Lawsuit Aims To Milk eBay's Cash Cow For $3.8 Billion

Forbes (blog) - 14 hours ago
July 13, 2010 - 4:53 pm

XPRT, an intellectual property holding company pronounced "expert," filed a lawsuit on Tuesday alleging that eBay's PayPal is infringing on six of its patents related to streamlining online banking.

Forbes could not reach eBay for comment, but lawyers for Kelley Drye & Warren -- the law firm bringing the suit on XPRT's behalf -- say the suit not only involves patent infringement but also the violation of trade secrets. XPRT's 209-page complaint is embedded below.

According to the complaint, XPRT sent eBay a confidential patent application in 2001 that the auction giant later incorporated into its own patent application. "I think the easiest evidence is that the patent office itself has rejected many of the claims based on XPRT's own patents and patent applications," says Steve Moore, a lawyer representing XPRT.

The $3.8 billion request for damages is based on a six percent "reasonable minimum royalty rate" of eBay's PayPal transaction revenues. The complaint alleges that XPRT stands to suffer an additional $3.2 billion in damages before its patents expire.

PayPal represents 36% of eBay's companywide revenues. Its annual revenue in 2009 was $2.8 billion, up 16% year-over-year.

See the complaint at link.