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Congressional Legislation to Facilitate Permanent Injunctions for U.S. Patent Holders Reintroduced with Bipartisan Support

27 Mar 2025


Proposed Amendment to Section 283 of Title 35 of the United States Code under the RESTORE Patent Rights Act of 2025.

On 25 February 2025, the Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2025 was reintroduced in the U.S. Senate. The RESTORE Act aims to make it easier for patent holders to secure permanent injunctions against infringers for valid patents in the U.S. District Courts.
 
In Singapore, China, Japan, South Korea, and Germany, permanent injunctions are nearly ‘automatic’ when a patent is found to be infringed and valid. In contrast, permanent injunctions are not automatically granted in the U.S. for the infringement of a valid patent. Pursuant to a 2006 U.S. Supreme Court case, eBay v. MercExchange, the U.S. patent law treats the question of permanent injunction in a patent infringement lawsuit the same as it would a request for a permanent injunction during the adjudication of a contractual dispute. E.g., the U.S. patent law does not require or even presume the imposition of a permanent injunction for infringement of a valid patent.
 
The eBay case held that a traditional four-factor test for permanent injunctions, employed in other areas of law, also applies to patent infringement disputes. The eBay four-factor test requires that, to receive permanent injunctive relief barring continued infringement of a valid patent, a patent owner must demonstrate by a preponderance of the evidence that:

  1. the patent holder has suffered an irreparable injury;

  2. monetary remedies are inadequate to compensate for the patent holder’s injury;

  3. considering the balance of hardships between the patent holder and the infringer, a permanent injunction remedy is warranted; and

  4. the public interest would not be disserved by a permanent injunction against the infringer.

 
The eBay case led to a steady decline in the granting of permanent injunctive relief for U.S. patents in the U.S. District Courts in which patent infringement lawsuits are filed. In the six years before the 2006 eBay decision, excluding default and consent judgments, there were 230 permanent injunctions granted. In the six years following the 2006 eBay decision, only 175 permanent injunctions were granted. This decrease has continued with just 80 permanent injunctions from 2008 to 2012 and only 36 permanent injunctions from 2018 to 2022.
 
Due to the difficulty in obtaining a permanent injunction for infringement of a valid patent in a U.S. District Court, many U.S. patent holders have historically sought ‘exclusion orders’ from the U.S. International Trade Commission (ITC). Upon a finding of infringement by a third-party product of a valid patent, the ITC is authorized to bar importation of that third-party product. The ITC’s exclusion order is often sought as a replacement for the elusive U.S. District Court permanent injunction. Although the ITC exclusion orders only bar importation of infringing products, these exclusion orders remain a powerful tool for intellectual property enforcement because many high-tech products are manufactured or assembled overseas before being imported for sale in the U.S. market.
 
The RESTORE Act is directed at making it easier to obtain a permanent injunction within the U.S. District Court. Under the eBay four-factor test, the burden of proof to justify the issuance of a permanent injunction in a patent infringement lawsuit falls on the patent owner. The Act proposes to amend Section 283 of Title 35 of the United States Code to shift the burden of proof for the eBay four-factor test from the patent holder to the infringer. The proposed language of the Act is a single sentence:
“(b) REBUTTABLE PRESUMPTION.—If, in a case under this title, the court enters a final judgment finding infringement of a right secured by patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct.”
 
This proposed change to the U.S. patent law would still not make the granting of a permanent injunction ‘automatic’ for an infringed valid patent. But the passage of the RESTORE Act would, in effect, bring U.S. patent law for permanent injunctions in infringement cases more in line with the patent law of other countries by making it easier for a patent holder to obtain a permanent injunction against an infringing party for a valid patent.
 
Through the amendment of the U.S. patent law, the RESTORE Act would require that an infringer collect and present evidence demonstrating, by a preponderance of evidence, that eBay’s four-factor test is NOT met. In particular, if the Act is passed, to avoid a permanent injunction, an infringer would need to demonstrate that:

  1. the patent holder has NOT suffered an irreparable injury;

  2. monetary remedies ARE adequate to compensate for the patent holder’s injury;

  3. considering the balance of hardships between the patent holder and the infringer, a permanent injunction remedy is NOT warranted; and

  4. the public interest WOULD BE disserved by a permanent injunction against the infringer.

