Patent Office Rules In eBay's Favor

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March 31, 2006 (9:56 AM EST)

By W. David Gardner , TechWeb Technology News

eBay said it learned this week that the U.S. Patent and Trademark Office had upheld an earlier decision in a case with involving eBay's "Buy it Now" feature. The court ruled that a MercExchange patent central to the case should not have been issued because it was "obvious," eBay said.

In the meantime, the U. S. Supreme Court continued its deliberations Thursday over the patent case involving eBay and MercExchange,

The patent, No. 5,845,265, and another are key to the "Buy it Now" feature on eBay's auction site, which is the issue before the court. While Supreme Court members seem to have looked favorably on MercExchange's position, the case is considered by many to be another example of questionable patent claims being held against dominant firms by firms that are not in business.

Citing the Patent Office decision, eBay said: "This ruling is significant since it responds to -- and dismisses -- the arguments MercExchange raised in its 100-page response to the Patent Office's previous rejection of all of MercExchange's claims." eBay noted that MercExchange will be permitted to respond to the latest Patent office ruling.

MercExchange has argued that it is not a patent trolling company that had no plans of building a business, but had spent years attempting to build a business around its intellectual property. A jury ruled in favor of MercExchange and the issue of injunctive relief for MercExchange is before the country's highest court.

The justices have indicated they will rule on the issue in June.