The online auction company told investors Thursday it would buy MercExchange's patents and MercExchange would dismiss all claims and appeals regarding a lawsuit it filed seven years ago.
"We're pleased to have been able to reach a settlement with MercExchange," Mike Jacobson, eBay senior VP and general counsel, said in a prepared statement. "In addition to resolving the litigation, this settlement gives us access to additional intellectual property that will help improve and further secure our marketplaces."
MercExchange claimed credit for eBay's fixed price auction options through eBay's "Buy It Now" feature, saying the online auction infringed on three of its patents. According to records from the U.S. Patent and Trademark Office, MercExchange filed for the patents in 1995, 1999, and 2001.
eBay tried to fight a judgment that would have cost the company about $30 million. The case went up and back down the U.S. court system. In December of 2007, a U.S. District Court ruling concluded in December that the court lacked authority to consider eBay's motion for summary judgment.
eBay claimed then that it did not infringe on MercExchange's '265 patents and that it owed no damages.
eBay said it will buy three patents, related technology and inventions, as well as a license to a search patent portfolio that is separate from the lawsuit.
The companies did not disclose other settlement terms, which eBay said are confidential. eBay said the settlement should not affect its 2007 results or 2008 financial guidance from January's fourth quarter earnings release.