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EBay Inc. suffered a blow Wednesday when the U.S. Court of Appeals for the Federal Circuit upheld a patent infringement verdict against the company and said MercExchange LLC could pursue a permanent injunction against its fixed-price sales feature. However, the court found that a second patent issued to MercExchange was invalid. MercExchange attorney Scott Robertson, a partner at Washington, D.C.’s Hunton & Williams, said the patent found to be infringed upon implicates “35 percent of eBay’s overall revenue.” But eBay spokesman Hani Durzy said the company’s fixed price sales “account for about 31 percent of total gross merchandise volume for the fourth quarter of 2004.” EBay downplayed the impact of the ruling. “We believe that any injunction that might be issued by the district court with respect [to the infringed patent] will not have an impact on our business because of changes we have made following the district court’s original verdict,” the company stated in a release. A federal jury in Virginia awarded MercExchange $35 million in May 2003. A district judge subsequently reduced the verdict to $29.5 million. Robertson said the Federal Circuit’s decision covers $25 million of the award. MercExchange is enforcing the patents of inventor Thomas Woolston. The patent eBay was found to infringe pertains to a system for selling goods through an “electronic network of consignment stores.” Robertson said his client has licensed the technology to uBid Inc. and is working with the online auctioneer “to build a better, cheaper, faster eBay.” EBay has another shot at freeing itself of the patent dispute. The U.S. Patent and Trademark Office is re-examining the MercExchange patents. EBay attorney Jeffrey Randall, a partner in Skadden, Arps, Slate, Meagher & Flom’s Palo Alto, Calif., office, could not be reached for comment.

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