Judge says eBay can still use Buy It Now feature

San Jose (CA) – A US District Court judge will allow eBay to continue using its “Buy It Now” feature as the company continues its patent fight against MercExchange. Judge Jerome Friedman of the Eastern District Court of Virginia denied MercExchange’s injunction because it appeared that the company was making enough money from its patents.

MercExchange initially sued eBay back in 2003 for infringing on its instant purchase patent. MercExchange won a $25 million judgement and requested a permanent injunction, something that probably would have hurt eBay tremendously.

The injunction request was denied by Friedman, but MercExchange appealed to the Court of Appeals for the Federal Circuit and won the injunction. eBay then appealed that decision to the Supreme Court in May 2006. The Supreme Court overturned the injunction and kicked it back down to Friedman’s District Court. Whew… simply put the injunction was denied, approved, denied and now denied. Legal ping-pong at its finest.

Judge Friedman says MercExchange appears to be making adequate money from the patent and sees no need for an injunction. He also based his ruling on a recent decision by the United States Trademark and Patent Office that finds MercExchange’s patent to be preliminarily invalid.

But perhaps the most interesting part of Friedman’s ruling is that he distinguishes eBay as a large company doing billions of dollars worth of business versus MercExchange as a company “with two employees that work out of their homes and appear to specialize in litigation and obtaining royalties based on the threat of litigation.” Ouch that’s going to leave a mark.

While the injunction has been denied, the main part of MercExchange’s case is still on going and the company could still potentially collect hundreds of millions of dollars from eBay.