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By | Cade Metz 29th February 2008 17:56

eBay makes nice with MercExchange

'OK. Fine. We'll buy your patents'

After six years of legal bickering, which included a trip to the highest court in the land, eBay and MercExchange have finally settled their long running patent dispute.

Yesterday, the world's most popular online auction house announced that it will purchase the three MercExchange patents at the heart of this epic battle - though the company wouldn't say how much it will pay.

"We're pleased to have been able to reach a settlement with MercExchange," read a canned statement from Mike Jacobson, eBay senior vice president and general counsel. "In addition to resolving the litigation, this settlement gives us access to additional intellectual property that will help improve and further secure our marketplaces."

MercExchange sued eBay way back in 2001, claiming that the auction site's "Buy It Now" button infringed on three of its patents. The "Buy It Now" button allows impatient people to purchase stuff without actually winning an auction.

Two years later, a federal jury ruled in favor of MercExchange, awarding the tiny Virginia company lots of money, but U.S. District Judge Jerome Friedman refused to remove eBay's "Buy It Now" button. On appeal, the U.S. Court of Appeals for the Federal Circuit contradicted Friedman, arguing that an injunction was a good idea after a finding of patent infringement. But eBay appealed, and the case went before The Supremes.

The Supremes, with what everyone called a "landmark decision", argued that an injunction may or may not be necessary in such cases and sent the case all the way back to Judge Friedman.

Friedman still refused to issue an injunction but awarded MercExchange $35m. eBay then said it would appeal, but now the auction giant has decided that enough is enough.

As part of the settlement, eBay will also purchase "some additional related technology and inventions and a license to another search-related patent portfolio that was not asserted in the lawsuit." eBay had already set aside some dough for this sort of thing, so the company "does not expect" that the settlement will change anything it said during its Q4 2007 earnings call. ®

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