According to a patent infringement lawsuit filed in the federal court in Delaware on Tuesday, a Connecticut-based firm named XPRT Ventures LLC has accused the online auction and retail biggie, eBay, of violating six patents for developing the lucrative PayPal transaction system.

Suing eBay for at least $3.8 billion, XPRT Ventures alleged that eBay had knowingly incorporated XPRT’s e-commerce technology, which had been filed for US patents, in its own payment systems like PayPal Pay Later and PayPal Buyer Credit.

Elaborating further, XPRT claimed that its e-commerce technology, which was built into its PayPal’s patent application, had actually been shared, in confidence, with PayPal by XPRT representatives – with the details later being incorporated into eBay’s April 2003 patent application titled “Method and System to Automate Payment for a Commerce Transaction.”

Noting that eBay did not inform the US Patent and Trademark Office about its knowledge of XPRT’s own patent applications, XPRT said that eBay’s unauthorized incorporation of the inventive concepts and ideas into its auction payment process practically amounted to “a misuse of inventors’ confidential and proprietary material.” 

Terming eBay’s actions as “a trade secret theft,” along with sheer patent infringement, Steven Moore, a partner at Kelley Drye & Warren LLP representing XPRT, said: “It is bad enough to take someone's technology, but it is a bit much to use it in your own patent application.”