eBay Sued For Trademark Infringement

In a David-and-Goliath battle between two Internet auction sites, Bidz.com Thursday filed suit in U.S. District Court against eBay , alleging that the company has infringed upon Bidz.com’s registered trademark “$1 No Reserve” auction.

The suit alleges that Sunnyvale, Calif.-based eBay’s use of the auction promotion creates unfair competition, false designation of origin, and trademark dilution of the licensed mark. David Zinberg, CEO of the Culver City, Calif.-based Bidz.com, said his company is seeking a permanent injunction enjoining eBay from using the trademark, as well as an undisclosed amount of damages.

“Even though eBay seems all powerful in the internet auction field, we are going to show that there are laws and limitations that even they must comply with,” Zinberg told internetnews.com. “We have worked extremely hard establishing our brand and we don’t intend to let [them] unfairly capitalize on our efforts.”

At eBay, where “$1 No Reserve” auctions have been available since the beginning of this year, a spokesperson was not immediately available for comment.

The pending lawsuit began on Sept. 10, when attorneys for Bidz.com sent a letter to eBay demanding that the company cease all use of the “$1 No Reserve” mark. While eBay confirmed receipt of that letter at the time, the company has continued to advertise, promote and run no-reserve auctions for $1. On Friday afternoon, eBay was hosting 680 auctions that met this particular description.

This isn’t the first time eBay has dealt with legal battles this year. In May, a federal jury ordered the online auction giant to pay $35 million in damages after it found the company infringed on several patents owned by Great Valls, Va.-based MercExchange. The suit focused mainly on eBay’s “Buy It Now” feature, which lets users pay through PayPal with a credit card or with other PayPal funds to bypass the usual auction process.

Executives with Bidz.com were quick to point out the auction giant’s recent legal troubles in a press statement.