By Richard Stobbe

A patent owner notices that knock-off products are listed for sale on eBay. The knock-offs appear to infringe his patent. When eBay refuses to remove the allegedly infringing articles. The patent owner sues eBay for patent infringement, claiming that eBay is infringing the patent merely by hosting the listings, since listing the infringing articles amounts to an infringing “sale” or an infringing “offer to sell” the patented invention.

These are the facts faced by a U.S. court in Blazer v. eBay Inc. which decided that merely listing the articles for sale does not constitute patent infringement by means of an infringing sale, where it’s clear that the articles are not owned by eBay and are not directly sold by eBay.  In fact,  in the eBay model the seller makes a sale directly to the buyer – eBay can be characterized as a platform for hosting third party listings, rather than a seller.  

Some interesting points arise from this decision:

• Prior patent infringement cases involving Amazon and Alibaba have suggested that the court will look closely at how the items are listed. For example, in those earlier cases, the court noted the use of the term “supplier” to describe the party selling the item, whereas the word “seller” is used in the eBay model. The term “supplier” might be taken to mean that the listing party is merely supplying the item to the platform provider, such as Amazon or Alibaba, who then sells to the end-buyer. Whereas the term “seller” identifies that the listing party is entering into a separate transaction with the end-buyer, leaving the platform provider out of that buy-sell transaction.
• The court in Blazer was clear that it will look at the entire context of the exchange to determine not only if an offer is being made, but who is making the offer.
• The “Terms of Use” or “Terms of Service” will be scrutinized by the court to help with this determination. The eBay terms explicitly advise users that eBay is not making an offer through a listing, and eBay lacks title and possession of the items listed.

Related Reading: eBay Not Liable for Listing Infringing Products of Third-Party Sellers – Not an Offer to Sell by eBay

Calgary – 07:00 MT