EcommerceBytes-NewsFlash, Number 587 - August 07, 2003     1 of 3

Judge Rules on Post-Trial Motions in eBay Patent Lawsuit

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A judge denied eBay's motion for a new trial in the MercExchange patent lawsuit and ruled eBay must pay MercExchange $29.5 million in damages for patent infringement. A jury originally awarded damages of $35 million, using GMS (Gross Merchandise Sales) as the base in computing the royalty.

The court agreed with eBay's argument that the jury's awarding of $5.5 million in damages for ReturnBuy's infringement was double-counting, since ReturnBuy sold merchandise on eBay and would be counted in the GMS used as a basis for damages.

In his ruling, Judge Friedman said the trial was "one of the more, if not the most, contentious cases that this court has ever presided over." He used that as one of the factors in deciding to deny MercExchange's motion for Entry of a Permanent Injunction Order (to prevent eBay from further infringing on its patents). "If the court did enjoin the defendants here, the court would essentially be opening a Pandora's box of new problems," predicting the battle would continue to be as contentious as ever.

However, the judge said if eBay continues to infringe MercExchange's patents, "the court will be more inclined to award enhanced damages for any post-verdict infringement." This would be relevant if either side appealed the ruling.

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

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