eBay, Bidder's Edge end lawsuit

Bidder's Edge agreed to pay eBay an undisclosed amount of money under the out-of-court settlement, the companies said yesterday. EBay filed a lawsuit in December 1999 in federal court in San Jose, seeking to stop Bidder's Edge from using an automated search software, called robots, to comb for listings on eBay's Web site.

Bidder's Edge, based in Burlington, Mass., had deployed robots to eBay and other sites to help Internet users view all auction listings at once.

EBay, based in San Jose, contended Bidder's Edge was trespassing on its site and creating a strain on its servers. Bidder's Edge argued eBay was a public site because it doesn't require passwords and therefore shouldn't restrict visitors — human or machine.

Last May, a judge found that Bidder's Edge did potentially strain the eBay site and issued a preliminary injunction temporarily banning the company from sending robots to eBay.

Under the settlement reached Thursday, Bidder's Edge agreed to abide by the preliminary injunction and dropped an appeal of the order as well as an antitrust counterclaim it filed against eBay.

Bidder's Edge had shut down its Web site last week, citing market conditions. It was difficult to compete against eBay, which accounts for more than 70 percent of the online auction market, said James Carney, president of Bidder's Edge. The company is pursuing another business product now, he said.

"We shut down that business so it didn't make sense to pursue litigation," Carney said. "But even though we settled, from a philosophical standpoint we still disagree with eBay on the open or closed approach that it uses."

EBay considered the settlement a victory.

"We were concerned about the unauthorized access onto our site," said eBay spokesman Kevin Pursglove. "And this settlement will send a strong message that eBay and other businesses can proceed without fear of unwanted trespassers that will steal or profit from the fruits of their labor."

Added Jay Monahan, eBay's legal counsel for intellectual property: "Our site is designed for human access and to have a robot coming in at 10 times that speed — there reaches a point where the system can't keep up."

The lawsuit was being closely watched by cyberlaw experts.

The courts have yet to clarify what the Internet truly is: A public library where anybody can come in and browse, or a private store where owners can restrict whom they let in.

Even if the eBay and Bidder's Edge case had gone to trial, a decision there would only have been an "opening salvo," said Walter Effross, an electronic commerce law professor at American University in Washington, D.C.

"Unless the issue went all the way up to the Supreme Court, it wasn't going to be settled," Effross said. "I don't think this is a dead issue; we'll see the issue surface in other cases."

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