BidBay decided to settle with eBay after eBay filed a trademark infringement lawsuit against the smaller auction site last summer. The lawsuit had charged BidBay with copying eBay's look and feel in the design of its logo and for using the letters "bay" in the BidBay name. Ironically, BidBay owner George Tannous had purchased the domain name "BidBay.com" from an eBay auction. Last month, BidBay redesigned its logo, but apparently that was not enough.

"We can't fight eBay - it would cost us half a million dollars," George Tannous, BidBay's CEO, told AuctionBytes. Tannous said his company has already spent thousands of dollars in legal fees relating to the suit.

eBay released a statement about the settlement in which Jay Monahan, eBay’s Associate General Counsel, declared, “This sort of brand misuse threatens the distinctiveness of the eBay brand, and eBay will act aggressively to stop it.”

eBay has a history of aggressively protecting its turf. Exactly one year ago today, online auction aggregator Bidder's Edge closed its site after eBay sued it for copyright infringement for publishing eBay auction information on its site. The two companies later settled the dispute. And earlier this month, BrickBay.com changed its name to BrickLink.com after being pressured by eBay to change its name due to the letters "bay" in its name.

BidBay said that on March 1st, BidBay.com will become AuctionDiner.com. AuctionDiner will continue to function as an online auction site, and members will not have to change their usernames or passwords. All auctions will remain active, and feedback will also remain in place. However, Tannous explained that the site will use new terminology for site features to fit in with the diner theme; for example, the "Categories" tab will be renamed "Menu."

Tannous also explained that members will be able to use its AuctionDiner image-hosting service on other auction sites, including eBay. AuctionDiner will launch another service in March called Multi Level Auctions (MLA), a program it has designed with the help of Sheffield Resource Network (http://www.sheffieldnet.com). BidBay also has plans to open a "real life" diner/café in March and will launch AuctionDiner as a franchise restaurant operation within six months. The diner will offer gourmet coffees, sandwiches and a juice bar, and customers will be able to watch live five-minute auctions on plasma screens throughout the diner. The first diner will open in March next to BidBay headquarters in Tujunga, California.

In a related story, BayPal, (http://www.baypal.com) an auction management software company started in 1999, was also contacted by eBay and will be changing their name. According to BayPal's Mark Conover, they have not settled on a new name and are looking for suggestions from their users.