Reuters) - eBay Inc. EBAY said
on Tuesday that the U.S. Patent and Trademark Office has
preliminarily revoked a patent that is the basis for a $25
million patent-infringement judgment against the Web
marketplace.
EBay said the decision from the patent office covers the
entirety of the consignment fixed-price patent numbered
5,845,265, which is owned by Thomas Woolston, principal of
MercExchange.
MercExchange, a tiny e-commerce technology developer that
has been locked in a multiyear patent battle with eBay, will
have an opportunity to respond to the initial ruling out of the
patent office.
The patent examiner handling this MerchExchange patent
could not immediately be reached for comment.
A federal judge in 2003 ordered eBay to pay Virginia-based
MercExchange $29.5 million for infringing e-commerce patents
that MercExchange charged were key to eBay's "Buy it Now"
feature. Buy it Now accounted for about 31 percent of the total
value of goods sold on eBay in the fourth quarter of last
year.
The U.S. Court of Appeals for the Federal Circuit earlier
this month upheld the $25 million damage judgment against eBay
related to the above-mentioned patent and cleared the way for a
permanent injunction related to the dispute.
"These rejections are a major new factor that the court
will have to consider," said Jay Monahan, eBay's vice president
of intellectual property, referring to the initial decision out
of the patent office.
Woolston said in a statement that MercExchange still plans
to seek an injunction against eBay and added that he remains
confident that MercExchange will prevail.
"We will deal with this office action, like all previous
office actions during the prosecution of our patents, in the
ordinary course," Woolston added.
EBay previously has said that an injunction would not have
an impact on its business because of changes it has made during
the course of the litigation.
Shares of eBay were up 16 cents, to $36.07, in late
afternoon trade on the Nasdaq.
((Reporting by Lisa Baertlein, editing by Martin Golan;
Reuters Messaging: lisa.baertlein.reuters.com@reuters.net; +1
415-677-2549))
