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Archive for Thursday, May 29, 2003

Jury rules eBay must pay $35 million in patent dispute

May 29, 2003

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— A federal jury has ruled that eBay's model for selling fixed-price merchandise violates a patent filed by a Virginia attorney, a ruling that could force the online auction house to shed as much as a third of its total business.

Tuesday's $35 million award did not involve eBay's primary auction business.

But patent law experts said it may force eBay to drop Half.com, a discount e-market, and "Buy it Now," which offers fixed-price options on eBay's main auction site. About a third of the company's merchandise can be purchased for a fixed price.

"If it's upheld that the patents were violated, then the court could issue an injunction against practicing the patents," said San Francisco patent attorney Neil Smith.

Experts say that would hurt the company much more than the damage award of $35 million, which Smith called a "drop in the bucket to eBay."

EBay said in a statement that it would ask the judge to set aside the verdict, and would appeal if he does not. "The verdict is still very much in dispute, and the battle is still far from over," said Jay Monahan, eBay's deputy general counsel.

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