The ruling gives fresh hope to eBay following an appeal court
ruling earlier this month that upheld the bulk of the $29.5 million
in damages awarded against eBay and raised the spectre of an
injunction being imposed upon eBay's fixed price and "Buy It Now"
sales.
The dispute between eBay and MercExchange has been running since
October 2001, and hinges on an auction site patent application that
was filed a few months before eBay was launched in 1995.
The case has now been remanded to a lower court for
consideration as to the validity of another of MercExchange's
patents, and on the question of an injunction.
Alongside the infringement action, the
USPTO
has
been re-examining the three patents initially founded on in court
by MercExchange and in February issued a preliminary finding that
one of these, relating to on-line consignment auctions, was
invalid.
According to eBay, the
USPTO
has now issued a
preliminary verdict on the "Buy It Now"-related patent, finding
that all of MercExchange's claims in respect of the patent are
"obvious" or otherwise unpatentable.
"The Patent Office rulings have put a major cloud over
MercExchanges's key patents," said eBay Vice President of
Intellectual Property, Jay Monahan. "eBay has maintained all along
that the patents are not valid, and the Patent Office seems to
agree".
MercExchange does not.
"Such first office actions are typical in a re-examination
proceeding, and only invite the patent owner to distinguish the
asserted prior art. We intend to do so on the very basis of the
Federal Circuit's decision, among other things," said Thomas
Woolston, the patent's inventor and a principal of MercExchange.
"We will deal with this office action, like all previous office
actions during the prosecution of our patents, in the ordinary
course."
The validity of patents can be a difficult and technical issue,
but it is recognised that where the feature being patented is
already in the public domain – known as "prior art" – then it
cannot be patented.
