- The Washington Times - Tuesday, May 27, 2003

NORFOLK (AP) — A U.S. District Court jury yesterday ordered the online auction house EBay to pay $35 million for violating patents filed by a Northern Virginia lawyer.

Jurors ruled for MercExchange, based in Great Falls, which had said its founder, Thomas G. Woolston, filed three patent applications in 1995 for programs and procedures to operate an Internet-based auction.

MercExchange filed suit in federal court in September 2001, accusing EBay of using Mr. Woolston’s ideas to operate its online auction house without his permission and without paying him.

EBay countered that the company’s procedures didn’t infringe on Mr. Woolston’s patents, and that those patents are not enforceable anyway because other people had proposed similar systems and methods before Mr. Woolston filed his applications.

The trial began April 24. The presiding judge said the case was one of the most contentious he had seen in nearly 20 years on the bench.

Both sides presented thousands of pages of briefs and reports from experts, and disputed, sometimes almost line by line, the admissibility of the other side’s evidence. The battling continued to the end of the trial, with both sides hotly disputing each other’s proposed final instructions to the jury.

The level of contentiousness led U.S. District Judge Jerome B. Friedman to comment at a pretrial hearing that it is not a question of whether but when an appeal would be filed.

EBay, based in San Jose, Calif., said in its most recent annual report filed with the Securities and Exchange Commission that it “might be forced to pay significant damages and licensing fees, modify our business practices or even be enjoined from conducting a significant part of our U.S. business. Any such results could materially harm our business.”

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