eBay has finally settled the 7 year old patent infringement case filed by MercExchange. The company will be buying the three MercExchange patents it has been accused of violating.

The long dispute over the violation of patent rights by eBay has finally been solved with the company buying the three patents from three MercExchange and Merc in return has agreed to withdraw the cases. The price of the deal has not been disclosed.

"We're pleased to have been able to reach a settlement with MercExchange," Mike Jacobson, eBay senior VP and general counsel, said in a prepared statement. "In addition to resolving the litigation, this settlement gives us access to additional intellectual property that will help improve and further secure our marketplaces."

Great Falls, Virginia based MercExchange had filed a lawsuit against eBay in 2001. It claimed eBay's "Buy It Now" option, which lets sellers make items available at set prices, infringed on MercExchange patents filed in 1995, 1999, and 2001.

MercExchange's founder, a patent lawyer and engineer named Thomas Woolston, had patented technologies related to an electronic network of consignment stores.

In 2003, the jury ruled the case in favor of Merc and awarded $30 million to the company as a compensation for the damages.

eBay tried to fight the judgment and the case went up and back down the U.S. court system. In December 2007, a U.S. District Court ruling concluded that the court lacked authority to consider eBay's motion for summary judgment.

"It seemed like the right time to put it behind us," said Woolston.

eBay claims that the settlement should not have much effect on its 2007 results or January's fourth quarter earnings release.

eBay shares dipped by 1% to $27.27 after the announcement.