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A federal judge in Wisconsin rejected a patent holding company’s patent infringement lawsuit against eBay Inc. auction company and its PayPal Inc. payment transaction subsidiary and granted summary judgment to the defendants. Plaintiff Netcraft Corp., which describes itself as a Delaware-incorporated company, claimed that eBay and PayPal infringed on Internet billing patents. Netcraft Corp. v. eBay Inc., No. 07-254 (W.D. Wisc.) In a ruling filed on Dec. 18, judge Barbara B. Crabb held that the defendants do not infringe on Netcraft’s patents because they do not provide their customers with Internet access. The plaintiffs’ patents note that the patents involve an Internet billing system where the provider “creates access to the Internet for the customer.” “Because it is undisputed that defendants do not provide their customers with Internet access, I conclude as a matter of law that defendants do not literally infringe plaintiffs’ asserted claims,” wrote judge Crabb. The judge recognized and followed well-established principals on patent claims at the U.S. Court of Appeals for the Federal Circuit, said Morgan Chu, a partner at Los Angeles-based Irell & Manella who represented eBay and PayPal. “EBay has the greatest of respect for intellectual property laws, but when a claim is made and doesn’t have merit, it defends itself vigorously,” Chu said. Michael Kane, a principal at Fish & Richardson’s Twin Cities office in Minneapolis said his client Netcraft Corp. was “quite surprised and disappointed in the ruling.” Kane said the patents’ inventor is in the Boston area and Netcraft is not an operating company. “We strongly disagree and we’re working on our appeal,” Kane said.

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