• NY Times, Monday, March 27, 2006 10:31 AM

The U.S. Supreme Court will hear arguments on Wednesday in the case involving eBay, a patent dispute with a small company called MercExchange. The high court will consider whether a district court's decision to deny an injunction against eBay's use of the "Buy It Now" feature was correct, as eBay was found to have infringed on MercExchange's patent in using the feature. Both companies are lining up supporting briefs from third parties: the University of California, as well as GE, P&G and a group of venture capitalists have filed briefs in support of MercExhange, while Oracle, Microsoft, and Intel all filed jointly in support of eBay. The latter group said the injunction rule "has transformed patents into a powerful tool for litigation abuse," and "stifles innovation." In 2003, a federal court jury in Virginia found that eBay had violated two of three patents held by MercExchange. The court ordered the auctioneer to pay $25 million in damages, but the judge presiding over the case refused to grant an injunction that would have kept eBay from using the patented methods in its Web operations. The Supreme Court agreed to hear the case after the U.S. Court of Appeals for the Federal Circuit overturned the lower court's decision and ruled that MercExchange was entitled to an injunction.

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