As part of the agreement, eBay will buy three patents for e-commerce from its adversary, along with some additional assets. Financial terms of the deal were not disclosed.

In 2001, MercExchange, a tiny Virginia company, sued San Jose online giant eBay in federal court for allegedly infringing on its patents that allow consumers to buy products online for a fixed price. The case centered on eBay’s “Buy it now” button, a popular feature for shoppers who prefer to buy products outright rather than bidding in an auction.

It’s probably worth pointing out how the Bits blog at the New York Times described MercExchange:

Every big high-tech company, it seems, has at least one intellectual property adversary whose job is to harass the firm to the ends of the legal system, if not the earth itself.

For the e-commerce giant eBay, it was MercExchange, a Virginia-based intellectual property company whose business is asserting patent rights in courts against large companies.

If you really want to, you can read one of the patents here.

This patent essentially describes an auction run by a computer on the Internet, using a computer database, that “is terminated when the auction process reaches predetermined criteria.” Of course, it takes 16 pages to describe this in the patent.