EBay faces £2.5bn suit in payment systems spat

EBay is being sued for at least $3.8 billion (£2.5 billion) by a company that has accused the online auctioneer of infringing six patents to develop its lucrative PayPal payment systems.

According to the complaint filed by XPRT Ventures in the federal court in Delaware, eBay allegedly stole information shared in confidence by the inventors on XPRT’s own patents, and incorporated it into features in its own payment systems, such as PayPal Pay Later and PayPal Buyer Credit.

XPRT said that when eBay on 30 April 2003 filed a patent application titled Method and System to Automate Payment for a Commerce Transaction, it failed to tell the US Patent and Trademark Office it knew of XPRT’s own patent applications.

By filing for a similar patent, eBay “admitted the patentability of the inventors’ claims,” the complaint said, with lawyers also alleging theft.

“This involves a trade secret theft, along with sheer patent infringement,” said Steven Moore, a partner at the Kelley Drye & Warren law firm representing the plaintiff. “It is bad enough to take someone’s technology, but it is a bit much to use it in your own patent application.”

EBay chose not to comment.

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