Supreme Court mulls eBay appeal

By Steve Malone

Posted on 29 Nov 2005 at 10:46

The US Supreme Court has announced that it will consider hearing an appeal by eBay over a long-running patent dispute with Virginia startup MercExchange. At issue is an Appeal Court ruling that a District Court judge should have issued an injunction that would have prevented using any of the disputed technology until all appeals had been heard.

As the patents concerned involved the use of credit cards and online auctions, it would have hit the very heart of eBay's business model. It would be hard to imagine how the company could continue operating in the US without settling.

In 2003, the auction giant lost the case against MercExchange and was ordered to pay $29.5 million to the company and the inventor Thomas Woolston, who claimed he had the idea of online auctions using credit cards before eBay was founded in 1995 in order to exchange baseball cards.

The case will be closely watched by a number of patent lawyers and high technology firms. A ruling in favour of MercExchange in this case would mean that any small patent-holding company that wins a patent case in a lower court could bring a huge technology company to a halt with an injunction.

One company that will be watching the Supreme Court's decision particularly closely is Research In Motion, the manufacturers of the BlackBerry mobile email device. It too is involved in a case brought by a small technology company that says it owns the patent to wireless email messaging.