In This Corner: Big Names Back eBay, MercExchange - InformationWeek

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3/28/2006
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In This Corner: Big Names Back eBay, MercExchange

The fight pits eBay vs. MercExchange, but both sides have some impressive names in their corners when the Supreme Court hears arguments Wednesday in the patent infringement case.

The fight pits eBay vs. MercExchange, but both sides have some impressive names in their corners when the Supreme Court hears arguments Wednesday in the patent infringement case.Filing friend-of-the-court briefs backing eBay's position that an injunction shouldn't be automatic when a company infringes a patent is a roster of IT, Internet, and media heavyweights, including Intel, Microsoft, Oracle, Yahoo, and Time Warner.

Championing MercExchange's position are trade associations representing the major pharmaceutical and biotechnology companies; patent-holding firms such as Intellectual Ventures; industrial giants General Electric, 3M, Proctor & Gamble, DuPont, and Johnson & Johnson; independent inventors; and the Bush administration--which took the opposite position in the BlackBerry case, supporting the alleged infringer, Research In Motion.

In 2001, MercExchange sued eBay for violating its patents on technology it says the online auction site uses for its buy-it-now feature. A jury in 2003 found eBay infringed two of three patents. The court ordered eBay to pay $25 million in damages, but refused to issue an injunction. The U.S. Court of Appeals for the Federal Circuit, which hears patent disputes, ruled that the injunction should be issued unless special circumstances exist, such as a threat to public health and welfare.

What's not at issue here is the validity of MercExchange's patent. MercExchange's patent is deemed valid. Yet this case never would have reached this stage if the patent system weren't dysfunctional.

Handicapping the case is patent attorney Dennis Crouch, who sees MercExchange prevailing. In his patent law blog, Patently-O, Crouch writes: "MercExchange's brief is one of the best that I have ever read. In a 12-page fact section, MercExchange tells its story and leaves little doubt that it will likely win its case, regardless of the rule eventually created by the high court."

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