eBay 2002 Annual Report Download - page 21

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stockholders in connection with PayPal entering into the merger agreement and the exchange ratio in the
merger was unfair and inadequate. The plaintiÅs seek, among other things, an award of unspeciÑed
compensatory damages. We believe that each of the lawsuits is without merit and intend to defend
ourselves vigorously.
Other third parties have from time to time claimed, and others may claim in the future that we have
infringed their past, current or future intellectual property rights. We have in the past been forced to
litigate such claims. We may become more vulnerable to such claims as laws such as the Digital
Millennium Copyright Act and Communications Decency Act are interpreted by the courts and as we
expand into jurisdictions where the underlying laws with respect to the potential liability of online
intermediaries like ourselves is less favorable. We expect that we will increasingly be subject to copyright
and trademark infringement claims as the geographical reach of our services expands. We also expect that
we will increasingly be subject to patent infringement claims as our services expand. In particular, we
expect that patent infringement claims involving various aspects of our Payments business will continue to
be made. We have been notiÑed of several potential disputes and are subject to a suit by Tumbleweed
Communications Corporation that is currently ongoing. These claims, whether meritorious or not, could be
time-consuming, result in costly litigation, cause service upgrade delays, require expensive changes in our
methods of doing business or could require us to enter into costly royalty or licensing agreements, if
available. As a result, these claims could harm our business.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no submissions of matters to a vote of security holders during the fourth quarter ended
December 31, 2002.
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