Judge say eBay can continue using 'Buy It Now' feature

Judge say eBay can continue using 'Buy It Now' feature

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Story Published: Jul 30, 2007 at 8:28 AM PDT

Story Updated: Jul 30, 2007 at 8:28 AM PDT

By Associated Press

NORFOLK, Va. (AP) - A federal judge Friday denied a request from a small Virginia company to stop the online auction powerhouse eBay Inc. from using a feature that allows shoppers to purchase items at a fixed price.

U.S. District Court Judge Jerome B. Friedman denied a motion by MercExchange LLC for a permanent injunction against San Jose, Calif.-based eBay over the "Buy It Now" feature.

Last year, the U.S. Supreme Court ruled that although eBay infringed upon MercExchange's patent for the service, it was up to the lower court to decide whether eBay had to stop using it.

In his ruling, Friedman said the company was not irreparably harmed because it continued to make money from its patents, either by licensing them outright or by threatening litigation against those it believed infringed upon them.

A federal jury found in 2003 that eBay had infringed on Great Falls-based MercExchange's patent and awarded the company $35 million. The amount later was reduced to $25 million.

MercExchange attorney Greg Stillman called the opinion a "double-edged sword."

"It was sort of good news, bad news for both sides," Stillman said. "I'm sure eBay is relieved that they're not going to be enjoined, but on the other hand (Friedman) made it quite clear that they're going to have to pay for that right."

Catherine England, a spokeswoman for eBay, said the company is "extremely pleased" with the decision.

Friedman denied eBay's request to stay proceedings on the "Buy It Now" patent because the infringement suit already has been tried by a jury and a final verdict and damage award was affirmed by the federal circuit.

The judge did stay proceedings on a second patent held by MercExchange until the U.S. Patent and Trademark Office has time to reexamine it.

In the closely watched case, the high court ruled that judges have flexibility in deciding whether to issue court orders barring continued use of a technology after juries find a patent violation. The decision threw out a ruling by a federal appeals court that said injunctions should be automatic unless exceptional circumstances apply.

The case became a rallying point for critics who argue the U.S. patent system is riddled with abuse from small businesses that sue established companies to enforce patents for ideas that have never been developed into products.

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