PayPal, the heart of eBay's massive e-commerce operation, might
end up costing the company almost $4 billion. A Connecticut company
known as XPRT is suing eBay for $3.8 billion, alleging copyright
infringement of patents for electronic auctions and payments owned
The legal firm of Kelley Drye & Warren filed the complaint in
the U.S. District Court of Delaware, and it accuses eBay of
knowingly stealing and incorporating technology from the patent's
inventors, George Likourezos and Michael Scaturro.
XPRT claims that the two men came to eBay offering to license or
sell the technology for online auctions. Subsequently, the suit
alleges, eBay asked for documents and technical information, then
tried to patent the technology itself, only to have those
applications denied because XPRT already held the patents.
Even if it turns out that the Connecticut firm's case fails on its
merits, it's still going to be a significant headache for the San
Jose, California-based company. In addition, the case adds to
eBay's already significant legacy of bad PR, which includes
allegations that eBay helps its sellers and buyers engage in patent
infringement, counterfeiting, shill bidding and tax evasion.
If there's one piece of good news, it's the $4.5 billion in cash
and securities on the company's books, meaning that even if eBay
does lose, it still has assets to pay a settlement up front.