IBM Sues Groupon on $167-Million Patent Infringement Suit

Groupon Inc created its online coupon business using International Business Machines Corp.’s e-commerce inventions without seeking any permission, stated the lawyers of IBM at the beginning of a federal trial.  IBM is now seeking damages for patent infringement.

IBM is requesting jurors to give the company $166.5 million for using four patented technologies.  This figure is expected to be a point of debate throughout the course of the trial in US district court in Wilmington, Delaware.

John Desmarais, who is IBM lawyer, told jurors that the patents described foundational e-commerce technology, which have already been licensed to Amazon Inc, Facebook Inc, and Alphabet Inc’s Google for between $20 million and $50 million per company.

“Most big companies have licenses to these patents,” Desmarais stated.  “Groupon has not.  The new kid on the block refuses to take responsibility for using these inventions.  IBM spends literally billions of dollars every year on research and development to make our lives easier.”

Meanwhile, David Hadden, who is a lawyer for Groupon, stated that IBM doesn’t really use the patents in question, which Hadden says are invalid.  He said that IBM was overreading the scope of its patents, adding that the corporation was claiming ownership of the building blocks of the internet.

“A key question for you in this case is whether these patents cover the World Wide Web,” said Hadden to the jurors.  “They do not and that is because IBM did not invent the World Wide Web.”

Hadden also pointed out that IBM uses its “huge stock” of patents “as a club” to ensure that each company doing business on the web must go through IBM.

“We are here because IBM has another business, a business it doesn’t talk about in its TV commercials,” stated Hadden. “In that business, IBM uses its huge stock of patents as a club to get money from other companies.”

The case will be closely watched in the marketing and online advertising sector.  At least 10 companies intervened in the lawsuit.  Such companies include Go Daddy Operating Co. LLC, LinkedIn Corp, and Twitter Inc, all asking to protect information related to prior IBM patent deals.

Two of the patents, of which one has already expired, came out of the Prodigy online service, which launched in the latter part of 1980s and predated the web.  Another one expired in 2016 and is related to preserving information is continual conversation between clients and servers.

The fourth patent has something to do with authentication and expires in 2015.  This is the latest among the case’s patents.

The New York-based IBM has hit a confidential settlement in December 2017 with Priceline.com, which part of Booking Holdings Inc, on three of the same four patents.  US District Judge Leonard Stark ruled in October that Priceline didn’t infringe the fourth patent.  Judge Stark is also presiding over the IBM-Groupon case.

IBM has won most US patents in each of the previous 25 years.  The corporation reported $1.19 billion in intellectual property licensing revenue last year.

HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can open an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.