For all you eBay haters


In the world of patent disputes, the recently settled tiff between patent holding company NTP and Research In Motion, makers of the popular BlackBerry has dominated the scene for the past year or so. At the same time that battle was being played out, another case of infringement was wending its way through the federal court system. This one involves eBay and a company called MercExchange LLC, which says eBay's popular "Buy It Now" auction feature violates patents held by MercExchange.

The Office of the Solicitor General of the United States has filed a brief with the Supreme Court, taking the side of MercExchange. In it, the Solicitor General's Office argues that eBay should be barred from using Buy It Now due to the decision of two lower courts that upheld MercExchange's patents.

In 1995, MercExchange founder Tom Woolston filed three patent applications with the US Patent and Trademark Office covering online auctions and shopping, including a direct-buy patent that allowed shoppers to purchase an auction item at a fixed price. Later that same year, eBay started its own online auction service, which has since grown into the juggernaut it is today. The USPTO approved all three of Woolston's patents in 2000 and 2001, and at one point in time, Woolston and eBay had engaged in negotiations over the auction site's licensing the patents. Those negotiations broke down and Woolston subsequently filed suit against eBay, alleging patent infringement.

In 2003, a US District Court ruled that Buy It Now violated MercExchange's "direct buy" patent, but threw out the company's patent for the online auction process on the grounds that it wasn't sufficiently documented. Last year, the US Court of Appeals upheld the direct buy patent and the lower court's US$25 million award, and found that eBay had willfully infringed on the patent. In addition, the court recommended that an injunction be issued against the Buy It Now feature until eBay came up a noninfringing workaround or licensed the patent.

EBay filed an appeal with the Supreme Court, which will hear oral arguments later this month. In its filing with the Supreme Court, eBay argued that infringements should not automatically result in injunctions and shutdowns. The company also pointed out that MercExchange has not been in the online auction business since 2000, so eBay's use of Buy It Now was not sufficient to merit an injunction.

It appears that MercExchange has decided that licensing its patent could prove to be more lucrative than actually operating a business that utilizes it. MercExchange freely admits to having gotten out of the auction business itself, but says it currently licenses the patent to other companies. As we are all aware, patents can mean big money. RIM came close to settling its case against NTP for US$450 million in 2005, but got cold feet and was eventually on the hook for US$612.5 million. That's a nice revenue stream for piece of intellectual property, and it looks like MercExchange is hoping to cash in on eBay's popularity to obtain a similar windfall.

Aside from the obvious question of how and what kind of patents are issued—a topic that has been the cause of much litigation and endless discussion—comes the question of how to deal with infringement. Should companies that demonstrate infringement be granted automatic injunctions? Patent holding companies and small firms like Eolas and MercExchange would argue that when large companies infringe their patents, it deprives them of deserved revenue. On the other side of the aisle are the likes of eBay and RIM, which say that enforcing the patents and quickly granting injunctions would cause untold financial damages and hamper their operations. Until the US government decides to fix the patent process, companies will continue fighting high-stakes battles over patents and injunctions with often expensive results.

GO MercExchange!

Even if you hate eBay you have to see the lunacy that is the software patent scene right now.  Most of this stuff is just so damn obvious and can be done so many different ways that it is pretty much ridiculous to even honor patents on the stuff.

Ebay does indeed suck smelly goat dick, but this software patent stuff is ridiculous bullshit.

Quoted: Most of this stuff is just so damn obvious and can be done so many different ways that it is pretty much ridiculous to even honor patents on the stuff.

If it is so obvious, you should start patenting things.

Patents are the only way to protect IP.

I have a solution for large companies that are saying "having injunctions, etc are halting my operations and reducing my revenue."  

STOP INFRINGING ON PATENTS!  Don't infringe, and you won't have an injunction.  Sheesh...why's that so hard to understand?


Now, I'm not exactly sure how this patent works.  If it's over the wording  "buy it now."  Then why not just change the wording into

"Bid" and "buy"

If it's over the fact that ebay has the button that let's your purchase a product instantly without bidding, then that's BS.  It's not copying the software, it's just a good idea.  

Winning that law suit is like trying to patent common sense.  Hell, I could patent the idea of not driving off of cliffs, and then make everyone who avoids driving off cliffs pay me a royalty.  Same frigging thing.

Quoted: STOP INFRINGING ON PATENTS!  Don't infringe, and you won't have an injunction.  Sheesh...why's that so hard to understand?

No shit. How long does it take to do a patent search? What do they pay their legal team for anyhow?

Quoted: I have a solution for large companies that are saying "having injunctions, etc are halting my operations and reducing my revenue."   STOP INFRINGING ON PATENTS!  Don't infringe, and you won't have an injunction.  Sheesh...why's that so hard to understand?

It's like saying "Oh I patented this idea to have a website where people can post messages about guns" and then shutting down ARFCOM.

If they want to patent an algorithm, that's one thing, but these ideas are very broad and vague usually.

Quoted: Quoted: STOP INFRINGING ON PATENTS!  Don't infringe, and you won't have an injunction.  Sheesh...why's that so hard to understand? No shit. How long does it take to do a patent search? What do they pay their legal team for anyhow?

Most of these patents like this and amazon's "one click" buying are complete and utter bullshit, only issued because the people who approved the patents must have been idiots.

Ebay was ok before buy in now.

Quoted: It's like saying "Oh I patented this idea to have a website where people can post messages about guns" and then shutting down ARFCOM.

An idea must be novel; you can't just patent anything. The US Patent Office spends a great deal of time investigating the originality of applications.

Quoted: Quoted: It's like saying "Oh I patented this idea to have a website where people can post messages about guns" and then shutting down ARFCOM. An idea must be novel; you can't just patent anything. The US Patent Office spends a great deal of time investigating the originality of applications.

That's just it, apaprently they don't if these court cases are any indication.

Quoted: Quoted: It's like saying "Oh I patented this idea to have a website where people can post messages about guns" and then shutting down ARFCOM. An idea must be novel; you can't just patent anything. The US Patent Office spends a great deal of time investigating the originality of applications.

Maybe for things other than software patents. Some of the ones  that have been issued were complete jokes.

Quoted: Maybe for things other than software patents. Some of the ones  that have been issued were complete jokes.

A patentable idea must only be novel. There is no burden on the applicant to show complexity.

That said, I would agree that some reduction in scope would make sense.

Hell, I wish ebay would take the damn "buy it now" feature out.  It's not an auction.  Ebay is about auctions.  That and the stinking reserve.  If you won't sell it for less than $X  then list it at $X and let it go from there instead of people guessing at what X equals.