Recently, a United States Federal Court jury in Virginia found eBay and one of its subsidiaries, Half.com, liable for $35 million in damages for patent infringement. In September 2001, the plaintiff, MercExchange L.L.C., commenced the action against eBay and Half.com for allegedly infringing the claims of its U.S. Patent Numbers 6,085,176, 5,845,265 and 6,202,051. These three patents relate to methods for searching online marketplaces and auctions invented by MercExchange’s founder Tom Woolston. The jury held that eBay and Half.com willfully infringed the claims of Patent Numbers 6,085,176 and 5,845,265. The verdict centered on the companies’ “Buy It Now” feature which permits fixed price sales.
The two companies may potentially be liable for further damages as a result of the jury’s finding of willful infringement. Under U.S. Patent Law, a Judge may triple the amount of a damage award in circumstances where a defendant has acted “willfully” in infringing the claims of a patent. More problematic for eBay is the possibility that the Judge will impose a permanent injunction. Such a ruling could impede eBay’s Half.com and Buy It Now businesses.
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Summary by: Lenni Carreiro