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eBay shuts down Segway auctions

The auction giant cancels listings for the Segway Human Transporter after being notified by Segway that the auctions "infringed on its intellectual property rights."

! -- eds updated 12 pm --> eBay canceled two auctions for the new Segway Human Transporter on Thursday after Segway questioned whether the auctions were bogus, but the seller said that the sale was legitimate.

The auctions, which went online earlier this week, had drawn interest from a number of people who had missed out on getting a Segway HT through an earlier auction on in February. Before eBay cancelled the auctions, some 28 bids had been placed on one of them, with the price reaching more than $14,000.

In an e-mail eBay sent to John Zuccarino, who bid on one of the scooters, the company said it cancelled the auctions after being notified by Segway that the auctions "infringed on its intellectual-property rights."

"eBay takes no position on the authenticity or authorized nature of such items, but we take appropriate action when requested by a verified rights owner," the auction giant said in its e-mail. "Sellers that feel their listings may have been ended in error have the opportunity to get in touch with the relevant person or company, or contact eBay."

eBay representatives did not return calls seeking comment about why the company cancelled the auction or whether it tried to confirm the legitimacy of the auctions before canceling them.

An organization called the "AI Foundation" listed the two Segway scooters on eBay, but without the participation of Segway itself. eBay began investigating the auctions after Segway warned the auction giant on Wednesday that it thought the auctions were probably illegitimate and that the auctions infringed on Segway's trademarks, said Tobe Cohen, Segway's director of marketing.

"To the best of my knowledge, we can account for all of the units that we have sold to date," Cohen said. "If they do have a machine, it would be a surprise to us."

But AI Foundation spokeswoman Crystal Chibe said the organization has five commercial versions of the Segway HT that were donated to it by Segway customers. Chibe declined to name the companies that donated the scooters, saying the companies didn't want to be associated with the auction.

The AI Foundation, which planned to auction all five of the devices, was in discussions with eBay about publicizing the auctions, so it was surprised when eBay cancelled the auctions, Chibe said. The foundation had not contacted Segway before listing the auctions because it didn't think it needed to, she said.

"It's disappointing that this has all happened," Chibe said. "I suppose we should have contacted Segway prior to the auction, but these things happen."

eBay's promotions coordinator, Leilani Carrara, said she talked with representatives of the AI Foundation before it listed the scooters. The sellers wanted to know basic information about how to list on eBay, Carrara said. Carrara declined to say if eBay was working with the foundation on promoting the auction or whether eBay knew if the auctions were legitimate.

The HT auctions are only the latest questionable items on eBay. Last year, for instance, eBay cancelled an auction for a piece of door allegedly from the scene of the 1999 shooting of Amadou Diallo, an unarmed African immigrant who was shot at least 41 times by New York police officers. Earlier that year, the company closed numerous auctions for pieces of the Mir space station after it crashed to Earth.

Pranks and fraud have been persistent problems on eBay. Earlier this year, the company saw a number of fraudulent auctions set up by scam artists posing as legitimate members. The company has said that less than one one-hundredth of 1 percent of auctions end in fraud. With the sheer volume of auctions on the site numbering in the thousands each day, the potential for fraud exists.

At eBay's annual shareholder meeting on Wednesday, Chief Executive Meg Whitman said the company had put in place new anti-fraud software that was helping the company make major strides against fraud.

But the Segway scooters could make a tempting target for auction fraud or pranks. The hype surrounding the scooters has been intense since the first details on the devices leaked out in late 2000. Segway unveiled the scooters late last year and in February put three of the devices up for auction on Amazon. Bidding on all three scooters topped $100,000, with one selling for a whopping $160,000.

Segway has said that the commercial version of its HT sells for about $8,000. The company also said it will introduce a consumer version of the HT, like those auctioned on Amazon, later this year for about $3,000 each.

The AI Foundation advertised its Segway HTs as special "AI Edition" scooters that it customized. The foundation said that proceeds from the auctions would help fund its "research into the next generation of interactive human devices."

The AI Foundation scooters were hybrids--commercial versions that had been customized, Chibe said. The foundation added emblems of the foundation to the devices and added plush bags instead of the hard plastic ones that come standard with the commercial version, she said.

Despite this, the photo used on the eBay auctions appeared to be that of a standard consumer version of the Segway HT. Chibe acknowledged that the photo did not necessarily show the customized scooters it was selling.

"That may have been just a general picture that was on eBay," she said.

AI Foundation started one of its Segway auctions Monday with a minimum opening bid of $89,000; that auction had not drawn any bids by the time it closed. The foundation launched the other auction Tuesday with an opening bid of $1.

The organization's Segway auctions raised questions from the start.

A search on Google for "AI Foundation" doesn't turn up any related sites. The organization just registered the URL on Tuesday and had been the sub-domain of another site, previously, Chibe said.

The foundation said it registered its eBay user ID earlier this week. The feedback status on the ID was "private," meaning that bidders can't see any previous feedback comments or the seller's feedback rating.

The auction ads mentioned a mysterious "Project X" that the AI Foundation plans to unveil next year at Universal Studios in Orlando, Fla. The winners of the Segway auctions would be invited to attend the unveiling as well as the international debut of Project X next year in Geneva, Switzerland.

Additionally, the wording of the ads appeared very similar to the wording of the previous auctions on Amazon. "The Segway HT is available to the public for the first time through this auction," the ads said, neglecting to mention the previous auctions on Amazon.

Chibe acknowledged the similarities between the ads on eBay and Amazon.

"I wouldn't be surprised if the description of the Segway might have been taken from the Amazon auction," she said. "That might have been why it infringed."

Meanwhile, the AI Foundation promised to engrave with a laser the winner's name and the name of Collin Mallory, the foundation's "chief innovator and visionary." The official Segway auctions on Amazon promised to engrave the winner's name and that of Dean Kamen, the inventor of the HT.

Chibe said Mallory was unavailable for comment Thursday.

eBay bidder Zuccarino was disappointed that the auctions were cancelled. After losing out on the HT auctions on Amazon, Zuccarino had one of the top bids on the scooter auctions on eBay. Zuccarino had hoped to use the devices to help draw visitors to his winery near New York's Lake Seneca.

"Glad I have all eyes open," he said in an e-mail. "Too bad for me. No Segway."