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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 by XPRT.

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.

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