This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

High Court to Hear eBay Patent Case

Updated from 1:40 p.m.

The Supreme Court will hear an eBay (EBAY - Get Report) patent dispute case.

The San Jose, Calif., auction company said its four-year-old patent dispute with MercExhange LLC over the technology behind "Buy It Now" sales will get a hearing in the nation's highest court.

At issue is a suit MercExchange filed against eBay in September 2001, alleging eBay infringed on three of its patents. One of those patents was eventually invalidated. In May 2003, a jury ruled against eBay and ordered it to pay $35 million in damages. That was lowered to $25 million following an appeal. In bringing its case to the Supreme Court, eBay is arguing that a federal court was wrong to issue an order prohibiting it from technology derived from MercExchange's patents.

"MercExchange remains confident in its view that it will ultimately prevail against the infringer," said Scott Robertson of Hunton & Williams, the lead attorney representing the Virginia company, in a statement. "The bottom line is whether we will be able to obtain an injunction on eBay's buy-it-now operations or whether the court will force a compulsory license."

An eBay spokesman said the company is "gratified" that the court will hear the case. eBay, which has asked the U.S. Patent and Trademark Office to invalidate MercExchange's patents, says it has what it considers "appropriate reserves" for the lawsuit. It has also made operational changes to avoid infringements.

"Nonetheless, if we are not successful in appealing or modifying the court's ruling, and if the modifications to the functionality of our Web sites and business practices are not sufficient to make them non-infringing, we would likely be forced to pay significant additional damages and licensing fees and/or modify our business practices in an adverse manner," the company said.

The case is attracting the interest of other technology companies. Time Warner's (TWX - Get Report) America Online unit and Qualcomm (QCOM - Get Report) filed briefs supporting eBay, as did the Computer and Communications Industry Association. Other tech companies likely will file friend of the court briefs, said Jonathan Band, an attorney representing the trade group.

"Everyone is going to take it very seriously," he said.

In its brief, the Association argues that the patents are "too easy to get, easier to assert, more potent and widely available." This results in "in patents of decreasing quality."

eBay shares fell $1.34 to $45.37

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
EBAY $57.91 0.00%
QCOM $72.51 0.00%
TWX $81.86 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs