eBay Settles Patent Battle with MercExchang

Online auction house eBay has decided to settle a patent dispute with MercExchange dating back to 2001, buying all three patents for an undisclosed amount.

eBay has finally managed to put an end to its long-running patent battle with MercExchange, announcing the company would be paying MercExchange an undisclosed amount to license all three patents at the heart of MercExchange’s lawsuit. The lawsuit dates all the way back to 2001, and managed to track all the way to the U.S. Supreme Court where eBay emerged victorious in what’s still considered a major intellectual property ruling at the time.

Items involved in the lawsuit include the “Buy It Now” feature eBay has featured prominently on its site for many years. eBay’s three patent licensing will cover the company’s use of the “Buy It Now” feature; eBay will also be licensing a search-related patent that wasn’t part of the original suit. Neither company had revealed terms of the settlement, but in late 2007 eBay was ordered to pay MercExchange $30 million in damages.

“We’re pleased to have been able to reach a settlement with MercExchange,” said eBay senior Vp and general counsel Mike Jacobson, in a statement. “In addition to resolving the litigation, this settlement gives us access to additional intellectual property that will help improve and further secure our marketplaces.”

ebay took the patent dispute case to the Supreme Court when a U.S. Court of Appeals upheld an injunction against eBay’s continued use of the “Buy It Now” feature. In intellectual property cases, it was almost automatic for courts to grant injunctions barring alleged infringers from using the disputed patents; eBay took the case to the Supreme Court, which overturned the appellate decision in 2006 (thereby enabling eBay to continue using the feature) but also finding that the original district court had used flawed judgement.