|Tue Apr 20 2010 22:13:09|
Will eBay Wield Newly Granted Auction Patent?
By: Ina Steiner
Bloggers broke the news on Tuesday that the U.S. Patent Office granted eBay an auction patent, '540. But it was Tom Woolston of MercExchange who filed the patent application in 1999, the inventor with whom eBay fought a vicious battle for years, taking a patent dispute all the way to the Supreme Court in 2006. eBay finally acquired the patents and all related intellectual property from Woolston in 2008, ending the battle. It never disclosed the purchase price.
Bloggers are speculating that eBay might attempt to wield its newly granted patent against competing auction sites, a move that would be the ultimate irony given eBay's battle with Woolston.
Here are some reasons why auction sites may not have to worry:
1) eBay has yet to challenge competitors on any of its portfolio of auction and fixed-price patents, including '051, an auction patent granted to Woolston in 2001 and acquired by eBay in 2008.
2) When Meg Whitman was CEO, eBay lawyers and outside counsel were well fed, but her replacement John Donahoe, a management consultant from Bain, has been slashing budgets and staff. Does he really want to spend money to defend auction technology, when that's not his focus? eBay shut down its live-auction division and has been concentrating on its fixed-price business.
3) Donahoe's strategy relies on PayPal growth, not the eBay marketplaces business, and many of eBay's competitors accept PayPal as a payment method from shoppers (Overstock Auctions, eBid.net, Delcampe, Etsy, Alibris, Bonanzle,...). Also, given a democratic administration in Washington, he's unlikely to want attention drawn to activity that could possibly be construed as antitrust - eBay is already seen as monopolistic by some, and PayPal does not want to draw the attention of regulators.
eBay could demand auction sites license its patent technology. But because eBay dominates online auctions, it's hard to see much of a revenue stream from such a move.