eBay Says to Appeal Patent Infringement Ruling

By Reuters -  |  Posted 12-13-2007

Top online auctioneer eBay said on Wednesday it would appeal a U.S. court ruling in a patent dispute with MercExchange.

MercExchange, which holds several patents related to Internet-based auctions and markets, said earlier that a U.S. district court in Norfolk, Virginia, found on Tuesday that eBay had intentionally infringed its patents.

EBay said in a statement the court ruled against it on procedural grounds rather than on the merits of the case. Ebay asked the court to find that new technology it designed to avoid any patent infringement was effective and that there was no ongoing infringement of MercExchange's patent.

MercExchange said the amount of the judgment against eBay was about $30 million, including interest.

"We are disappointed with the court's order and we plan to appeal it," eBay said in a statement. "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."

Tuesday's ruling by Judge Jerome Friedman stems from a jury's 2003 verdict finding eBay and eBay subsidiary Half.com Inc liable for $35 million for intentionally infringing two MercExchange patents. The U.S. Court of Appeals for the Federal Circuit later reduced the award to $25.5 million.

Friedman in July denied eBay's request to stay proceedings on one of the patents, governing eBay's so-called "Buy It Now" feature that allows users to buy an item outright at a given price without bidding for it.

Friedman said in July the U.S. Supreme Court's 2006 ruling sending the case back to the trial court for further action had no bearing on the jury's 2003 verdict.

EBay previously set aside reserves to cover costs of the litigation and potential damages and it modified its Web site technology to avoid any infringement of one of the patents in the dispute, according to the company's latest quarterly financial filing with the U.S. Securities and Exchange Commission.