Innovate! Technology sued an eBay seller for violating their intellectual property. However the real issue seems to be that the seller was selling Innovate!’s products for less than the official price list. So, Innovate! Technology sued. Then, they pushed eBay to get involved, and get involved they did. eBay fired back with a suit for damages claiming that the company has been filing bogus DMCA requests with eBay.

From eBay’s countersuit:

Innovate has repeatedly filed notices of claimed infringement (”NOCI”) alleging that the sale . . . of Innovate products infringes Innovate’s intellectual property rights when in fact Innovate does not have a good faith belief that its intellectual property rights have been violated.

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Instead, [the NOCI] are an effort by Innovate to impede the legitimate re-sale of Innovate product by bona fide purchasers . . . by knowingly misrepresenting itsintellectual property rights in an attempt to manipulate the secondary product market/s through artificially higher prices. Upon information and belief, to date, Innovate’s conduct has improperly caused the removal of more than 100 listings from the eBay website.

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Innovate’s practices prevent buyers from purchasing genuine items at the best prices the market will bear.

Source: http://pubcit.typepad.com/clpblog/2008/01/ebay-strikes-ba.html