RealTime IT News

Court Denies Injunction of eBay's Buy It Now

Despite MercExchange LLC's long-time contention that eBay's Buy It Now function violates a MercExchange patent, eBay shoppers can still "buy it now."

Judge Jerome Friedman of the U.S. District Court of the Eastern District of Virginia Friday denied a MercExchange motion that would have forced eBay  to remove the option, which allows customers to quickly buy merchandise at a fixed price, from its auctions.

The ruling was the latest in a protracted legal battle that stretches back to 2001 and came to a boil in 2003 when a federal jury ordered eBay to pay $35 million in damages after it found the company infringed on several patents owned by MercExchange.

The case made it to the Supreme Court, which determined last year that a district and a federal appeals court erred in determining whether a permanent injunction is due to MercExchange in its patent-infringement battle with online auction giant eBay.

The justices ordered the case back to a lower court to determine if a permanent injunction is justified, and Friedman is the latest judge to pore over the arguments and make a decision.

According to a copy of the ruling obtained by internetnews.com, Friedman said MercExchange failed a "four-factor test," which would have determined that such an injunction was legally appropriate.

MercExchange would have had to demonstrate that it suffers irreparable injury that money can't fix, and that such an injunction would "balance harms" between the companies as well as serve the public good.

All that, Friedman wrote, MercExchange did not do.

"MercExchange has simply failed to establish irreparable harm or that damages at law will not adequately compensate it for eBay's infringement," Friedman wrote.

"Additionally, after considering the balance of the harms, favoring neither party, and the public interest, favoring denial of a plaintiff's motion for an injunction, the court concludes that an injunction is not warranted."

Essentially, Friedman wrote that the harm eBay has caused MercExchange is plenty reparable: with cash.

That's not such bad news for MercExchange, company lawyer Greg Stillman told internetnews.com. He characterized the ruling as an implicit acknowledgment that eBay owes MercExchange royalties.

Stillman said the company plans to appeal the injunction denial in the next 30 days, but it's also eager to "hold an evidentiary hearing" on the value of eBay's continued infringement.

Meanwhile, eBay spokeswoman Catherine England told internetnews.com the company is "extremely pleased" with the court's decision to deny, for the second time, MercExchange's request for an injunction.

England also said eBay remains "optimistic" that the U.S. Patent Office will soon revoke MercExchange's patents altogether.

These types of patent cases can go either way. In 2006, Blackberry- maker Research in Motion ended up paying out a $612.5 million patent infringement settlement to NTP.

But just last week a Judge nearly dismissed social network ConnectU's patent suit against Facebook.

Ian C. Ballon, an intellectual property attorney in the Silicon Valley office of Greenberg Traurig LLP, noted that it is easy to allege a contract or a trade secret, but much harder to prove it.

"It is often the case that when a new business model is successful others come forward claiming that they had created it," Ballon told internetnews.com.