AT&T is suing eBay for alleged patent infringement at the online flea market's person-to-person payment subsidiary PayPal.
The telco says the techniques used by PayPal and former eBay P2P subsidiary BillPoint to manage online payments, violate a patent it filed more than a decade ago. The company is seeking an undisclosed amount in licensing fees, arguing that PayPal acts as a 'trusted intermediary' between buyers and sellers who may not know each other.
AT&T says three of its senior engineers filed for a patent that described such a process in 1991. The company says it filed suit after more than a year of negotiations with eBay over licensing fees
EBay, which acquired PayPal in October 2002 and has witnessed a doubling in revenues from the division since, has dismissed the suit as baseless.
The move caps a rough week for PayPal, which has found itself at the centre of a spam e-mail fraud campaign which not only tried to dupe recipients into sending off their personal details but also installed a virus programmed to search for user credit card numbers.