March 29, 2006

eBay threatened with closure for infringement

by Brian Turner

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eBay, the huge online sales and auction service, is being threatened with closure of a key service over patent infringements.

The dispute is with the company MercExchange, who have already successfully argued in the American courts that two of its patents have been infringed by eBay.

The infringements primarily relate to the use of the “Buy it Now” tool on eBay’s website.

Under US law, any company in breach of patent infringement can be served with an injunction to stop using the infringing technology with immediate effect.

Although it may take several months for the US Supreme Court to come to a decision – allowing both parties to come to a mutual settlement – it remains a case that major companies are watching closely.

Blackberry maker RIM recently narrowly avoided similarly being shut down for patent infringement.

The key problem is that while smaller companies stand accused of “patent trolling”, major companies have also been accused of taking out spurious patents which attempt to cover existing services used elsewhere.

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