patent infringement

eBay Inc. operates a popular Internet Web site that allows private sellers to list goods they wish to sell, either through an auction or at a fixed price. Petitioner Half.com, now a wholly owned subsidiary of eBay, operates a similar Web site. Respondent MercExchange, L.L.C., holds several patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. See U.S. Patent No. 5,845,265. MercExchange sought to license its patent to eBay and Half.com, as it had previously done with other companies, but the parties failed to reach an agreement. MercExchange subsequently filed a patent infringement suit against eBay and Half.com in the United States District Court for the Eastern District of Virginia. A jury found that MercExchange's patent was valid, that eBay and Half.com had infringed that patent, and that an award of damages was appropriate. eBay and Half.com continue to challenge the validity of MercExchange's patent in proceedings pending before the United States Patent and Trademark Office. Following the jury verdict, the District Court denied MercExchange's motion for permanent injunctive relief, 275 F. Supp. 2d 695 (2003). The Court of Appeals for the Federal Circuit reversed, applying its general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances, 401 F.3d 1323, 1339 (2005). The Supreme Court granted certiorari to determine the appropriateness of this general rule, 546 U.S. 1029 (2005).

In 1976, Universal City Studios, Inc., and Walt Disney Productions, owners of copyrights in motion pictures and other audiovisual works, commenced a copyright infringement action in the United States District Court for the Central District of California against Sony Corporation of America and related entities that manufacture and sell Betamax video tape recorders. The Betamax consists of a tuner that receives signals from the public airwaves, a recorder that places those signals on magnetic tape, and an adapter that converts the signals for playback on a television set. It includes a timer for unattended recording, a pause button to omit commercials, and a fast-forward control. Surveys of several hundred Betamax owners conducted by both parties in 1978 showed that the primary use for most owners was time-shifting, recording a program for single later viewing and then erasing it. Sony's survey indicated that over 80 percent of interviewees watched at least as much regular television as before owning a Betamax. Seven point three percent of use was to record sports events whose professional leagues had no objection to home recording, and representatives of religious and educational broadcasters also testified they had no objection. After a lengthy trial, the District Court in 1979 denied all relief to the respondents, finding that time-shifting was fair use, that Sony had no direct involvement with any infringing activity, and that the Betamax was a staple article of commerce capable of substantial noninfringing uses. The court noted Sony's instruction booklet warned that unauthorized recording of copyrighted material may violate copyright laws. The Ninth Circuit in 1981 reversed the District Court's judgment on the copyright claim, holding petitioners liable for contributory infringement without setting aside any findings of fact, and remanded for consideration of damages or a continuing royalty. The Supreme Court granted certiorari in 1982, ordered reargument in 1983, and issued its decision in January 1984.

Markman owns United States Reissue Patent No. 33,054 for his Inventory Control and Reporting System for Drycleaning Stores. The patent describes a system that can monitor and report the status, location, and movement of clothing in a dry-cleaning establishment. The Markman system consists of a keyboard and data processor to generate written records for each transaction, including a bar code readable by optical detectors operated by employees, who log the progress of clothing through the dry-cleaning process. Respondent Westview's product also includes a keyboard and processor, and it lists charges for the dry-cleaning services on bar-coded tickets that can be read by portable optical detectors. Markman brought an infringement suit against Westview and Althon Enterprises, an operator of dry-cleaning establishments using Westview’s products. Part of the dispute hinged upon the meaning of the word inventory, a term found in Markman’s independent claim 1, which states that Markman’s product can maintain an inventory total and detect and localize spurious additions to inventory. The case was tried before a jury, which heard, among others, a witness produced by Markman who testified about the meaning of the claim language. After the jury compared the patent to Westview’s device, it found an infringement of Markman’s independent claim 1 and dependent claim 10. The District Court for the Eastern District of Pennsylvania granted Westview’s deferred motion for judgment as a matter of law. One of its reasons was that the term inventory in Markman’s patent encompasses both cash inventory and the actual physical inventory of articles of clothing. The court directed a verdict on the ground that Westview’s device does not have the means to maintain an inventory total. Markman appealed to the United States Court of Appeals for the Federal Circuit, which affirmed the district court’s judgment. Markman sought review, and the Supreme Court granted certiorari.

