The Software IP Report

Online Listing = Offer for Sale for Patent Infringement?

By Charles Bieneman

Categories: 35 U.S.C. §§ 102, 103, The Software IP Report

Robert Blazer sued eBay alleging that a product listed by an eBay seller was liable for patent infringement (directly, contributorily, and by inducement).  eBay successfully moved for summary judgment on the ground that it had not offered the accused product for sale, as required to maintain an action for patent infringement under 35 U.S.C. § 271(a).  Blazer v. eBay, Inc., Case No. 1:15-CV-01059-KOB (N.D. Ala. March 20, 2017).

The listing on eBay, the court explained, undoubtedly was an offer to sell the accused product.  But who was the offering seller?  Blazer argued that eBay was, citing 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373 (Fed. Cir. 1998).  That case had explained that the purpose of Section 271(a) was to stop a party from “generating interest in a potential infringing product to the commercial detriment of the rightful patentee.”  But 3D Systems had been questioned by subsequent cases, such as Rotec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246 (Fed. Cir. 2000), which clarified that whether an offer for sale had been made should be “interpreted according to its ordinary meaning in contract law.”

In the end, the present case was distinguishable from 3D Systems because

the context of an exchange on eBay demonstrates that no reasonable consumer could conclude that by bidding on an eBay listing, he was accepting an offer from eBay itself. eBay’s terms of service explicitly advise users that eBay is not making an offer through a listing, and, unlike the situation in 3D Systems, eBay lacks title and possession of the items listed. Accordingly, the court in 3D Systems never had to wrestle with the question of who precisely was making the offer; the only question was whether there was an offer at all. Understandably, the court provided a succinct general formula: price plus description equals offer for sale. But such a calculation does not consider all relevant variables of the “offer” analysis and is not well-suited for these facts. By finding eBay’s listings are not offers to sell from eBay, the court is not “exalt[ing] form over substance,” but is rather simply drawing the only reasonable conclusion from the undisputed facts presented to the court.

Blazers’s indirect patent infringement claims also failed.  There was no inducement under 35 U.S.C. § 271(b).  While there was no dispute that he had communicated to eBay about his claims, there was no “evidence that eBay has actual knowledge of infringement,” or that it was willfully blind to patent infringement.  The case for contributory infringement under 35 U.S.C. § 171(c) was obviated by the analyses showing no direct patent infringement or infringement by inducement.