Online auction site eBay is facing a $3.8 billion patent infringement suit, thanks to its subsidiary, PayPal. According to CNET News, XPRT Ventures alleges PayPal "knowingly incorporated" technology described in six XPRT patents into its 2003 application to patent "a method and system to automate payment for e-commerce transacton."
eBay acquired PayPal in 2002 for $1.5 billion.
The complaint alleges that XPRT Ventures shared the ideas described in the XPRT patents with PayPal in confidence, and that PayPal signed a confidentiality agreement but then incorporated the ideas into its own patent application. Moreover, XPRT claims the confidentiality agreement was "unilaterally altered" to make it appear that PayPal's obligation arose on the same day the patent application was filed, when in fact the duty of confidentiality arose much earlier.
A statement released Tuesday by XPRT's law firm, Kelley, Drye and Warren, said, in part:
eBay's unauthorized incorporation was a misuse of the inventors' confidential and proprietary material....XPRT claims that eBay used XPRT's confidential and proprietary information to modify and incorporate PayPal into its e-commerce platform and to roll out several features incorporated into eBay's payment systems.
The company is asking the U.S. District Court for the District of Delaware for present and future damages.
The newly added patents both concern... technology Apple lists as a "system for real-time adaptation to changes in display configuration."