(Great Falls, VA) December 23, 2005 - MercExchange LLC announced today it has reached an agreement with the US Patent and Trademark Office in the reexamination of U.S. Patent No 6,202,051 (the '051), the online auction patent, concerning the patentability of this important innovation. The USPTO has accepted MercExchange's clarifying amendments to the claims of the patent, and has agreed that these claims are a patentable innovation.

"We wish to thank the USPTO and its dedicated staff for their tireless effort in reviewing this complex legal matter," said Thomas G. Woolston, founder of MercExchange. "Our four years of bitter litigation with eBay (NASDAQ: EBAY) has created an extremely large record, one that would be a challenge for any government agency to sort through. The USPTO and its examiner corps have done an admirable job."

In 2003, a jury in the District Court for the Eastern District of Virginia found eBay to be willfully infringing two of MercExchange's patents, awarding $35 million in damages, but the Court declined to issue a permanent injunction against eBay. The Court of Appeals for the Federal Circuit reversed that decision, finding that the District Court should have issued the permanent injunction, and reduced the MercExchange award to $25 million in damages through March 2003. In addition, the Court of Appeals ordered the District Court to conduct a trial on the '051, which had been eliminated from the initial jury trial by a summary order of the District Court.

In July 2005, eBay filed a petition for a writ of certiorari asking the Supreme Court to review the Federal Circuit's reversal of the District Court's decision to not issue a permanent injunction. While on appeal of it's loss at trial, in March 2004 eBay also launched an unprecedented attack at the USPTO on the three patents in the District Court suit under the reexamination statutes.

"Today's agreement is an important milestone in our battle to defend our rights as a patent holder," Woolston said. We anticipate a successful resolution with the USPTO of the remaining patents under reexamination."

"eBay was found to be a willful infringer of our patents over two and one-half years ago, and we are now proceeding to the conclusion of their final appeal at the Supreme Court on the issue of the injunction. We look forward to returning to District Court to obtain our relief in this matter, and to finally competing with eBay by practicing our inventions free of infringement," Woolston said.

About MercExchange

MercExchange LLC, was founded in 1995 to improve businesses through the application of new digital technologies, especially in networked environments. MercExchange has been awarded several key patents involving the conduct of internet-based auctions and markets. The inventions and supporting intellectual property cover a range of applications; for additional information visit www.MercExchange.com.