Emerging victorious after years of battling eBay in a patent infringement lawsuit, Thomas Woolston, President of MercExchange, said he's ready to move on. A jury reached a verdict on Tuesday, declaring eBay had willfully infringed MercExchange's consignment fixed-price and software search agent patents and handed MercExchange $35 million in damages.
When asked if he would go after small niche sites in the auction industry, Woolston said, "it is not our goal to enforce these patents, we want to sell off our Intellectual Property rights." MercExchange is talking to companies "the size and scope of eBay," who are very interested in purchasing his patent portfolio. "We've had good discussions with these companies," Woolston said.
Would Woolston sell his patents to eBay now? Woolston said eBay has not spoken to him outside a courtroom since June 2000 when he first approached them about purchasing his patents. "I always thought the eBay community was the natural home for the patents," he said.
However, if eBay wants to purchase exclusive rights to the patents, there may be antitrust concerns.
"Acquisitions of patents can create the same antitrust issues if they give market power to the acquiring company," according to Kevin Buford, partner and leader in the mid-Atlantic Intellectual Practice area at Holland & Knight LLP.
Yet it may be in eBay's interest to make such a purchase: MercExchange intends to file a motion to have the court enter an injunction against eBay and Half.com, according to Jennifer Albert, a partner and the co-head of the Intellectual Property Practice at Hunton & Williams LLP, which represented MercExchange. This would affect the fixed-price listings on the eBay and Half sites.
In order for a judge to deny an injunction, there must be a "sound reason," such as an overriding public interest, according to Holland & Knight's Buford. "I am unaware of any facts that would suggest eBay has a sufficient "sound reason" to rely on in this case."
eBay could try to reach a provisional settlement with MercExchange while the appeals process goes on, but Buford said MercExchange would be unlikely to agree to this since they have procedural advantage.
eBay said the court has established a two or three week time frame for the filing of post trial motions. "Ours will consist of motions to overturn the verdict, vacate the decision and dispute the damages," said eBay spokesperson Kevin Pursglove.
Hunton & Williams said it expects the judge to make his ruling on damages about 30 days after post-trial briefs, which are due in about two weeks.
In the meantime, the patents may be sold to the highest bidder.
