eBay's "Buy It Now" Supreme Court boost

The US Supreme Court will review a patent infringement case against eBay, granting the online auctioneer's petition on Monday.

The matter under review is whether to allow MercExchange, the plaintiff in the case, to obtain a permanent injunction against eBay related to the way it handles fixed-price sales. A district court in 2003 found that eBay's "Buy It Now" feature infringed on two MercExchange patents. Buy It Now allows consumers to purchase an item without participating in an auction.

A federal appeals court later ruled in favour of a permanent injunction and awarded MercExchange $25m in damages. The appeals court also ruled that eBay had infringed on only one of MercExchange's patents.

The nation's highest court rejects a vast majority of petitions for review, so the decision to grant eBay's request for cert, or writ of certiorari, was somewhat unexpected.

An eBay spokesman said: "We're gratified that the Supreme Court has agreed to hear this important case."

The Supreme Court's decision in this case could hold broad implications for patent holders and those accused of infringing on them. Judges commonly issue injunctions against companies found guilty of infringement while their cases are on appeal. eBay wants the high court to question that practice, which has hamstrung numerous high-technology companies. Cisco Systems and Microsoft filed a joint brief with the Supreme Court in support of eBay's petition.

E Patrick Ellisen, an intellectual-property attorney at Foley & Lardner, said: "I am not surprised that the Supreme Court agreed to grant cert, as this is a very hot issue with lots of amicus interest expected. This issue has also been central in the Congressional debate over patent reform."

MercExchange appeared to be undeterred by the decision.

Scott Robertson, an attorney representing MercExchange, said in a statement: "MercExchange remains confident in its view that it will ultimately prevail in its struggle against this infringer. Since eBay's argument requires overruling long-established legal precedent, we look forward to the consideration of the Supreme Court in this matter."

eBay must file a brief with the Supreme Court by mid-January. The company expects a hearing after that, said the eBay spokesman.

In the meantime, eBay has revised the way it conducts fixed-price sales on eBay and subsidiary Half.com that avoids the disputed technology. The spokesman said: "Any injunction would not have an effect on our operations at all."

Fixed-price sales account for nearly a third of the trading that takes place on eBay in terms of dollar volume, he added.

In addition, the US Patent and Trademark Office is currently re-evaluating the validity of the MercExchange patents related to the case.

Alorie Gilbert writes for CNET News.com