 
Even if the RESTORE Act passes, it will still be relatively easy for an infringer to establish that monetary remedies are adequate to compensate the patent holder in many instances. Many multinational corporate families, for instance, maintain their patent title in the name of a holding (or ‘shell’) company that does not manufacture or sell any of the corporate family’s products. These holding companies typically manage their intellectual property through a network of agreements with affiliated companies within the corporate family as well as third-party entities outside their corporate family.
 
This network of agreements details the delivery of monetary payments in exchange for licenses to use specific intellectual property. The details of this network of agreements are subject to discovery in any U.S. District Court lawsuit. As a result, it is generally easy to establish that monetary damages are adequate to compensate a holding company for third-party use of its patent rights because the holding company exchanges licenses for monetary payments in the normal course of business.
 
Universities are typically in a similar position to holding companies in regard to the adequacy of monetary remedies. Most universities actively license their intellectual property in exchange for monetary compensation. Universities also do not manufacture or sell patented products. As such, universities will likewise have a difficult time arguing that monetary remedies are inadequate to compensate for infringement of their valid patents.
 
Smaller companies that actively manufacture or sell patented products may benefit the most from the shifted burden of proof if the RESTORE Act passes. These smaller companies have a simpler corporate structure in which the patent title is often held by the same company that develops and sells a patented product. As such, the value of injunctive relief for a smaller company’s gross margins and market growth model is more readily apparent.
 
It remains to be seen whether the RESTORE Act or the PERA legislation will advance during Trump’s second term. The RESTORE Act in the U.S. Senate and its companion bill in the U.S. House of Representatives both have bipartisan support. These legislative bodies are simultaneously considering other patent-related legislation such as the Patent Eligibility Restoration Act (PERA). The PERA legislation aims to revise patent eligibility standards under Title 35 U.S.C. Section 101 by eliminating judicially created exceptions and replacing them with express statutory exceptions. For more details, see our article from last month entitled “What Will Trump 2.0 Bring to U.S. Patent Practice, and How Will It Affect Patenting Strategies of International Companies, Including Those in Singapore?” available at www.drewnapier.com/Publications/What-Will-Trump-2-0-Bring-to-U-S-Patent-Practice.
 
Interestingly, the likely incoming Director of the U.S. PTO, John A. Squires, while serving as legal counsel for Goldman Sachs, submitted written testimony before the U.S. Congress in 2007 that specifically addressed the eBay case. Mr. Squires testified against the pre-eBay automatic injunction rule, stating:
“. . . because patent suits carry the risk of injunction, the delivery of financial services in the U.S. economy is all too easily put at risk. . . . In eBay v. MercExchange, we saw the automatic injunction rule create unacceptable operational risks to the financial system.”
His full written testimony to the U.S. Congress from 2007 is available at www.judiciary.senate.gov/imo/media/doc/squires_testimony_06_06_07.pdf. As of 10 March 2025, Trump’s nomination of Mr. Squires has been received in the Senate and referred to the Senate Judiciary Committee.
 
For free access to historical statistics on patent infringement injunction trends in the U.S. District Courts, see: (i) Gupta, et al., “Studying the Impact of eBay on Injunctive Relief in Patent Cases”, SSRN Electronic Journal, 10.2139/ssrn.2816701, 2016, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2816701; and (ii) “2024 MARCUM PATENT LITIGATION STUDY”, available at www.marcumllp.com/press-releases/us-district-courts-see-decline-in-patent-litigation-despite-rise-in-patents-granted. Statistics for ITC investigations are available at www.usitc.gov/intellectual_property/337_statistics.htm; details of active ITC exclusion orders are available at www.usitc.gov/intellectual_property/exclusion_orders.htm.
 

Disclaimer: This posting is not intended to constitute or to be relied upon as legal advice. You should consult legal counsel if you require legal advice regarding U.S. or Singapore patent enforcement practice.