Search methods
At the heart of the eBay-MercExchange fight was a series of patents that MercExchange founder Tom Woolston began applying for in the spring of 1995, some five months before eBay founder Pierre Omidyar famously launched the website to trade in Pez collectables. The three patents were developed by Thomas Woolston (an engineer who helped build the CIA’s communications network) to cover methods of creating and searching online marketplaces and auctions.
Although a judge had ruled in October that one of the patents was invalid, eBay tried unsuccessfully to have the entire case thrown out in a series of motions for dismissal. Two patents, which cover methods for searching online auctions and market places, were discussed at the trial earlier this year. Specifically, the jury said eBay’s Buy It Now option infringed on Woolston’s ideas.
For eBay, the judge’s award ($5.5m less than the $35m the jury recommended at the end of the five-week trial) was tempered by his decision not to impose a very costly and problematic injunction that would have barred the auction giant from immediate further use of the technology. That could, temporarily, have shut the site down.
Although eBay will appeal the judge’s ruling – their lawyers still claim that the charges made in the patent were not adequately described in Woolston’s original patent application – they are planning to implement design changes that will avoid infringing on them.
Following the decision, eBay revised their second-quarter 2003 results downward. The company said that their impressive profits for the quarter that ended June 30 has been revised to $91.9m, down from $109.7m before taking the charge.
eBay to adapt technology design after losing $29m in patent case
A federal judge has ordered dotcom giant eBay Inc. to pay $29m (£18.3m) to a Virginia inventor who accused the company of stealing his ideas for holding and searching online auctions. Ruling in Virginia on August 6, US District Court Judge Jerome Friedman said there was “no dispute” that the online auction site eBay had infringed patents which covered ways for people to make online bids backed by credit cards and purchase items over the Internet for a fixed price.
