EcommerceBytes-NewsFlash, Number 1737 - February 28, 2008     0 of 6

eBay v MercExchange Patent War: It's Over

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After years of battling auction giant eBay in the courts, MercExchange has finally found closure. eBay announced it has acquired three MercExchange patents that have been at the heart of a grueling legal war between the two firms. According to a release issued by eBay about the settlement on Thursday afternoon, it also acquired some additional related technology and inventions and a license to another search-related patent portfolio that was not asserted in the lawsuit. eBay declined to disclose how much it had paid for the patents and technology.

Despite a jury ruling in 2003 that eBay willfully infringed the patent, the District Court judge refused to grant an injunction, and appeals sent the case all the way to the Supreme Court in 2006.

eBay CEO Meg Whitman led the company when it first allegedly negotiated with MercExchange for the patents and during the subsequent patent litigation. Whitman announced in January that she was stepping down on March 31, 2008. Former Bain & Co. colleague John Donahoe, who has headed the company's marketplaces business since 2005, is replacing Whitman as President and CEO.

Under Whitman's leadership, eBay had refused to settle with MercExchange even after it lost the lawsuit and despite MercExchange's willingness to sell the patents. In 2003, MercExchange founder Tom Woolston told the press the patents were on the block and said he "always thought the eBay community was the natural home for the patents."

After being rebuffed, MercExchange allied itself with auction site uBid, but eBay's delaying tactics and a refusal by the District Court judge to grant an injunction that would prevent eBay from using the technology seemed to dim hopes of a successful resolution for the patent holder.

Now that it owns the auction patents, it remains to be seen whether eBay will itself wield them against its competitors.

eBay Patent Wars Timeline http://www.auctionbytes.com/cab/pages/patent


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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