AT&T Sues PayPal, eBay For Secure Payment Infringement

AT&T has sued eBay and its PayPal unit, accusing the online auction kings and their payment processing subsidiary of violating a claimed AT&T patent on secure online payments, the long-distance telephone company revealed November 20.

AT&T is said to be seeking a permanent injunction against eBay and PayPal from using the technology, and for the profits and revenues generated by the technology's use, not to mention compensatory damages.

The patent in question covers transactions by an intermediary processing secure payments by communications systems like the Internet, according to Reuters.

AT&T's filing in federal court says the company told PayPal and eBay over a year ago they were using the technology which AT&T claimed to patent in 1994, and offered to license the technology to each as an individual entity, though neither has agreed to pay for any such license, Reuters added.

AT&T claims financial suffering since it was unable to sell the technology, not to mention that eBay's transaction fees for using PayPal generate significant revnue for the online auction giant, Reuters said. Neither eBay nor PayPal commented when reached by Reuters November 20.

The long-distance company asked the court for a permanent injunction preventing eBay and PayPal from using the technology. It also asked for the profits and revenues the companies gained from its use, and an award of compensatory damages.