Permanent injunction offers IP holders a timely and effective bar of third-party infringement and a recovery of right to common status . There is no doubt that IP should be protected; the question is whether current IP law protects too little or too much. Though involving exclusive rights, IP protection is no longer absolute, but limited in various aspects. Under the ceilings of IP protection, permanent injunction rules are changing.
The US courts once followed a “general rule” that permanent injunction was appropriate after a finding of infringement, as IP is“the right to exclude”and permanent injunction is the embodiment of exclusivity. This is laid out in U.S. Copyright Law §502 and U.S. Trademark Law §34. Recently, the principle of automatic application has changed. In eBay, Inc., v. MercExchange, LLC, the Supreme Court dismissed this “general rule”, holding that injunctions in patent cases, as in other cases, are appropriate only if various equitable factors are met. After eBay, permanent injunctions in patent cases will be granted based on the same four-factor test used in other contexts. In Germany, the right holder is usually granted an “Anspruch” to prevent infringement according to Article 97(1) Copyright Act, Article 139(1) Patent Act and Article 14(5) and (6) Trademark Act. However, this is not absolute. Under certain conditions, the court orders monetary compensation instead of permanent injunction considering factors like violation of the principle of good faith, significant imbalance in the parties' interests and damage to the public interest. Nations, WIPO and WTO take actions to limit permanent injunction and the exclusivity IP rights entail is curtailed.
In China, great changes have come to modern forms of IP infringement, to which traditional rules of permanent injunction have yet to adjust. The precedents Wuhan Jingyuan LLC v. Huayang Power LLC (2009) and Zhuhai Jingyi LLC v. Shenzhen Airport (2005) broke the principle of absolute and automatic application, with great impact on China’s IP law system. In judicial practice, the application of the rules of permanent injunction is changing from “absolute” to “flexible”; the judiciary has begun to take "public interest", "social welfare" and other factors as a basis to grant permanent injunctions. But China’s existing legislation is too weak to reflect the mentioned changes. Its lack of integrated and systematic regulations makes it unable to provide a legal basis for justice.
It is suggested that if permanent injunction would result in an imbalance of the interests of the parties or damages to public interest, the court should not grant it but apply monetary compensation instead. Meanwhile, to provide a legal basis for trials , the Supreme People's Court of China also should enact relevant judicial interpretations to clarify the operational specifications of the rules and resolve the current conflict between legislation and judicial practice, so as to achieve the aim of balancing the personal and pubic interest.
