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March 31, 2005
EBay wins another round
As I noted earlier, eBay is on a roll against MercExchange. After winning its appeal in court, eBay's side was further bolstered by a USPTO issued a ruling this week that could invalidate one of MercExchange's patents.
In any patent case, the defendant has a fundamental choice: pay up, or fight. Often companies will pay up simply because the cost of paying is not much more than the cost of fighting and the risks of paying are seen as less. This can have a domino effect, where one company's choice to pay up is seen to lend validity to a patent claim and subsequent defendants are more likely to pay.
EBay bucked that trend - possibly because it saw MercExchange's patent attacking a fundamental feature - and it looks like that choice is paying off. So far - of course, Merc is promising further appeals and eBay could simply choose to use its current stronger legal position as bargaining leverage. I'm reminded of a fencing match.
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