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Virginia Company Asks Federal Judge to Order eBay to Stop Using 'Buy It Now' Feature

Associated Press
Published | Updated

NORFOLK, Va. – A small Virginia company in a patent fight with eBay Inc. asked a federal judge Tuesday to stop the online auction powerhouse from using its "Buy It Now" feature allowing shoppers to buy items at a fixed price.

A federal jury found in 2003 that eBay had infringed Great Falls-based MercExchange LLC's patent. But last year, the U.S. Supreme Court handed a victory to patent-reform advocates when it ruled that MercExchange was not automatically entitled to a court order blocking the offending service.

Now, U.S. District Court Judge Thomas Friedman must decide whether MercExchange is entitled to a permanent injunction. The judge did not say when he would rule.

Friedman also did not immediately rule on eBay's request to stay the proceedings until the federal patent office has completed a re-examination of the patent — a process that MercExchange's lawyers said could take 10 years.

Lawyers for San Jose-based eBay told the judge that the company has designed a workaround so that it no longer infringes on the patent and thus an injunction is unnecessary.

Attorney Jeff Randall also said MercExchange has not suffered irreparable harm and that the company is better off now than it was before the trial, citing an investment by a hedge fund.

MercExchange's attorneys, however, argued that the potential for future infringement is at stake.

"Without an injunction in the face of an infringing monopolist that now has 95 percent of the market, MercExchange cannot make productive use of its patent in any way," lawyer Seth Waxman said.

The eBay-MercExchange patent battle focuses on the online auctioneer's button for buying products at a fixed price, bypassing the bidding process, and MercExchange's claim that the technology infringes on its intellectual property.

The federal jury that sided with MercExchange awarded the company $35 million. The amount later was reduced to $25 million.

The Supreme Court's ruling does not affect the judgment against eBay.