TW backs eBay on copyright

Conglom supports netco in court

Time Warner, a staunch advocate of tough copyright infringement penalties, has filed an amicus brief in a closely watched lawsuit in support of defendant eBay, the online auction house that is trying to avoid a tough patent infringement penalty.

The high-profile case will be argued today before the U.S. Supreme Court.

TW, which includes Net giant AOL, denies it is pursuing a double standard by supporting eBay, which was found guilty of infringing a patent with its use of a “Buy It Now” feature. But others aren’t so sure.

“It’s ironic that Time Warner took a very hard line against Grokster,” said Todd Dickinson, GE’s chief intellectual property counsel, referring to the peer-to-peer service accused of fostering online piracy that was the subject of a historic Supreme Court decision last summer. “Why do they think it’s OK to take a hard line on copyright yet somehow feel it’s OK to weaken or call into question one of the fundamental underpinnings of patent law?”

GE, parent company of NBC Universal, has filed an amicus brief in the eBay case in support of plaintiff MercExchange, which claims it is trying to uphold longstanding patent protections.

Case involves MercExchange’s claim that eBay’s use of an online buying service infringed on a patent MercExchange holds. A district court agreed but refused to impose an injunction blocking further use by eBay. MercExchange appealed to a federal court, which issued an injunction. The Supreme Court agreed late last year to grant eBay’s petition for review.

Case has the potential to affect every patent holder — including the many in the entertainment industry — given that the court will essentially determine whether granting an injunction is always necessary when a court concludes that infringement has occurred.

“It is hard to overstate the significance of this dispute,” said Alan Fisch, a patent attorney with the D.C. firm Kaye Scholer.

Proponents of injunctions say they represent the only way to protect patent holders’ rights; opponents say they are an extreme remedy, to be used judiciously.

“This case has whole industry groups at odds with one another,” Fisch added.

GE’s Dickinson — former commissioner of the U.S. Patent and Trademark Office — said protecting patent holders’ rights through injunctions “is a 100-year-old precedent. GE built its portfolio on the belief of what the law is.”

“You also don’t want to convey the idea to foreign countries that it’s okay to weaken patent law,” Dickinson added.

TW maintains it is only trying to ensure that penalties for patent infringement are applied equitably. “Time Warner is a company that cares deeply about intellectual property protection and also about fair remedies,” said Chuck Fish, TW’s chief patent counsel. “The way to ensure that remedies are fair is for courts to balance all the factors, whether in copyright, trademark or any other cases. In our view, balancing less than all of the factors, only in patent cases, is unfair. At the end of the day, all forms of intellectual property are important to innovative companies like Warner Bros., AOL and GE.”

Injunctions, the strongest remedy available, should be applied only when other remedies — such as cash settlements — can’t be reached, TW argued in its amicus brief.

“If presented in the copyright context, that would mean that (illegal) music downloaders would only need to send in the 99¢ per song after being caught,” one legal expert following the case said. Large companies, especially those with Internet interests, are being attacked with patent lawsuits, according to Jason Schultz, staff attorney with Electronic Frontier Foundation, which has also filed a brief supporting eBay. (The EFF also supported Grokster.) “When they’re victims of overbearing IP law, media companies are willing to question whether absolute protection is really necessary,” Schultz said.