Federal court in Delaware is preparing to witness and pass judgment in the lawsuit filed by a Connecticut-based firm named XPRT Ventures LLC. The firm accuses the big online auctioneering and retailing company with of using six of its patents in developing the Paypal transaction system. The east-coast enterprise is not ready to settle at a price below $3.8 billions. This amount is big enough to shake the foundations of the online magnet who is charged of stealing the inventions of XPRT Ventures.
Reuters quoted one of the lawyers who accused eBay of “trade secret theft, along with sheer patent infringement”. The charge is serious enough and eBay now can only put up a defensive stand. They are further accused of breaching the trust of plaintiffs who shared their e-commerce technology with the eBay. This invention was put forward for patent in 2003. The information shared by the plaintiffs in full faith was used by the accused for developing their own payment systems like PayPal Pay Later and PayPal Buyer Credit during current California gubernatorial candidate Meg Whitman’s tenure as eBay’s CEO. Steve Moore added further, saying, “It is bad enough to take someone’s technology, but it is a bit much to use it in your own patent application.” The complaint also includes some more online websites like PayPal, Bill Me Later, Shopping.Com and StubHub as defendants. XPRT also blames eBay for not informing the U.S. Patent and Trademark Office that it was aware of XPRT’s application for the same patent which is clearly a point against the accused. The lawsuit contains not just one but many patents which are patent 7483856 7567937, 7627528, 7610244, 7599881 and 7512563. These patents are basically a computerized electronic auction payment system for carrying out payment for a good purchased or sold in an electronic auction. XPRT pointed out that eBay had illegally incorporated its inventive concepts into its payment system which amounts to “a misuse of inventors’ confidential and proprietary material.”
The patent application of eBay has already undergone rejection four times earlier as XPRT had filed their papers almost a couple of years ago. Given the facts are true, it sounds quite odd that the upper management of online retailer did not have the slightest idea that they were running a high risk of patent infringement by filing such an application. It was only after a search report was issued for eBay’s corresponding foreign patent application that eBay cited XPRT’s published patent application to the USPTO. If we are to believe the plaintiffs, eBay altered the Confidentiality Agreement with regards to the date making it appear as if eBay’s responsibility to keep XPRT’s information confidential only arose on the date eBay’s patent application was filed whereas the truth is that such obligations came into force much earlier.
With all these charges decked against them, is eBay sleeping? A magnet in the world of online auctioneering and retailing, eBay just cannot afford such defamation and they have made press releases countering the charges. The spokesperson of eBay stated to the Am Law Litigation Daily on Thursday that all the charges carried no weight and the firm intends to put forth a strong defense proving all the charges wrong. The defendants claim that the benefits amassed by it are all its own efforts and not something stolen from anyone.
To wrap it all up, it would be unfair to reach a conclusion without listening attentively to both the sides as too much is at stake. An amount of $3.8 billions is surely not an amount which can just be given away. XPRT will also leave no stone unturned to claim the future and present damages being suffered by it. Just keep your eyes and ears open to catch up on the further news of this legal battle.