US judge allows eBay 'Buy It Now' feature

A US judge has denied a request from a small Virginia company to stop online auction giant eBay from using a feature that allows shoppers to buy items at a fixed price.

US District Court Judge Jerome Friedman denied a motion by MercExchange for a permanent injunction against San Jose, California-based eBay over the 'Buy It Now' feature.

Last year, the US Supreme Court ruled that although eBay infringed upon MercExchange’s patent for the service, it was up to the lower court to decide whether eBay had to stop using it.

In his ruling, Friedman said the company was not harmed irreparably because it continued to make money from its patents, either by licensing them outright or by threatening litigation against those it believed infringed upon them.

A federal jury found in 2003 that eBay had infringed on Great Falls-based MercExchange’s patent and awarded the company £17.5m (€23.9m). The amount was later reduced to £12.5m (€17m).

MercExchange lawyer Greg Stillman called the opinion a “double-edged sword”.

“It was sort of good news, bad news for both sides,” Stillman said. “I’m sure eBay is relieved that they’re not going to be enjoined, but on the other hand (Friedman) made it quite clear that they’re going to have to pay for that right.”

Catherine England, a spokeswoman for eBay, said the company was “extremely pleased” with the decision.

Friedman denied eBay’s request to stay proceedings on the Buy It Now patent because the infringement suit had already been tried by a jury and a final verdict and damage award was affirmed by the federal circuit.

The judge did stay proceedings on a second patent held by MercExchange until the US Patent and Trademark Office had time to re-examine it.

In the closely watched case, the high court ruled that judges had flexibility in deciding whether to issue court orders barring continued use of a technology after juries found a patent violation.

The decision threw out a ruling by a federal appeals court that said injunctions should be automatic unless exceptional circumstances applied.

The case became a rallying point for critics who argue the US patent system is riddled with abuse from small businesses that sue established companies to enforce patents for ideas that have never been developed into products.