EcommerceBytes-NewsFlash, Number 1684 - December 13, 2007     3 of 3

eBay Formulating Appeals Strategy in MercExchange Patent Case

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eBay said it would appeal the District Court's ruling on Tuesday in the long-running MercExchange patent case. The court made a final judgement on damages awarded by a jury that requires eBay to pay $30 million to MercExchange, and it addressed other motions filed by both parties. However, when asked whether eBay would appeal the entire order and on what basis, eBay spokesperson Hani Durzy said the company has not yet formulated its entire strategy, and wouldn't reveal it in any case. It would appeal "at least the parts we think were wrong and decided incorrectly," he said.

In a statement issued on Wednesday, eBay said, "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." Asked for clarification, Durzy said it was the pervasive tone and thought that went throughout the order that prompted eBay to make that statement. Durzy referred specifically to the court's references to recent Supreme Court decisions, such as KSR Int'l Co. v. Teleflex Inc, and the USPSTO patent reexamination of MercExchange's patents.

In Tuesday's order and opinion, the Judge made it clear that the judgement of damages was final. "...it is eBay that is attempting to forestall payment on a judgement that has long since been finalized and can no longer be appealed."

The judge said the validity and infringement of the '265 patent was confirmed as final, citing the fact that eBay did not raise the issue in its petition for certiorari to the Supreme Court. He said, however, "it is true that this court has previously noted that KSR appears to have significantly reduced the likelihood that the '265 patent will enjoy continued validity" (referring to the KSR v Teleflex Supreme Court ruling).

MercExchange is appealing the judge's July ruling against its request for an injunction against eBay, and the District Court must still rule on MercExchange's motion for post-verdict accounting. Both parties disagree on whether eBay continues to infringe on MercExchange's '265 patent.

See yesterday's article, "eBay Must Fork over Damages in MercExchange Patent Case" (http://www.auctionbytes.com/cab/abn/y07/m12/i12/s00)


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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