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eBay Q2 earnings hit by lawsuit

Profit affected as patent cases roll in...
Written by Jo Best, Contributor

Profit affected as patent cases roll in...

A spate of patent lawsuits is set to plague eBay in the coming months with one such legal battle already having a negative impact on the online auctioneer's bottom line. The company has lost an ecommerce patent infringement suit to MercExchange, which claimed eBay lifted some of its work for its Buy It Now feature. The result of the case is that the web auction behemoth will have to pay $30m to MercExchange – a sum that has made a dent in its profits, according to a report from Reuters. The company's results will now take account of the $30m charge and a $12m tax-related benefit. Its profit for the quarter ending 30 June had been around $110m but will now be just $92m – a revision of around 16 per cent. And the litigation is set to keep on coming. First Bank USA N.A. has claimed that eBay infringed two of its credit card transactions patents. The case is scheduled to reach court early next year. The company itself warned that it expects to be increasingly seen in the dock over patents. eBay said in a filing to the US Securities and Exchange Commission: "We expect that we will increasingly be subject to patent infringement claims as our services expand…In particular we expect that [such claims] involving services we provide, including various aspects of our payments business, will continue to be made." eBay has no plans to alter its projected financial results for the coming quarters and intends to appeal the MercExchange case.
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