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US high court sets aside eBay patent ruling ! - 5/15/2006 12:04:14 PM   

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The U.S. Supreme Court on Monday set aside a patent injunction against online auctioneer eBay Inc., but also rejected a key argument made by the company that could have narrowed the rights of patent holders.

The high court unanimously reversed an appeals court ruling in favor of MercExchange, a developer of e-commerce technology that sued eBay for patent infringement, saying an appeals court had failed to apply the proper legal test in deciding whether MercExchange should be granted an injunction barring eBay from using its technology.

However, the justices also rejected a crucial argument advanced by eBay, and embraced by a U.S. District Court that handled the case, that companies lose some of their right to an injunction if they have agreed to license out their technology or are not using it to make a product themselves.

Some high-tech companies complain a near-automatic injunction allows them to be held ransom by owners of questionable patents who have no intention of actually making a product.

EBay was found to have infringed on two e-commerce patents that MercExchange said were key to eBay's "Buy it Now" feature, which handles fixed-price scales. But a U.S. District Court refused to issue an injunction and awarded MercExchange monetary damages instead.

The U.S. Court of Appeals for the Federal Circuit, which hears most patent case appeals in the U.S. courts, reversed the decision, citing legal doctrine that gives patent holders the right to an injunction "absent exceptional circumstances."

EBay has said that an injunction would not affect its business because of technology changes it made during the course of the case.

Source : YahooNews
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