IBM wins $83 million from Groupon in internet patent fight

IBM awarded $82.5M after Groupon is found to infringe on its e-commerce patents

IBM wins $83 million from Groupon in internet patent fight

A DE federal jury on Friday awarded IBM Corp. more than $82 million after finding Groupon Inc. infringed four e-commerce patents that date to the early days of personal computing.

Recent reforms created to fight abuses in the patent system have made it harder for companies to protect their intellectual property, John Desmarais, an IBM lawyer, said in an interview after the verdict.

Friday's verdict cements the prowess of IBM's portfolio of more than 45,000 patents and is a boon to its intellectual-property licensing revenue, which brought in US$1.19 billion in 2017.

"The verdict is a vindication for IBM and a validation of the strength of its e-commerce". In what seems to be a reply to this statement, spokesman for Groupon, Bill Roberts said in a statement reacting to the judgment: "We continue to believe that we do not infringe on any valid IBM patents, to the extent these patents have any value at all - which we believe they do not - the value is far less than what the jury awarded".

"Not paying someone for something you don't use, that's not being reckless", Hadden said. "That's just standing up for what's right".

In March 2016, IBM accused online deals website Groupon of infringing United States patent numbers 5,796,967; 5,961,601; 7,072,849; and 7,631,346.

A third patent was developed as part of the firm's efforts to preserve state information in internet communications, and the final patent in suit relates to single-sign-on technology. The fourth is related to authentication and expires in 2025.

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IMB stressed throughout the trial that a range of companies have paid for licenses to use its patents.

The patented technologies cover online advertising and ways of making it easier for web users to connect to an internet provider, among others. At least 10 companies - including Go Daddy Operating Co.

If the patents had been considered antiquated and not grounds to sue, then this may have cast doubt on the legitimacy of IBM's current cross-licensing deals with other companies - as well as potentially the firm's older portfolio as a whole. The $82.5 million that IBM was awarded is about half of what it had sought in the case. "We are pleased by the jury's verdict".

Groupon, he said, isn't afraid, and believes that "somebody has to stand up".

It is on record that Armonk, New York-based IBM has secured more US patents than any other company.

The case is International Business Machines Corp. v. Groupon Inc., 16-cv-122, U.S. District Court, Delaware (Wilmington).

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