May 16, 2006, 12:00 AM

High court allows eBay to use “Buy It Now” pending a lower court review

The U.S. Supreme Court has ruled that a lower court did not have to issue a permanent injunction forcing eBay Inc. to stop using its Buy It Now feature. The decision comes in a patent-infringement suit filed by MercExchange.

The U.S. Supreme Court has ruled that a lower court did not necessarily have to issue a permanent injunction forcing eBay Inc. to stop using its Buy It Now feature and operating a fixed-price business. The decision comes in a patent-infringement suit filed by a small Virginia-based company, MercExchange, against eBay. The high court sent the case back to the district court for review.

EBay on Monday issued a statement applauding the Supreme Court ruling. EBay had argued that trial judges ought to have the discretion-granted by Congress-to award money damages to patent owners, instead of injunctions.

An appellate court in March 2005 had upheld the district court’s order that eBay was liable for $25 million in damages for violating a patent held by MercExchange. MercExchange, however, sought an injunction.

“We are extremely gratified by the Supreme Court’s unanimous decision,” Jay Monahan, eBay’s Deputy General Counsel of intellectual property, said in a statement. “The trial judge originally found in this case that money was sufficient, and denied an injunction. We are confident that when the district court revisits this issue, particularly in light of the ongoing re-examination of the patents, the results will be the same.”

MercExchange also said it was pleased with the Supreme Court’s order that the district court reconsider MercExchange’s request for an injunction to force eBay to stop from infringing on its valid patent. “We are confident that the district court, when it fairly applies the traditional principles of equity set forth in the Supreme Court’s opinion, will grant the injunctive relief to which MercExchange is entitled,” MercExchange said in a statement.

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