Will eBay End up Paying for Its Own Auctions?

In a move that could pressure eBay (EBAY Quote), an online liquidator partially owned by the auction giant has agreed to settle a troublesome patent dispute over who owns online auction technology.

ReturnBuy, which helps manufacturers and retailers dispose of returned and excess inventory through its Web site and via eBay, has agreed to license a patent owned by privately held MercExchange. In exchange, MercExchange has agreed to dismiss its claims against the Ashburn, Va.-based company. That leaves eBay and its wholly owned subsidiary, Half.com, as the remaining defendants in the suit.

MercExchange claims the settlement validates its claim that eBay's auction system is a knockoff of the process it patented in 1995. MercExchange's move to settle with ReturnBuy may be an attempt to get eBay to the negotiating table, said Carl Oppedahl, an intellectual property lawyer with Dillon, Colo.-based Oppedahl & Larson. ...