Fracking Patents - Michigan Telecommunications and Technology ...

Spring 2013] Fracking Patents 327Potential defendants should be aware of these limitations before capitulatingto cease and desist demands.Until recently, a patent owner who established infringement could expectto obtain an injunction relatively automatically. That changed as a resultof the Supreme Court’s decision in eBay v. MercExchange. 320 In that caseinvolving a patent holding company’s assertion that eBay, an Internet auctionservice, should be enjoined from infringement, the Court emphasizedthe fact that injunctions are equitable remedies that can be applied onlywhen necessary to prevent irreparable harm and when legal remedies aredeemed inadequate. 321 That standard may be difficult to surmount when thealleged harm relates primarily to information disclosure. In the abstract,most parties making use of fracturing patents will not compete with the patentowners or damage the market for the products. A court would be verylikely to conclude that a royalty is the preferred remedy.Of course, a royalty fee can still be a significant disincentive to use. Thisis particularly the case when one factors in litigation costs. In these times oftight budgets, a university or public interest group may be disinclined to takethe risk of infringing a patent, and may be unable to prospectively enter intoa license. Absent additional limiting factors, a remedy at law can be a significantdeterrent that will constrain the information environment.D. Sovereign Immunity Opens Even Broader University PowersThe fact that damages will be the most likely result of litigation leads toone more important limitation on patent rights that could act as a savinggrace: sovereign immunity. This is a broad doctrine recognizing that governmentsare generally immune from lawsuits unless they waive immunity andagree to the jurisdiction of a court. 322 In the context of patents, state immunityfrom suit in federal court is the most important application of this doctrine.323 By statute, litigation arising under the Patent Act must take place infederal court. 324 States are immune from such actions as a result of the EleventhAmendment to the U.S. Constitution. The Eleventh Amendment, whichwas adopted to overrule a 1793 Supreme Court decision declaring that states320. eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006).321. Id. at 391–92.322. See Katherine Florey, Sovereign Immunity’s Penumbras: Common Law, “Accident,”and Policy in the Development of the Sovereign Immunity Doctrine, 43 WAKE FORESTL. REV. 765, 771–82 (2008) (providing an overview of the development of state, federal tribaland foreign sovereign immunity doctrine in the United States).323. Although the federal government has the right to invoke immunity from patent lawsuitsas well, this immunity is specifically waived by 28 U.S.C. § 1498 (2011).324. 28 U.S.C. § 1338 (2011); Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013).