Court upholds Microsoft loss and orders more investigation into eBay false advertising claims

In December of 2009, A Federal Appeals court upheld a ruling against Microsoft in a long running patent battle between the software giant and a small Canadian firm called i4i. At the heart of the dispute was a feature in Microsoft's massively popular and profitable Office software.

Along with upholding the initial ruling against Microsoft and the $290 million judgment against the company, the appeals court also issued an injunction against the sale of Word and Office 2007 versions that were found to be infringing the i4i patent. Microsoft appealed the ruling to the U.S. Court of Appeals for the Federal Circuit asking for a rehearing by all 11 judges. The court denied Microsoft's request today reports

Microsoft isn’t done fighting the injunction yet though. Microsoft could take the case to the U.S. Supreme Court or make a new request to the Appeals Court for another hearing on the ruling. Since the ruling was issued, Microsoft has removed the feature at the heart of the case from current versions of Office and Word.

I4i Chairman Loudon Owen said, "This has been a long and arduous process, but this decision is a powerful reinforcement of the message that smaller enterprises and inventors who own intellectual property can and will be protected."

Microsoft issued its own statement saying, "We're disappointed with the decision. We continue to believe there are important matters of patent law that still need to be properly addressed, and we are considering our options for going forward."

EBay has found itself in court as well in a case that was originally filed by Tiffany & Co. The original suit alleged that eBay was ignoring the sale of counterfeit Tiffany jewelry on its website. EBay won the original case with the presiding judge stating, "It is the trademark owner's burden to police its mark and companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites."

Tiffany appealed the decision and the U.S. appeals court has again ruled in favor of eBay in the case. However, the court did order that more review of Tiffany's claims of false advertising be conducted. EBay maintains that it spends millions to track down, stop counterfeiters, and remove listings for goods that violate rules or law. Tiffany has stated that it will consider appealing the ruling to the U.S. Supreme court. The jewelry company stated that the ruling "leaves in place a prior ruling which allows eBay to profit from counterfeit sales."

The appeals court opinion on the ruling read, "It is true that eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did, and that is in part why we conclude that eBay did not infringe Tiffany's mark. But eBay did affirmatively advertise the goods sold through its site as Tiffany merchandise."

An accusation of false advertising was leveled against eBay by Tiffany because the eBay website advertised Tiffany goods, but many of them were counterfeit items. This decision by the appeals court was in contradiction to the original ruling of the district court that found eBay's ads were not likely to confuse customers.

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