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changes in the parties bargaining positions, and the resulting changes in economic circumstances,
               resulting from the determination of liability..."  fn 28   Accordingly, the courts have concluded that a
               reasonable royalty determined in a hypothetical negotiation — pre-infringement verdict — likely would
               be inappropriate as the basis of a post-trial compulsory license, either under an injunction or not.

               The issue of post-infringement, or future, damages was brought to the forefront by the Supreme Court’s
               decision in eBay. Although the issue of whether a permanent injunction will be entered is a legal
               question for the court, the quantification of a royalty if an injunction is not awarded has now entered the
               domain of the damages expert. The following discussion describes the Supreme Court’s decision in
               eBay as practitioner general knowledge, but it also provides information about case decisions relating to
               the determination of future damages in those situations when an injunction was not entered, and the
               court asked for a damages determination.

               eBay  fn 29   relates to the availability and appropriateness of permanent injunctions as a remedy for patent
               infringement. Injunctive relief is an equitable remedy granted when monetary damages are not capable
               of compensating the plaintiff’s violation of rights and preventing injustice. After a finding of
               infringement, prior precedent suggested the imposition of a permanent injunction was all but a foregone
               conclusion. eBay established that patent holders are subject to the same four-part analysis that is
               applicable in every other context when permanent injunctive relief is sought as an equitable remedy, and
               eBay and its progeny have established a new burden for parties seeking a permanent injunction.

               The Court of Appeals for the Federal Circuit in eBay noted that there exists a "general rule that courts
               will issue permanent injunctions against patent infringement absent exceptional circumstances."  fn 30
               However, the Supreme Court in eBay rejected this general rule in favor of applying the same framework
               to the imposition of injunctive relief in patent infringement cases as is applied in all other cases.
               Established principles of equity require that a party seeking permanent injunctive relief satisfy a four-
               factor test demonstrating


                   a.  "that [the plaintiff] has suffered an irreparable injury;"

                   b.  "that remedies available at law, such as monetary damages, are inadequate to compensate for that
                       injury;"

                   c.  "that, considering the balance of hardships between the plaintiff and defendant, a remedy in
                       equity is warranted; and,"

                   d.  "that the public interest would not be disserved by a permanent injunction."  fn 31

               In eBay, Inc., the Supreme Court held that this paradigm applies "with equal force to disputes arising
               under the Patent Statute," thereby eliminating the general rule of issuing permanent injunctions. The
               Supreme Court held that the "decision whether to grant or deny injunctive relief rests within the
               equitable discretion of the district courts, and that such discretion must be exercised consistent with


        fn 28   Id.

        fn 29   ebay, 547 U.S. at 388.

        fn 30   MercExchange, LLC v. eBay, Inc., 401 F.3d 1323 (Fed. Cir. 2005).

        fn 31   ebay, 547 U.S. at 388.


        114                      © 2020, Association of International Certified Professional Accountants
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