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Last Updated: Wednesday, 28 May, 2003, 09:45 GMT 10:45 UK
eBay fined over patents
eBay
The online auction house eBay has been fined for infringing a patent on the procedures its customers use to register online bids backed by credit cards.

The jury in the long-running court battle found in favour of MercExchange, a much smaller company which had accused eBay of using its ideas to operate its online auction business.

eBay must pay a fine of $35m - a relatively small sum for a company which reported profits of $104m for the first three months of this year alone

But the case could cause much greater damage by forcing a change in the way the online auction house operates.

Battling on

MercExchange filed the lawsuit two years ago.

We are thankful that a small company got its day in court
Thomas Woolston, MercExchange founder

Its founder Tom Woolston, also a patent lawyer, claimed eBay had used his ideas without his permission and without paying him.

And although the jury found in his favour, eBay has vowed to fight the verdict.

"The battle in this case is far from over," said Jay Monahan, eBay's deputy head of counsel.

Injunctions?

The verdict involved eBay's Half.com and Buy it Now services.

The judge in the case has yet to rule on whether eBay must change any of its practices in light of the ruling.

"If it's upheld that the patents were violated, then the court could issue an injunction against practising the patents," said Neil Smith, a patent lawyer based in San Francisco.

Such an injunction would be a major blow for what has until now been one of the internet's most successful businesses.

'Walking on sunshine'

However, Mr Woolston welcomed the verdict.

"I'm walking on sunshine," he said.

"We are thankful that a small company got its day in court and was vindicated by a jury."

Two years ago, Mr Woolston settled a similar case out of court with Overture Services which he had accused of infringing a different patent.




SEE ALSO:
eBay: Bidding for success
16 May 03  |  Newsmakers
eBay overtakes Amazon in UK
25 Apr 03  |  Business
Another jump in eBay profits
22 Apr 03  |  Business
eBay celebrates profits boom
17 Jan 03  |  Business
eBay hit by credit card scam
11 Dec 02  |  Business
Internet auction scam uncovered
05 Dec 02  |  Business


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