Presumption of Injunction: How the RESTORE Act Aims to Re-Empower Patent Holders

by Dennis Crouch

For the vast majority of American history, a judgment of patent infringement (by a court sitting in equity) led almost directly to injunctive relief barring ongoing infringement.  This construct was flipped by the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), a case which served as the first major step of weakening patentee rights over the past two decades.  Now, a new bipartisan bill aims to restore the pre-eBay status quo. The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2024, introduced by Senators Coons (D-Del.) and Cotton (R-Ark.), with a House companion bill from Representatives Moran (R-Texas) and Dean (D-Pa.), seeks to reshape and repair the availability of injunctive relief for patent holders.  As you’ll see, one nice element of the Bill is that it simply adds 1 sentence – creating a rebuttable presumption that an adjudged infringer should be subject to injunctive relief.

• RESTORE ACT one page explainer
• RESTORE ACT bill text

In the 19th and early 20th Century, patentees would file their suit “in equity” in order to achieve injunctive relief, requirement of case-by-case separation was largely eliminated in Federal Courts with the adoption of Federal Rules of Civil Procedure in 1938, which gave courts a combined jurisdiction over matters of law and equity. Throughout this time, courts with rare exception, granted permanent injunctions as an almost automatic remedy following an infringement judgment.

The legal basis for injunctive relief in patent cases is found in 35 U.S.C. § 283, which states:

[A Court] may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.

I have highlighted key terms from the statute that served as the focus in eBay, with the Supreme Court noting first that term “may” — rather than “shall” — indicates that there are times when courts may choose not to award relief and that the decision to grant or deny relief is an act of equitable discretion.  Next, the Court focused on the requirement that the injunction decision be “in accordance with the principles of equity.” On this second point, the Court concluded that the judiciary had been acting in a patent exceptionalist manner by awarding relief presumptively and almost automatically. On the other hand, according to the Court, the general principles of equity require a detailed analysis of for principles. Whether:

1. The plaintiff has suffered an irreparable injury;
2. Remedies available at law are inadequate to compensate for that injury;
3. Considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
4. The public interest would not be disserved by a permanent injunction.

In addition, the Courts have now made clear that there is no presumption of injunctive relief, but rather it is a remedy whose justification must be proven by the patentee.  Following eBay, many injunction requests have been denied – a major shift — most notably these are typically denied if the patent holder is a non-practicing entity (NPE) and at times where the patented technology is a small component of a larger product.

The RESTORE Act aims to legislatively overturn aspects of eBay, although still leave open the opportunity for adjudged infringers to show that injunctive relief is not warranted.  In particular, the proposal would create a rebuttable presumption that a permanent injunction is proper:

If … the court enters a final judgment finding infringement of a right secured by patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct.

Restore Act, Section 3. This language would be added to Section 283.

Supporters of the RESTORE Act point to the U.S. Constitutional provision stating that inventors should receive “exclusive Right to their … Discoveries.”  They argue that eBay‘s elimination of the presumption of injunctive relief for patent infringement significantly undermined the exclusivity that forms the core of patent rights. The bill’s enumerated whereas findings emphasize that this change has “substantially reduced the ability of patent owners to obtain injunctions to stop continuing or willful infringement of patents.” eBay is now built into the system with most patentees no longer even requesting permanent relief. They also argue that this has created an environment where large, multinational companies are incentivized to engage in “predatory infringement,” finding it cheaper to infringe patents than to license them, especially when the patent holders are “undercapitalized entities” such as individual, universities, or start-ups.  Ultimately, they see the bill as crucial to maintaining the United States’ “world’s gold-standard patent system” and its position as the “undisputed world leader in innovation.”

The explainer from Sen. Coons cites to a forthcoming historical analysis by GWU Professor Adam Mossoff that provides empirical evidence challenging the historical claims made in the eBay v. MercExchange decision.  Adam Mossoff, Injunctions for Patent Infringement: Historical Equity Practice Between 1790 – 1882, ___ Harvard J. of Law & Tech. (2025).   Mossoff’s study, which analyzed 899 patent cases in equity from 1790 to 1882, found that there was no historical precedent of relying upon eBay’s “historic” four-factor test when issuing injunctions in patent cases. Mossoff could not find a single case which applied such a test. The study found that courts granted injunctions in 91% of cases where infringement of a valid patent was established.

I see the first two factors of eBay as the most powerful today. In the 19th century though, the issue of adequate remedy at law was a jurisdictional question associated with courts sitting in equity.  However, at the time, it appears that courts always permitted patentees to file in equity – presuming that jurisdictional hurdle was met based upon allegations of patent infringement and a request for injunctive relief.

There are obviously many large companies (especially in the tech area) benefiting from eBay by avoiding opportunistic “holdup” and “holdouts.”  Some of you may remember the pre-eBay situation involving BlackBerry, NTP v. RIMM. In that case, the NPE patentee was able to reach a $600+ million settlement agreement with RIMM that many saw as a holdup cost to prevent a shutdown of the then-leading device provider.  In his article, for example, patent remedies expert Professor Thomas Cotter argues that the law of patent remedies should take efforts to avoid enabling these holdups.

Although the Bill’s simplicity and bipartisan nature pushes one way, the strong opposition makes passage unlikely in this major election year.

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Although a preliminary injunction decision, the recent opinion by Judge Godbey in VidStream LLC v. Twitter, Inc., illustrates challenges patent holders face in obtaining injunctive relief post-eBay. 16-cv-00764-N (N.D. Tex. JUne 22, 2024). The court denied VidStream’s motion for a preliminary injunction, emphasizing that as a non-practicing entity, VidStream failed to demonstrate irreparable harm – a key factor in the four-part test established by eBay. The court rejected VidStream’s argument that ongoing infringement automatically constitutes irreparable harm without a showing that VidStream was interested in something more than monetary damages or that Twitter would be unable to pay.   RESTORE Act would not impact this case – because it applies only to injunctions following final judgment of infringement.  But, it still begs the question as to whether this is the type of case where injunctive relief should be awarded.