Anyone who has ever read the legal description of their property ("A tract of land at a point which bears North 87 o 34' West, 475.0 feet and North 1 o 11' East ..."), knows that this can be little more than gibberish to someone who isn't practiced in the art of surveying or land records. But these legal descriptions of property are the precursor—and legal equivalent—of the claims in an issued patent. I was reminded of this recently when I had my property surveyed to make sure the new horse barn my wife wants to build is actually on our property.

Let's presume for a moment that I didn't do a survey, and that we ended up inadvertently building the barn partially on my neighbor's property. What if my neighbor didn't like it and sued me? If he won, would he be entitled to automatic "injunctive relief'-i.e., would I have to tear the barn down after the first ruling? Almost certainly not. The more likely scenario is that I would not have to tear down or move the offending portion of the barn until all appeals were exhausted (and we were exhausted by legal bills!) or we agreed on some sort of settlement.

What does this have to do with corporate dealmaking? As my friend the land-use attorney is fond of reminding me, the original basis for intellectual property was real property—land and other physical assets—and I received my surveyor's report a few days after the Supreme Court's unanimous decision in eBay vs. MercExchange on May 15. In the case, the court ruled that patent holders are not automatically entitled to injunctive relief.

With this decision, a collective sigh of relief went up in most large technology companies. Now—or so it might appear—the risk of having an established and profitable business shut down by a patent "troll" is reduced. At first blush, this would seem to bring intellectual property dispute resolution more in line with the logic of real property dispute resolution. While many IP litigators bemoaned this decision ("how can we get those IP thieves in big companies to come to the table if we don't have the leverage of injunctive relief?"), the reality is less clear and will likely take several years to play out.

First, the unintended consequence will likely be more forum shopping—get ready to spend even more time in patent-holder friendly dockets such as Marshall, TX or Alexandria, VA if you are asserting or defending patents. Second, the Supreme Court rejected the decision of the district court that the willingness of MercExchange to license its patents combined with its lack of actually practicing the patents in its own products (arguably the very definition of a patent troll) did not in itself provide sufficient grounds to deny injunctive relief. Thus, one of the previously untested tenets of the IP troll business model has actually been upheld by the highest court. Finally, this specific case is not over—the case was sent back to the appeals court in Alexandria to rule again whether MercExchange is entitled to a permanent injunction.

So will we end up with patent law that is more in line from a common sense perspective with real property law—where people are rarely required to destroy property until a dispute has fully run its course—or will we go back to a situation where a single claim in a single patent could potentially shut down a viable business while the matter is still being appealed? For now at least, the answer is a little like an un-surveyed property line: a bit fuzzy.—Jim Huston

Jim Houston is a Managing Director with Blueprint Ventures, an early stage technology venture capital firm which specializes in helping corporations monetize their IP via early stage corporate IP spinouts.

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