November 28, 2005, 12:00 AM

U.S. Supreme Court will review patent infringement ruling against eBay

The U.S. Supreme Court today said it will hear eBay’s appeal of an appellate court decision ordering the enforcement of a permanent injunction against the online auction giant’s “Buy It Now” feature and its fixed price business.

Paul Demery

Managing Editor, B2B E-commerce

The U.S. Supreme Court today said it will hear eBay’s appeal of an appellate court decision ordering the enforcement of a permanent injunction against the online auction giant’s “Buy It Now” feature and its fixed price business. The decision comes in a patent-infringement suit filed by a small Virginia-based company, MercExchange, against eBay.

“EBay is gratified that the Supreme Court has agreed to hear this important case,” the company said in a statement. “We have believed all along that MercExchange-which does not practice its own patents and only exists to sue others-should not be entitled to an injunction.”

Despite the high court’s decision to hear the appeal, MercExchange remains confident that it will prevail in the case, said Scott Robertson, the company’s lead attorney, in a statement.

“Today’s ruling does nothing that affects the validity or infringement of the patents in the suit,” Robertson said. “By admitting to the infringement in their Supreme Court petition, eBay abandoned any pretense of innocence. The bottom line is whether we will be able to obtain a permanent injunction on eBay’s buy-it now operations or whether the court will force a compulsory license.”

The appeals court in March upheld a U.S. District Court ruling that eBay’s Buy It Now feature infringed on a patent held by MercExchange, and also upheld the District court’s order that eBay was liable for damages of $25 million for violating the patent.

Later that month, the U.S. Patent Office “initially” revoked the patent claim by MercExchange on consignment auction technology, deeming it “obvious” or otherwise unpatentable.

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