IBM wants $167 million from Groupon via lawsuit on misuse of patented technology

Jul 17, 2018, 8:00 am

Aniruddha P.

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IBM asked an American Jury to grant a fine of $167 million from Groupon in a lawsuit that accuses the latter on using patented technology without authorization.

According to IBM lawyer John Desmarais, eCommerce market operator Groupon infringed certain patents on foundational eCommerce technology. This technology is already licensed to the likes of Facebook, Amazon, and Google in return to between $20 million and $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. – John Desmarais, IBM lawyer

On the other hand, Groupon J. David Haggen said that IBM misinterpreted the scope of the patents and that the company had claimed ownership of certain parts of the internet. He was straightforward: “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.”

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.

Now, an IBM executive is required to testify in the trial on licensing agreements with the tech firms like Google and Amazon. The two-week trial will expect the executive to provide information on IBM’s attempts to draw revenue from its patent portfolio.

The allegation of IBM on Groupon came in 2016 over four patents. Two of these are regarding Prodigy, which had been a forerunner of the internet in the late 1980s. Prodigy is a system that shows apps and ads that reduce server loads. IBM was one of the several companies to have developed this system.

We are here because IBM has another business that IBM does not talk about in its commercials. In that business IBM uses its huge stock of patents as a club to get money from other companies. – J. David Haggen

Desmarais added that IBM had to sue Groupon after the Chicago-based company refused to negotiate a licensing deal. Hadden directly countered by saying that IBM was seeking money from the internet companies unreasonably.

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