IBM Seeks $167M from Groupon for Infringing Ecommerce Patents

Published on: 17 Jul, 2018

International Business Machines Corporation(NYSE: IBM) asked a U.S. jury to award USD 167 Million in a lawsuit accusing Groupon,Inc. (NASDAQ: GRPN) for using patented technology from several high-end tech companies. IBM’s lawyer, John Desmarais, told the jury in a Delaware federal court that Groupon infringed patents of e-commerce technology licensed to Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), and Alphabet’s Google for USD 20 Million to USD 50 Million per company.

“Most big companies have taken licenses to these patents. Groupon has not. The new kid on the block refuses to take responsibility for using these inventions,” said Desmarais.

Groupon lawyer J. David Hadden argued for the scope of the patent, “A key question for you in this case is whether these patents cover the world wide web. They do not and that is because IBM did not invent the world wide web.”

An IBM executive is expected to appear to testify during the two-week trial of the licensing deals from the large tech companies, with the Company’s efforts to bring in revenue with its large portfolio. IBM sued Groupon in 2016 accusing Groupon of infringing on four patents.

Two of the patents relate to Prodigy, an online service created by IBM in the 1980s, that use a system to show applications and advertisements to reduce server loads. IBM said it patented the “Single Sign On” technology that lets users log into a retailer’s website with their Facebook or Google account.

According to the Reuters report of the case, Desmarais told jurors IBM is a prolific innovator and wants to license its patents on reasonable terms, but had no choice but to see Groupon for refusing to negotiate a licensing deal. Hadden responded that IBM was unreasonably seeking money from every significant internet company. He gave attention to IBM’s other “business” stating, “In that business IBM uses its huge stock of patents as a club to get money from other companies.”

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Andy Liao

Email: Andy@financialinsiders.com

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