Those students addicted to auctioning their roommate’s clothes on eBay should take notice: the online giant is under attack. At stake are the millions of dollars raked in by the company and the very process people utilize to buy and sell things like Scottish Bowling Badges.
Tom Woolston, head of the company MercExchange, thinks he has a chance to change how eBay auctions everything from a pewter Shih Tzu candle snuffer to a 1939 John Deere tractor.
Woolston and his small Virginia-based company may seem like mosquitoes to be brushed aside, given eBay’s predominant position in the online-auction world.
However, Woolston’s patents for online-auctioneering procedures, based on concepts he dreamed up in law school, may just prove to be a dose of strong medicine eBay can’t take.
“I was there with the technical know-how and ability to see it first,” Woolston told the Associated Press. “We won’t be bullied.”
“If he actually did invent [the patented ideas] before eBay did, then he’s entitled to them,” said University of Wisconsin law professor Pilar Ossorio, who called the quarrel “a typical kind of patent law case.”
With legal action underway, eBay has asserted Woolston actually changed his initial patent, filed in 1995, to reflect their company procedures in subsequent patent claims made in 2000 and 2001. Revising one’s patent is possible, according to Ossorio.
“Sometimes a patent doesn’t cover everything originally invented,” she said. “You can change what’s written, but only to a certain extent.”
Woolston, on the other hand, said the company’s interest in purchasing the patents from him is an acknowledgement of his rightful position as the first to create the auctioneering technologies.
Actual dollar amounts debated have not been made known, but Woolston says the company offered a price in the $100 million range. Woolston’s company sued eBay last September, along with a few subsidiaries, for willful patent infringement. He seeks royalties and a permanent injunction.
Legal battles have been vigorous. For eBay, a loss could spell financial disaster and threaten the company’s position as the globe’s premier online auction house. Founder Pierre Omidyar’s “perfect marketplace” may face a cumbersome future if the courts decide, as they did when Amazon.com sued Barnesandnoble.com over a process patent, that extra steps must be added to the purchasing procedure.
The implications of a decision against eBay will not necessarily make it harder to obtain a used tire from Jeff Gordon’s race car or a leopard-skin ottoman for the average netizen. While a ruling against eBay would be devastating, it probably would not prevent a quick adaptation by the company to maintain user activity; the fluid world of the web seems to flow swiftly around obstacles like intellectual property rights. The most likely impact: one extra click of the mouse for buyers and sellers. Many analysts believe the challenge by Woolston is not even worth following.
“Who knows what the courts will do?” said Rosalinda Baldwin, chief executive of the Auction Guild in New York. “I think he might win.”
