eBay Sued for $3.8 Billion in PayPal Patent Case

Article excerpt

NEW YORK (REUTERS) - EBay Inc was sued for at least $3.8 billion on Tuesday by a Connecticut company that accused the online auctioneer and retailer of infringing six patents to develop lucrative payment systems such as PayPal.

According to the complaint filed Tuesday by XPRT Ventures LLC in the federal court in Delaware, eBay allegedly stole information shared in confidence by the inventors on XPRT's own patents, and incorporated it into features in its own payment systems, such as PayPal Pay Later and PayPal Buyer Credit.

XPRT said that when eBay on April 30, 2003 filed a patent application titled "Method and System to Automate Payment for a Commerce Transaction," it failed to tell the U.S. Patent and Trademark Office it knew of XPRT's own patent applications.

By filing for a similar patent, eBay "admitted the patentability of the inventors' claims," the complaint said.

"This involves a trade secret theft, along with sheer patent infringement," said Steven Moore, a partner at Kelley Drye & Warren LLP representing the plaintiff, in an interview. …