Microsoft Wins Patent Case With “eBay” Argument

A Texas federal district judge recently denied Z4 Technologies Inc.’s request to enjoin Microsoft from selling, making and using its infringing Windows and Office products. The ruling appears to be the first case to apply the holding in eBay Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837 (2006).  The U.S. Supreme Court’s decision in eBay ended the presumption that an injunction should be issued almost automatically when a patent infringement is found. 

The Texas holding is especially relevant because Z4 was a legitimate competitor for Microsoft, not merely a troll seeking to unjustly enjoin a competitor. In fact, the case suggests that this relaxed application of the eBay holding could allow any defendant to avoid an injunction.

The Texas district judge applied the Supreme Court’s traditional four-factor test to conclude that Z4 would not suffer irreparable harm without the permanent injunction sought. More specifically, the Texas court found that the infringing software is only used in a part of the Microsoft program that is unlikely to influence a consumer’s purchase decision. Furthermore, the Texas court concluded that an injunction would cause disproportionate harm to Microsoft based on its wide application of the software in its popular products.

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