Corporate America celebrated when the international agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) went into effect Jan. 1, 1995. Many companies believed TRIPS would go a long way toward protecting their IP rights overseas. Patent owners were especially happy with a provision that requires countries to grant patent injunctions when requested.
Many high-tech companies soon may wish that provision had never made it into the treaty. One such company will likely be eBay, which is asking the U.S. Supreme Court to overturn a century-old precedent that allows patent holders to almost always obtain injunctions against infringers.
Many companies in the online and IT industries argue that the Supreme Court needs to revise the 100-year-old rule of Continental Paper Bag in order to keep up with changes in patent law.
"In general patents are much more important to us than to the IT industry," says Nancy Linck, deputy general counsel for the Washington, D.C.-based Biotechnology Industry Organization. "In the pharmaceutical and biotech industries, the long time it takes to develop a product and the amount of risk involved in bringing a product to market mean that no one would do it without strong patent rights. No one."
TRIPS' possible effect on the eBay case has garnered relatively little attention. It is possible that the Court will issue its ruling without considering the effects of TRIPS. And that could spell danger for companies that want to protect their IP rights around the world.