eBay petitioned the U.S. Patent & Trademark Office to reexamine MercExchange patents, and on June 4, 2004, the Patent office ordered a reexamination. The patents cover consignment fixed-price and software search agent technology.
A federal jury had found eBay guilty of infringing those patents last year, and eBay was ordered to pay MercExchange $29.5 million in damages. eBay is currently appealing the case.
MercExchange's president Tom Woolston said eBay has committed serious fraud by submitting perjurous evidence to the Patent office in its reexamination petition.
Practicing patent attorney Kevin Buford said reexaminations of patents is not unusual. Buford, a partner at Holland & Knight law firm, said there could be several outcomes in a patent reexamination, including narrowing the claims of the patent. If the Patent office rewords the patent and there is a material narrowing of the claim, eBay could cite the intervening rights doctrine and ask the court to forgo the judgement against it in the MercExchange lawsuit.
US Patent & Trademark spokesperson Brigid Quinn said statistically, 30% of the time all claims have been confirmed in third-party reexamination requests; 12% of the time all claims have been cancelled; and 58% of the time one or more of the claims are changed. "That means they have to be narrowed or eliminated, they cannot be broadened in reexam," Quinn said. The statistics are cumulative from 1981 through March of this year and apply to third party reexamination requests.
Buford and Quinn agreed that the Patent office does not consider court cases in making a determination in a patent reexamination. And if the Patent office narrows the claims, Buford said, it's not a slam-dunk that the judge would go with an eBay appeal.
Woolston feels that eBay's petition filing is more of the same. "It's the same issues being re-litigated at the Patent office," he said. "It's a desperate act of a company that refuses to accept any responsibility for their platform users."
MercExchange issued a press release earlier this week announcing auction marketplace uBid had agreed to license its patents for Internet-based auctions.
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