eBay sued for $3.8 bn over patent infringement
eBay is being sued for $3.8 billion over six alleged breaches of a software company’s patents. XPRT Ventures claims that eBay “unfairly stole the idea and method of payment used in eBay’s PayPal and similar electronic payment systems … during current California gubernatorial candidate Meg Whitman’s tenure as eBay’s CEO”. The claim covers several features incorporated into eBay’s payment systems, including PayPal Pay Later, PayPal Buyer Credit and the Checkout payment system.
The Register has more details of the story, stating that the inventor, George Likourezos, had meetings with eBay where he demonstrated the technology with a view to eBay purchasing it. After the demonstration, a lawyer from eBay contacted Mr Likourezos, to request further information and documentation. The same lawyer later filed eBay’s own patent application which initially made no mention of XPRT.
The US Patent Office rejected eBay’s application four times because of XPRT’s patent, which had been filed two years earlier. The company is now seeking “in excess of $3.8 billion” in damages. An eBay spokesperson has said, “we intend to defend ourselves vigorously.”
This is not, of course, the first suit against eBay for patent infringement. In 2007, they succesfully defended a suit from Netcraft, which alleged PayPal infringed Netcraft’s “Internet Billing Method”. A six year long fight between eBay and MercExchange over “Buy It Now” ended with MercExchange assigning their patents to eBay; other terms of that agreement were not made public.