New Developments In The eBay-MercExchange "Buy It Now" Lawsuit

[amy]

A related press release issued 1/27 by the Electronic Frontier Foundation who is siding with eBay in the Supreme Court argument:

The Electronic Frontier Foundation (EFF) filed a friend-of-the-court brief with the United States Supreme Court Thursday, asking justices to overturn a court ruling in a patent case with dangerous implications for free speech and consumers’ rights...

At issue is a case involving online auctioneer eBay and a company called MercExchange. Last year, the Federal Circuit Court of Appeals ruled that eBay violated MercExchange’s online auction patents and that eBay could be permanently enjoined, or prohibited, from using the patented technology. But as part of the ruling, the court came to a perilous conclusion, holding that patentees who prove their case have a right to permanent injunctions under all but "exceptional circumstances," like a major public health crisis. This radical rule created an "automatic injunction" standard that ignored the traditional balancing and discretion used by judges to consider how such a decision might affect other public interests--including free speech online.

"As more and more people use software and Internet technology to express themselves online, the battle over software patents has grave implications for online speech," said EFF Staff Attorney Corynne McSherry. "Courts must work harder than ever to ensure that technologies like blogs, email, online video, and instant messaging remain free and available to the public."

full press release: http://webwire.com/ViewPressRel.asp?SESSIONID=&aId=8502

The full brief the EFF filed with the court is here: www.eff.org/legal/cases/ebay_v_mercexchange/eff_amicus_brief.pdf

[bargainbloodhound]

From Rosalind and The Auction Guild: "eBay=Convicted Thief"

ebaY has been convicted by a court of law for theft. In the polite parlance of white collar business crime, instead of stealing, it is called patent infringement. But theft is when one person knowingly and illegally takes something that does not belong to them, and that is what ebaY did, and for which they have been convicted, guilty as charged.

When Pierre Omyidar first opened AuctionWeb's site on 5 Sep 1995, he allegedly had spent a weekend thinking up the programming code that allowed the auctioning of items on his site. If we give him the benefit of the doubt, we can assume that he failed to do what any inventor of a commercial product should do, and that is check to see if anyone had invented, and patented, the idea first. If Pierre had checked, he would have seen an auction process patent filed in April 1995 by someone named Thomas Woolston, and his company MercExchange. In 1995, it was not as easy as it is today to do such a search, so we give Pierre the benefit of the doubt that he did not know (or care - he was working for General Magic at the time, and probably subject to an invention agreement with them for anything patentable) of the patents existence, but the success of AuctionWeb, which changed to the name ebaY in 1997, would make knowledge of such patents important to the company.

With the growth of ebaY, and the company going public, auction and trading sites started to sprout like mung beans at a vegetarian restaurant. Moves made by ebaY in 1999, adding advertising banners tied to search, interfering with the auction ads already paid for by sellers, along with fee increases, caused seller rebellions and gave birth to a movement called the Million Auction March. This movement moved 2 million listings to Yahoo Auctions, making it a possible contender of note (action on Yahoo's part soon destroyed this advantage). This along with other's wanting to cash in on what appeared to be a goldmine, might have been the impetus for ebaY to get serious about researching the status of patents and see what kind of control they could get on the industry. It was early in 2000 that ebaY contacted Mr Woolston to see if they could buy the several auction and instant buy patents he had invented and registered, some before AuctionWeb/ebaY's launch, and some since.

Negotiations quickly broke down, very unsurprising given ebaY's arrogant attitude, and ebaY dared Mr. Woolston to sue them...

full article: http://www.auctionguild.com/generic139.html

[mandy]

A related article:

The BlackBerry case may have captivated the staid world of patent law for now, but the tech industry is keeping a close watch on an upcoming Supreme Court case that could have an even broader impact.

Auction giant eBay and networking-systems developer MercExchange are scheduled to appear before the justices on March 29 to present arguments related to a long-running dispute. In 2003, a federal jury found eBay guilty of willfully infringing on two MercExchange patents related to its "Buy It Now" feature, which lets shoppers purchase items without participating in an auction, and ordered it to pay $25 million in damages.

The high court won't be dealing with the facts of the case. Instead, it will be addressing a broader question: Under what circumstances is it appropriate for a court to issue a permanent injunction--that is, a prohibition against using the patents in question--against an entity found guilty of patent infringement? ...

full article: http://news.com.com/Supreme+Court+faces+...45759.html

[bargainbloodhound]

Under what circumstances is it appropriate for a court to issue a permanent injunction--that is, a prohibition against using the patents in question--against an entity found guilty of patent infringement?

[mandy]

The federal government yesterday took a position against eBay Inc. in a patent dispute that threatens to shut down one of the online auction site's popular shopping features.

The Office of the Solicitor General said in a brief filed with the Supreme Court that eBay willfully infringed on patents held by Great Falls-based MercExchange LLC and should be enjoined from using its "Buy It Now" feature, which allows users to buy goods at fixed prices rather than compete in auctions. Goods sold using that system account for about a third of eBay's business.

EBay has been found guilty of willfully infringing two patents held by MercExchange...

full article: http://www.washingtonpost.com/wp-dyn/con...01918.html

[mandy]

Very good article on the eBay v. MercExchange case:

Later this month, the Supreme Court will hear this case to determine when a patentee should have a right to stop an infringer from making or selling unlicensed products once the patent has been found valid and infringed.  Because this issue is so fundamentally important to patent law, eBay v. MercExchange will likely be the most important patent case for the past decade.

As it stands, the Federal Circuit has a “usual rule” that once a plaintiff shows that a defendant infringes a valid patent, an injunction should issue.  According to the appellate court, the usual rule should be followed “absent special circumstances.”

In this case, a jury found that eBay infringed MercExchange’s patent, but the court refused to issue an injunction...

full article: http://patentlaw.typepad.com/patent/2006...cexch.html

[xppman]

In this case, a jury found that eBay infringed MercExchange’s patent, but the court refused to issue an injunction...

This is a no brainier.

The jury found that eBay infringed MercExchange’s patent.
Following the “usual rule”: an injunction should have been issued immediately.

If MercExchange don't want to license ebay to use their product.
ebay should (steel) another product or develop their own.

Just another example of ebay's true unethical and illegal behavior under the
direction of Meg Whitman and company. IMO

[amy]

EBAY INC. AND HALF.COM, INC.,
Petitioners,
v.
MERCEXCHANGE, L.L.C.,
Respondent.
___________
On Writ of Certiorari
to the United States Court of Appeals
for the Federal Circuit
___________
REPLY BRIEF

full Reply Brief filed with Supreme Court on 3/17: http://patentlaw.typepad.com/patent/eBay...eplyBr.pdf

In the reply, eBay essentially argues injunctive relief at least requires that the plaintiff suffer “irreparable injury [without] an adequate remedy at law,” and that MercExchange has no such injury.

At its base, eBay’s argument is that by licensing its patent, MercExchange has shown that it is willing to take money in exchange for allowing would-be infringement.  Consequently, MercExchange cannot now argue that monetary damages are “inadequate.”

full article: http://patentlaw.typepad.com/patent/2006...xch_1.html

[rose]

An eBay win will curtail product development by tech startups and the Open Source software community.  Who will want to spend time and money on development knowing that an eBay, IBM, or Microsoft can steal your idea with the court's blessing?

[accentnepal]

Huh???

These guys,  MercExchange, have a patent on: a database of items for sale, access to that database by registered users, with the ability to buy and sell on line.

Not specific code to do that --- the concept.

And a jury said that the idea was not obvious?


I dunnno --- seems obvious to me.