eBay Gets Rid of MercExchange Patent Suit (EBAY)

eBay Inc. (NASDAQ:EBAY) has agreed to a settlement with MercExchange, L.L.C. to dismiss all claims and appeals in the patent lawsuit filed by MercExchange in September of 2001.

These two companies had been involved in litigation over MercExchange’s patents and eBay’s online auctions and fixed price-related e-commerce operations.  eBay is purchasing all three patents involved in the lawsuit, and it is also buying some additional related technology and inventions and a license to another search-related patent portfolio.  These other items were not a part of the long-standing lawsuit.

The full financial terms of the settlement were not disclosed, although eBay noted that it does not expect the settlement to affect its 2007 results or its 2008 financial guidance issued on January 23, 2008.

This is good news in the sense that eBay won’t have an NTP type issue like we saw over the BlackBerry, but might have gotten off scott-free if it decided to fight.  Sometimes it is just cheaper to move on down the road.  Shares are down about 1.5% with the overall market today to $27.17.  This is still very close to its 52-week lows of $25.64.

Jon C. Ogg
February 28, 2008