eBay facing largest patent infringement suit ever: $3.8 billion

eBay logoConnecticut-based XPRT Ventures said Wednesday that it had sued eBay and its subsidiaries for infringing on six patents related to e-commerce. The company said it shared the technologies "in confidence" with the auction site, but eBay apparently used those technologies for financial gain.

Specifically, the suit alleges Paypal's Pay Later, Buyer Credit, Balance Manager, and the checkout system infringe upon XPRT's technologies. The company is asking for $3.8 billion in damages, and was filed in U.S. District Court in Wilmington, Del.

According to the lawsuit, XPRT first contacted eBay in 2001 and advised them that purchasing PayPal would streamline their business, and that the auction site could use XPRT's patented methods to put PayPal to use. The company says it contacted the auction site to gauge its interest on using the technology.

eBay apparently never responded, and XPRT attempted to contact the auction site again to no avail. The acquisition of PayPal was allegedly announced shortly after this second contact.

"EBay ... should have known that such modification and combination would violate Inventors' patent application claims should they issue as patents," the lawsuit reads in part.

Other charges leveled against eBay include the company attempting to patent XPRT's technology on its own, which the US Patent Office apparently rejected four times. What's curious is that these patents were applied for in 2003, some two years after the company had apparently been alerted to XPRT's already issued patents in the space.

The auction site says that the suit is without merit, and intends to fight it vigorously in court. On its part, XPRT said it does not plan to seek an injunction immediately, but does expect compensation for its work.

If allowed to stand by the courts, XPRT's damages would amount to the largest patent settlement in history, far outpacing the current largest award -- $1.725 billion to Johnson & Johnson by Boston Scientific for coronary stent patents. That case was settled in February of this year.

Source: Betanews

Tags: eBay

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