Parklane Hosiery Company, Inc., and eleven of its officers and directors issued a proxy statement in connection with a merger between Parklane and another corporation. Leo Shore, a stockholder of Parklane, filed a class action on behalf of stockholders in the United States District Court for the Eastern District of New York against Parklane and the individual defendants. The complaint alleged that the proxy statement was false and misleading in violation of sections 14(a), 10(b), and 20(a) of the Securities Exchange Act of 1934 and related SEC rules. The complaint sought damages for the class, rescission of the merger, and recovery of costs. Before Shore’s action came to trial, the Securities and Exchange Commission filed a separate suit against the same defendants in the United States District Court for the Southern District of New York. The SEC complaint alleged that the proxy statement that had been issued by Parklane was materially false and misleading in essentially the same respects as those that had been alleged in the respondent's complaint. After a four-day trial, the District Court found that the proxy statement was materially false and misleading in the respects alleged, and entered a declaratory judgment to that effect. The court permanently enjoined the defendants from further violations of the securities laws and ordered them to offer rescission to shareholders who had tendered shares. The defendants did not appeal this judgment. Shore then moved for partial summary judgment in the Eastern District of New York action, asserting that the defendants were collaterally estopped from relitigating the issues resolved against them in the SEC action. The District Court denied the motion on the ground that application of collateral estoppel would deny the defendants their Seventh Amendment right to a jury trial. The Court of Appeals for the Second Circuit reversed, holding that a party who has had issues of fact determined against him after a full and fair opportunity to litigate in a nonjury trial is collaterally estopped from obtaining a subsequent jury trial of these same issues of fact. Because of an intercircuit conflict with the Fifth Circuit’s decision in Rachal v. Hill, the Supreme Court granted certiorari.

Respondent Myriad Genetics, Inc. discovered the precise location and sequence of the BRCA1 and BRCA2 genes. Mutations in these genes can dramatically increase an individual's risk of developing breast and ovarian cancer. Myriad obtained several patents after its discovery. These included U.S. Patent 5,747,282, U.S. Patent 5,693,473, and U.S. Patent 5,837,492. The average American woman has a 12- to 13-percent risk of developing breast cancer. For women with BRCA mutations the risk can range between 50 and 80 percent for breast cancer and between 20 and 50 percent for ovarian cancer. Myriad identified the exact location of the BRCA1 and BRCA2 genes on chromosomes 17 and 13. Chromosome 17 has approximately 80 million nucleotides and chromosome 13 has approximately 114 million nucleotides. Within those chromosomes the BRCA1 and BRCA2 genes are each about 80,000 nucleotides long. If just exons are counted the BRCA1 gene is only about 5,500 nucleotides long and the BRCA2 gene is about 10,200 nucleotides long. Claims 1, 2, 5, and 6 from the '282 patent are representative. Claim 1 asserts a patent on an isolated DNA coding for a BRCA1 polypeptide with the amino acid sequence set forth in SEQ ID NO:2. Claim 2 asserts a patent on the isolated DNA with the nucleotide sequence set forth in SEQ ID NO:1. SEQ ID NO:1 lists only the cDNA exons in the BRCA1 gene. Claims 5 and 6 assert patents on any isolated DNA having at least 15 nucleotides of the sequences in claims 1 and 2 respectively. After obtaining the patents Myriad sent letters asserting infringement to the University of Pennsylvania's Genetic Diagnostic Laboratory and to petitioner Dr. Harry Ostrer. Ostrer had been sending patient DNA samples to the laboratory for testing. The laboratory agreed to stop testing. Myriad filed patent infringement suits against other entities performing BRCA testing. Those suits resulted in settlements requiring the defendants to cease the allegedly infringing activity. Petitioner Ostrer along with medical patients advocacy groups and other doctors filed suit in the Southern District of New York. They sought a declaration that Myriad's patents are invalid under 35 U.S.C. §101. The district court denied Myriad's motion to dismiss for lack of standing. It granted summary judgment to petitioners on the composition claims concluding they covered products of nature. The Federal Circuit initially reversed. After this Court decided Mayo Collaborative Services v. Prometheus Laboratories Inc. the case was remanded. On remand the Federal Circuit affirmed in part and reversed in part holding both isolated DNA and cDNA patent eligible under §101 with each panel member writing separately on the rationale for isolated DNA. The Supreme Court granted certiorari.