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The Honolulu Advertiser

Posted on: Tuesday, June 10, 2003

Inventor faces backlash from victory over eBay

By Matthew Barakat
Associated Press

Thomas Woolston sued eBay for patent infringement over its "Buy It Now" feature.

Associated Press

GREAT FALLS, Va. — Thomas Woolston's recent $35 million victory in a patent infringement suit against Internet colossus eBay has brought both vindication and vilification.

The vindication comes from the decisiveness of the jury's verdict after an exhaustive five-week trial. The jury gave the northern Virginia inventor's tiny company, Great Falls-based MercExchange, nearly everything it asked for, and found that eBay's infringement had been "willful," meaning the judge can triple the $35 million award.

While his victory would seem to be a heartwarming underdog tale of David slaying Goliath, many in the tech community have had the opposite reaction, angry at Woolston for besmirching the name of a beloved company with what they see as a bogus claim.

"It bugs me that the debate is so uninformed," Woolston said. "If the patent system isn't there for protection, then innovation is dead. The big guys are just going to come in" and crush small inventors.

Last month, a federal jury in Norfolk ruled that eBay willfully infringed on Woolston's patents, which devised a method for people to buy a product over the Internet for a fixed price. EBay's "Buy It Now" feature, which allows Web surfers to do the same thing, infringes on that patent.

EBay's core auction bidding system, which accounts for the bulk of its revenue, is not affected — Woolston had claimed a patent infringement there also, but the judge tossed that claim out.

Still, the verdict could affect more than 25 percent of eBay's sales, depending on how the judge crafts his final ruling. And he could bar eBay from using its "Buy It Now" feature in its current form, unless it agrees to pay royalties to MercExchange.

On the other hand, he could also set aside the verdict, as eBay's lawyers have urged.

EBay spokesman Kevin Pursglove said the San Jose-based company is focusing on its post-trial motions, which ask for a new trial if the judge refuses to set aside the verdict.

He said Woolston's patents "are illustrative of patents being issued that maybe shouldn't have been issued" and said the case raises questions about the large number of business method patents that were issued in the mid- to late-1990s, when the Internet took off.

Most observers felt Woolston stood little chance of a courtroom victory. And eBay vehemently defended its position, to the point that even Woolston's veteran trial lawyer was taken aback.

"The vigor with which they asserted that this was a frivolous claim would make anyone wonder if maybe we were missing something," said Greg Stillman, a trial lawyer with the Hunton and Williams law firm.

Stillman acknowledged that there is a general skepticism any time a small inventor stands up and claims that a big corporation stole his ideas and methods. But he said that when he reviewed the patents filed by Woolston's company, he knew he was on solid ground.

Woolston bristles at the notion that his patent merely claims an obvious idea. The patents, he said, are complex and detailed, and have now been validated not only by the Patent and Trademark Office but also a jury.

"It's the combination of elements that defines the invention. There are 42 patents on the Post-It note. It's the combination of a not-so-good glue and a pad of paper," Woolston said.