EBay settles 7-year dispute over patents

SAN FRANCISCO -- Online auctioneer eBay settled a seven-year patent dispute Thursday with tech firm MercExchange, ending a legal entanglement that prompted a Supreme Court ruling on intellectual property.

MercExchange sued eBay in 2001, claiming eBay infringed on its patents. A jury ruled in MercExchange's favor in 2003. A judge in December upheld the $30 million judgment, which eBay appealed. The appeal was dropped as part of the settlement, eBay says.

EBay says it does not expect the settlement to affect financial results. It reports first-quarter results in April. The settlement comes amid significant changes at eBay. John Donahoe succeeds longtime CEO Meg Whitman on March 31 as the company jousts with market rival Amazon.com.

The announcement was made before markets closed. EBay shares dipped 1% to $27.27 Thursday.

"It seemed like the right time to put it behind us," Thomas Woolston, MercExchange's founder and inventor, said in a telephone interview.

MercExchange claimed in a lawsuit that eBay's "Buy It Now" option, which lets sellers make items available at set prices, infringed on MercExchange patents. The lawsuit led to a Supreme Court ruling in 2006 that judges do not necessarily have to block a technology from being used when a jury finds a patent violation.