Does the eBay patent prohibit other websites from doing simple online auctions?


Patent 7,702,540 (2-19-1999) was finally awarded to eBay after 11 years. It reads:

Computer-implement method and system for conducting auctions on the internet


Methods and apparatus for a system for facilitating electronic commerce transactions with a first data storage location for holding information about an item for auction from a first participant in a data packet network, a verification process that verifies the user identification of the first participant in said data packet network, the verification process confirming a user identification before allowing the participant in said data packet network access to place information about an item for auction in the system, a display process for displaying information of the item for auction to a plurality of data packet network users, the display process displaying an advertisement with the item for auction to the plurality of data packet users, an auction process for receiving bids on the item for auction from at least one of said plurality of data packet network users, the auction process also verifying a user identification from said at least one of a plurality of data packet network users before allowing receipt of the bid and a notification process for notifying the plurality of data packet network participants that said bid was accepted by said system.

If I wish to implement a simple online bidding process for items without all the bells and whistles (fixed price, etc.) is that in infringement of that patent?

Or do I have to wait until 2-19-2019 (or get a license from eBay). I'm guessing that a license for a small player like me would be way too expensive.


asked Sep 19 '11 at 10:39
Pete Alvin
126 points
  • You should probably include a summary and some quick details on the patent itself, as I doubt most people will take the time to look it up! – Alex 11 years ago
  • @Alex -- how's that? Make it any clearer? :) – Joseph Barisonzi 11 years ago
  • At the risk of drifting off-topic: I can't believe there's no prior art for this patent. – Laundro Mat 11 years ago
  • Thanks! Haha I guess in the time I wrote that I could have just looked it up myself, didn't realize it was so straightforward :) – Alex 11 years ago

3 Answers


Obviously companies do get sued over patents, but it's rare that it is a smaller startup.

I doubt ebay is going to go around suing all the little guys even if they do have a legit patent. If you have an idea for a start-up I would probably just continue on with it, there are probably some big enough companies out there doing online auctions that they are going to go after first - if they even do anything. And that will either poke holes in the patent or set some precedence that puts a lot of online businesses under ;) Which I doubt will happen.

I wouldn't worry about it (not a lawyer)

You may also be surprised to know that patents are issued for things that aren't patentable. The US gov has given multiple people 'patents' on similar / same things... which once someone sues someone it comes to light during more detailed patent searches and they find someone who filed something sooner, or find 'prior art' to make that part of the patent void. I imagine the ebay one had been reviewed in quite some detail, but other patents are issued when another filed patent covers something similar.

answered Sep 19 '11 at 23:14
Ryan Doom
5,472 points
  • "You may also be surprised to know that patents are issued for things that aren't patentable." Functionally, that doesn't matter. The patent holder can still claim infringement and demand damages or licensing, and to prove the patent is invalid requires either a patent review request or a trial and those may harm the small company financially--often gravely. There is a lot in the news about this issue nowadays. – Chelonian 11 years ago
  • I think what we have seen in the last 6 - 12 months is that once you have something that is worth something you are going to have a patent troll come out after you. I think the probability of legitimately worrying about this patent is small. Paul Graham of Y Combinator has been trying to curb some of the ridiculousness that is patent law right now: - Mark Cuban has some good words on patents - Pete, just do it ;) *not a lawyer* – Ryan Doom 11 years ago
  • Ran into this yesterday. More examples of how terrible the patent system is: Doom 11 years ago


5 words: talk to a patent lawyer. Good luck.

answered Sep 19 '11 at 22:50
A. Garcia
1,601 points


The legal power/teeth in a patent rest in its claims section. For this particular patent see these:

answered May 4 '12 at 10:34
Henry The Hengineer
4,316 points

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