eBay To Appeal Infringement Ruling

The decision regarding eBay’s use of the "Buy It Now" function on its auctions represents a setback since eBay’s earlier success in court this summer. MercExchange won a judgment this week that would have eBay pay about $30 million for infringing the patent related to Buy It Now.

However, eBay still faces the prospect of giving up a lot more money to MercExchange, which demanded eBay account for Buy It Now sales and the revenue those created. EBay announced it would continue fighting the case and appeal the District Court’s ruling:

"We are disappointed with the court’s order and we plan to appeal it. In its ruling, the court concluded that it did not have the legal right to consider the merits of our arguments concerning the ’265 patent, but rather was required to reject our motions based on the procedural posture of the case. We intend to appeal the Court’s ruling on the procedural issues and remain confident that after the appeal, the Court will consider our arguments on their merits.

"Additionally, our motion for summary judgment that our 2003 design-around was effective and there is no ongoing infringement of the ’265 patent, and that no further damages are due, also remains pending before the court."

Buy It Now will continue to be available on eBay. The company developed a work-around for the technology in 2005, following MercExchange’s opening lawsuit in 2003. Subsequent court decisions have knocked down proposed injunctions against eBay’s use of a Buy It Now function.

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eBay Evades ‘Buy it Now’ Injunction

However, eBay could still be on the hook for $25.5 million in damages.

They probably wouldn’t mind paying that sum, as the greater ramifications of the federal court’s decision could make eBay a winner on a broader scale.

A Reuters report on the case said the patent in question is now under review:

The judge stayed further proceedings on a second ecommerce-related patent until the U.S. Patent and Trademark Office has time to reexamine the validity of the patent granted to MercExchange. In effect, the court deferred to the judgment of the patent office to define the issue.

EBay said in a quarterly financial filing with the U.S. Securities and Exchange Commission on Friday that it modified how its Web sites work to try and ensure that they no longer make use of any potentially offending technology.

Patent reform advocates have long claimed the system rewards applicants with software patents for methods that are obvious and unoriginal.

A review of the earlier decision by the Supreme Court, which remanded the case back to the appellate level, showed the higher court believed MercExchange’s claims did not pass a four-factor test.

Such a test has been a long tradition in considering infringement.

It’s a determining factor in whether or not an injunction should be issued.

The one issued earlier by the appeals court against eBay’s use of ‘Buy it Now’ did not consider this test.