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Online auctioneer eBay Inc. asked for a new trial Tuesday on claims the company stole ideas for an electronic marketplace from a Virginia inventor. A lawyer for eBay said a federal jury was instructed improperly before it found the company had infringed on two patents held by MercExchange, headed by Thomas Woolston. The jury ruled against eBay after a monthlong trial last year, and a judge ordered the company to pay Woolston $29.5 million. On appeal, lawyer Jeffrey G. Randall argued that the jury got incomplete instructions about the date that Woolston said he came up with ideas for processing sales over the Internet. “Despite the fact that we had a dispute about the date of invention, the jury had no legal framework,” Randall argued before a three-judge panel of the U.S. Court of Appeals for the Federal Circuit. Separately, Randall argued that the lower court findings were wrong because the patents held by Woolston’s company cover aspects of sales deals, basically the transfer of legal title and ownership, that have no part in an eBay transaction. The Web service’s 60 million users must register and agree to abide by the auction house’s rules, including a strict promise to complete any agreed sale. The service gets a cut of sales between private individuals but never touches the merchandise. MercExchange lawyer Scott Robertson said eBay’s complaint about the jury instructions is a “red herring. The jury did not need to be instructed on something that is of no consequence.” As for the title-transfer issue, Robertson said eBay was trying to have it both ways. The company signed off in the lower court on descriptions of the patent claim that contain the language the company objects to now, Robertson said. At issue is how eBay conducts sales of fixed-price merchandise, which accounts for roughly 26 percent of the auction house’s sales. Rather than wait for the online bidding to close, a process that can take days, buyers can sometimes click a “Buy It Now” button and pay a set price. In his original suit, Woolston claimed that eBay’s primary auction bidding system infringed on his patents, but the federal trial judge threw out those claims. After last year’s trial, eBay said it would install design changes that would avoid infringing on MercExchange’s patents, even while pursuing the appeal. The auction service also asked the Patent and Trademark Office to re-examine the patents. Woolston filed for the patents in 1994, the year before eBay founder Pierre Omidyar spent a long weekend setting up what became the eBay Web site. Woolston has said eBay approached him about buying his patents, while the company said Woolston came to them. The talks went nowhere, and Woolston sued in 2001. Woolston, an engineer, had careers in the military, the National Security Agency and the CIA before starting MercExchange in Great Falls, Va. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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