UNENJOINED INFRINGEMENT AND COMPULSORY LICENSING.

After the U.S. Supreme Court's 2006 decision in eBay v. MercExchange, federal courts have denied a substantial number of requests for permanent injunctions following a finding of patent infringement. Without an injunction, an infringing party may continue to practice the infringed patent, typically subject to the payment of a court-approved ongoing royalty. Courts and scholars have debated whether unenjoined infringement and the payment of an ongoing royalty therewith constitutes a judicial compulsory license or something else. To assess how courts view unenjoined infringement, we identified seventy-seven post-eBay cases in which patent infringement was found, but a permanent injunction was denied. In each case, we analyzed the language used by the court in establishing the right of the infringer to continue to operate under the infringed patent(s) and its obligation to compensate the patent holder. This language, as well as the surrounding transactional and litigation context, indicates that at least some federal district courts have been granting compulsory patent licenses upon the denial of permanent injunctions, both tacitly and expressly. Moreover, the Federal Circuit has agreed with this characterization in at least some cases. To remove any lingering uncertainty, we recommend that the Federal Circuit acknowledge that a district court that declines to enjoin the infringement of a valid and enforceable patent, and concurrently orders the infringer to compensate the patent holder for acts of future unenjoined infringement, has authorized a compulsory license of the patent. Such an acknowledgment would better align the realities of unenjoined infringement with existing doctrines of patent exhaustion and transfer and encourage courts to focus greater attention on the non-royalty aspects of such licenses, which are currently missing key terms such as license scope, field of use, duration, and termination. It would also inform U.S. foreign policy regarding compulsory licensing by other countries. [ABSTRACT FROM AUTHOR]