Wednesday, June 13, 2007

Bye It Now?

An article in the Associated Press today reported that Virginia based MercExchange LLC is asking for a permanent injunction against eBay to prevent them from using "buy it now" and "Fixed Price" options on the auction web site. MercExchange claims that eBay continues to violate patents they hold related to the "buy it now" technology. In 2003, a jury did decide that eBay was in violation of MercExchange's patents, but last year the Supreme Court ruled that did not mean MercExchange could get an automatic permanent injunction.

For their part, eBay responded to MercExchange's request by saying that they have already developed a work around so that they are no longer in violation of any patents.

The article did not address what might happen to eBay sellers if MercExchange's request was granted. Would eBay be forced to disable their "buy it now" and "Fixed Price" features? It seems it could be a possibility, but due to the revenue loss that could cause both eBay and many sellers who list primarily in "buy it now" or "Fixed Price" format, one would have to think that eBay would be able to work out some sort of licensing agreement to be able to continue using the technology.

One of eBay's main complaints against MercExchange is that they don't seem to have any other business purpose than to collect and sue over patents. This is not the first case of this. What do you think about businesses that operate this way? Is the US in need of patent reform?

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