EBay Hit with $3.8 Bln Online Payments Suit

By Geoff Duncan July 14, 2010

Image used with permission by copyright holder

Online auction giant eBay just can’t seem to catch a break: XPRT Venture has filed a lawsuit in Delaware seeking a whopping $3.8 billion in damages, claiming the company stole trade secrets from six XPRT patents and integrated them into its own payment systems. The suit targets PayPal, Mill Me Later, StubHub, and Shopping.com, along with parent company eBay.

The suit dates all the way back to September 2001, when the inventors of the patents (George Likourezos and Michael A. Scaturro) shared the patent-pending information with eBay under assurances of confidentiality. The suit alleges eBay then broke that agreement and used techniques covered in the patents in its own online payment systems. Instead, eBay went ahead and applied for its own patents without acknowledging XPRT’s prior art.

“XPRT claims that eBay’s upper management knew or should have known, that the unauthorized use of Inventors’ confidential and proprietary material ran the risk of patent infringement if XPRT’s patent applications issued as patents,” said attorneys Kelley Drye & Warren—who are representing XPRT—in a statement.

The suit contains nine counts: infringement claims on six XPRT patents, along with claims of conversion, misappropriation of trade secrets, and unjust enrichment.

The lawsuit lands at a particularly awkward time for Meg Whitman, who was eBay’s CEO at the time of the alleged infringement. Whitman is currently mounting a campaign for governor of California.

Former Digital Trends Contributor

Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…

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