sue municipalities to challenge the illegal use of public funds by the municipal corporation, the Court held that such precedents did not confer standing on municipal residents to challenge state tax or spending decisions.

U.S. Supreme Court Curtails Probate Exception To Federal Jurisdiction

As reported in January 2005, the Ninth Circuit held in In re Marshall, 392 F.3d 1118 (9th Cir. Dec. 30, 2004), that the probate exception to federal jurisdiction applied in Bankruptcy Court. However, the Supreme Court has now reversed that decision as extending the probate exception too broadly.

The Ninth Circuit read the probate exception to exclude from federal jurisdiction “not only direct challenges to a will or trust, but also questions which would ordinarily be decided by a probate court in determining the validity of the decedent’s estate planning instrument.” The court also held that a State’s vesting of exclusive jurisdiction over probate matters in a special court (in this case the Texas Probate Court) strips federal courts of jurisdiction to entertain any “probate related matter,” including claims respecting “tax liability, debt, gift, [or] tort.”

However, the Supreme Court found that this broad reading lacked any basis in statute or Supreme Court precedent. Marshall v. Marshall, No. 04-1544 (U.S. May 1, 2006).

Clarifying its juris­prudence in this area, the Court said the probate exception only reserves to state probate courts the probate or annulment of a will and the administration of a decedent’s estate, and precludes federal courts from disposing of property that is in the custody of a state probate court. The probate exception does not bar federal courts from adjudicating matters outside those confines that otherwise are within federal jurisdiction.