eBay 2007 Annual Report Download - page 111

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In February 2007, our StubHub subsidiary was sued in the U.S. District Court for the Central District of
California (No. CV-07-1328) in a purported class action lawsuit alleging that StubHub violated the Fair and
Accurate Credit Transaction Act by allegedly printing receipts containing more than the last five digits of a credit
card number or the expiration date of a credit card by showing the same on an on-screen receipt. The complaint
seeks compensatory and punitive damages and attorneys fees. We believe that we have meritorious defenses and
intend to defend ourselves vigorously.
In March 2007, a plaintiff filed a purported antitrust class action lawsuit against eBay in the Western District of
Texas alleging that eBay and its wholly owned subsidiary PayPal “monopolized” markets through various
anticompetitive acts and tying arrangements. The plaintiff alleges claims under sections 1 and 2 of the Sherman
Act, as well as related state law claims. The complaint seeks treble damages and an injunction. In April 2007, the
plaintiff re-filed the complaint in the U.S. District Court for the Northern District of California (No. 07-CV-01882-
RS), and dismissed the Texas action. In May 2007, the case was consolidated with other similar lawsuits
(No. 07-CV-01882JF). In June 2007, we filed a motion to dismiss the class action complaint. We believe that
we have meritorious defenses and intend to defend ourselves vigorously.
In May 2007, Netcraft Corporation filed a lawsuit in the Western District of Wisconsin (No. 07-C-0254C)
alleging that eBay and PayPal infringed two of its patents entitled “Internet billing methods.” The suit seeks an
injunction against continuing infringement, unspecified damages, and interest, costs, and fees. In September 2007,
we filed a motion for summary judgment of noninfringement on both patents. In December 2007, the U.S. District
Court for the Western District of Wisconsin entered a judgment granting our motion for summary judgment of non-
infringement on both of the patents that Netcraft asserted against eBay and PayPal. Netcraft Corporation has
appealed the judgment.
In October 2007, PartsRiver filed a lawsuit in the Eastern District of Texas (No. 2-07CV-440-DF) alleging that
eBay, Microsoft, Yahoo!, Shopziila, PriceGrabber and PriceRunner infringed its patent relating to search methods.
The suit seeks an injunction against continuing infringement, unspecified damages, interest, costs, and fees. The
defendants have moved to transfer venue and the parties are conducting discovery. Fact discovery cutoff is
scheduled for July 2009, and trial is tentatively scheduled for October 2009. We believe that we have meritorious
defenses and intend to defend ourselves vigorously.
In October 2007, Flexiworld Technologies, Inc. filed a lawsuit in Western District of Washington
(No. 3:07-CV-05565-BHS) alleging that Skype infringed its patent titled “Apparatus, Methods, and Systems
for Anonymous Communication.” The suit seeks an injunction against continuing infringement, unspecified
damages, and interest, costs, and fees. Flexiworld has not yet served Skype. We believe that we have meritorious
defenses and intend to defend ourselves vigorously.
In December 2007, Klausner Technologies Inc. filed a lawsuit in Eastern District of Texas (No. 2-07CV-525)
alleging that eBay, Apple, AT&T Corp., AT&T Mobility, Comcast Corp., CSC Holdings, GotVoice Inc. and
Simulscribe infringed Klausner’s patent titled “Telephone Answering Service Linking Displayed Data with
Recorded Audio Message” (some of the defendants, but not eBay, are accused of infringing a second Klausner
patent). The suit seeks an injunction against continuing infringement, unspecified damages, and interest, costs, and
fees. Klausner has served its complaint but agreed to an extension of time to answer. We believe that we have
meritorious defenses 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 intellectual property rights. We are subject to additional patent disputes, and expect that we will increasingly
be subject to patent infringement claims as our services expand in scope and complexity. In particular, we expect
that we may face additional patent infringement claims involving various aspects of our Marketplaces, Payments
and Communications businesses. We have in the past been forced to litigate such claims. We may also become more
vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the
Communications Decency Act are interpreted by the courts, and as we become subject to laws in jurisdictions where
101
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)