The deal means that MercExchange has dismissed all claims and appeals related to its 2001 patent infringement lawsuit against eBay.
The dispute began in 2001 when patent licensing company MercExchange accused eBay of infringing its business method patents (US patents 5,845,265 6,085,176 and 6,202,051) in the auction company’s popular “Buy it Now” feature.
Following a trial in the District Court for the Eastern District of Virginia, a jury found one of the patents valid and infringed, but did not grant injunctive relief.
The Federal Circuit overturned that decision, granting the permanent injunction, and eBay appealed to the Supreme Court.
In 2006, the Court famously rejected the Federal Circuit’s contention that injunctions should automatically be issued unless there are exceptional circumstances, and held that courts should instead follow a four-factor test in deciding whether to award injunctions in patent cases.
The decision was seen by many practitioners as curbing the abilities of patent licensing companies – often described as patent trolls – to extract licensing deals from companies by using the threat of an injunction that would disrupt or even stop their business altogether.
Thursday’s announcement by eBay ends a seven-year battle between the two companies.
“We're pleased to have been able to reach a settlement with MercExchange," said Mike Jacobson, eBay’s senior vice-president and general counsel, in a statement. "In addition to resolving the litigation, this settlement gives us access to additional intellectual property that will help improve and further secure our marketplaces."
Under the terms of the deal, eBay has said it will buy all three patents involved in the lawsuit, as well as some additional related technology and inventions and a licence to another search-related patent portfolio that was not asserted in the lawsuit. The financial terms of the agreement have not been made public.
Michael Caputo, a spokesman for MercExchange, told Managing IP: “We simply felt it was the right time to resolve the case, get on with our lives and pursue other opportunities.”
