EBay Gets Served: $3.8 Billion Patent Suit

The lawsuit was filed Tuesday in the U.S. District Court for the District of Delaware. It alleges that XPRT shared confidential technology information about e-commerce payments with PayPal that is contained in six different XPRT patents.

The lawsuit further alleges that the technology, now in use by PayPal, was incorporated by eBay into a 2003 patent of eBay's called "Method and System to Automate Payment for a Commerce Transaction."

EBay was in confidence when XPRT shared the measures, according to a statement from XPRT and the law firm Kelley Drye and Warren, which is representing XPRT.

"EBay incorporated such inventive concepts and ideas into its auction payment process during current California gubernatorial candidate Meg Whitman's tenure as eBay's CEO," the statement reads. "EBay's unauthorized incorporation was a misuse of inventors' confidential and proprietary material."

One of XPRT's inventors contacted eBay in 2001, the suit alleges, to inquire about eBay's interest in XPRT's technology. XPRT never received an indication from eBay that it was interested in the technology, after which, in 2002, eBay announced plans to buy PayPal.

EBay, the complaint alleges, benefited "enormously" from XPRT's information.

In a statement sent to numerous news sources late Tuesday, eBay wrote: "We are reviewing the complaint filed today. We believe it is without merit, and intend to defend ourselves vigorously."

Along with PayPal, other eBay subsidiaries such as Shopping.com StubHub and BillMeLater are also named in the lawsuit as defendants. The suit further charges eBay with misappropriation of trade secrets.