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The Supreme Court unanimously held 5/15/06 that, for purposes of evaluating permanent injunctions in patent disputes, federal courts must apply the "traditional four-factor framework that governs the award of injunctive relief." To satisfy that test, a plaintiff must demonstrate: (1) that it has suffered an irreparable injury, (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships, a remedy in equity is warranted, and (4) that the public interest would not be disserved by a permanent injunction. The Federal Circuit had applied a "unique" rule favoring "permanent injunctions against patent infringement absent exceptional circumstances," in order to protect the statutory right to exclude others from making use of an invention. The Supreme Court reversed, explaining that "the Patent Act expressly provides that injunctions ‘may’ issue ‘in accordance with the principles of equity.’” The Court concluded that the Federal Circuit's "categorical grant" of injunctive relief cannot be squared with the language of the Patent Act explicitly adopting the traditional principles of equity. The Court analogized cases under the Patent Act to those arising under the Copyright Act, noting that "this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed." This decision is significant to any business that holds a patent or is involved in patent litigation.

Decision Below: 401 F.3d 1323 (Fed. Cir. 2005)