A judge in the long-running eBay vs. MercExchange case has refused to order eBay to stop using the Buy It Now feature. U.S. District Court Judge Jerome B. Friedman refused MercExchange’s request for a permanent injunction against BIN; the US Supreme Court ruled last year that although eBay was infringing MercExchange’s patent, it was for the lower court to rule whether or not they had to stop using the technology. The case has thus become a rallying point for critics of “patent trolls” – those who try to sue established companies to enforce patents for ideas that have never been developed into products.
Judge Friedman said that MercExchange was not irreparably harmed as it continued to make money from its patents, either by licensing its technology, or by litigation against those it believed infringed its intellectual property:
“MercExchange has utilized its patents as a sword to extract money rather than as a shield to protect its right to exclude or its market share, reputation, good will, or name recognition, as MercExchange appears to possess none of these.”
However, Judge Friedman also denied eBay’s request to stay proceedings on one of the two patents in the case, saying that the “infringement suit has already been tried by a jury and a final verdict and damage award has been affirmed by the federal circuit”. This could see eBay paying US$25.5million in damages to MercExchange.
He did grant a stay in proceedings on a second patent, until the US Patent and Trademark Office has reexamined the validity of the patent granted to MercExchange: in effect, the Patent Office will decide that issue.
eBay have said that they have changed how their websites work so that they no longer use any potentially infringing technology, and that they have set aside reserves to cover the cost of the law suit and any damages. Spokesperson Catherine England said “we’re pretty pleased with the decision”.
For those at the back who haven’t been paying attention, here’s the background to the case.