eBay found guilty of patent infringement

A US federal jury has found eBay guilty of patent infringement and ordered the online auction giant to pay $35m in damages.

The district court jury sided with the complainant MercExchange, which accused eBay in 2001 of infringing on three patents held by MercExchange founder Tom Woolston. The verdict determined that eBay and its Half.com subsidiary wilfully infringed on two of those patents with its "Buy It Now" feature for fixed price sales.

The wilful infringement ruling opens the door for the judge to hold eBay liable for triple damages, or $105m, said Neil Smith, a lawyer specialising in intellectual property law at law firm Howard Rice. The judge may also issue an injunction against eBay to prevent the company from continuing to use the patented invention, a method for using a credit card to lock in an offer to purchase items online, Smith said.

"The important implication is the spectre of an injunction," Smith said. "It casts some uncertainly over the right to use the invention, which may impact the 'Buy It Now' feature at both eBay and Half.com. That feature certainly relates to a good chunk of their business."

Last year a judge ruled that the third patent, covering online auction technology, is invalid and unenforceable.

eBay intends to ask the judge to set aside Tuesday's verdict and seek a new trial, according to spokesman Kevin Pursglove. The evidence presented in the course of the trial doesn't justify the verdict, he said.

"In eBay's view, this dispute that is far from over," Pursglove added.