eBay Hit with $3.8B Patent Suit

XPRT Ventures claims theft of 6 payment-system patents.

by Auctiva.com staff writer
- Jul 13, 2010

A little-known technology developer is suing eBay for trade secret theft and infringement of six patents related to electronic payment systems.

Connecticut-based XPRT Ventures LLC asserts eBay "unfairly stole the idea and method of payment" used by PayPal. The suit seeks at least $3.8 billion in monetary damages. eBay subsidiaries PayPal, Bill Me Later, Shopping.com and StubHub are also named in the suit.

XPRT claims eBay stole information shared in confidence by XPRT's inventors and later used the disclosures to apply for its own patents. XPRT alleges the information was used to integrate PayPal into eBay's e-commerce platform and roll out features including PayPal Pay Later, PayPal Buyer Credit, PayPal's Balance Manager Service and the Checkout payment system.

In a released statement, eBay said: "We are reviewing the complaint filed today. We believe it is without merit, and intend to defend ourselves vigorously."

This isn't the first time eBay has been called out for patent infringement. In 2001, defunct online auction company MercExchange, filed a suit that went all the way to the U.S. Supreme Court before being thrown out.

The suit arose after discussions broke down on the way to eBay licensing MercExchange's direct-buy patents. In 2007, the companies reached a settlement and eBay now owns the technology, widely known as Buy It Now.

eBay recently was awarded a U.S. Patent granting it exclusive ownership of the online auction process.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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