UPDATED 15:07 EDT / JULY 17 2018

CLOUD

IBM demands $167M from Groupon over alleged patent infringement

IBM Corp. on Monday afternoon asked a jury to grant it $167 million in damages from Groupon Inc. over the deals website’s alleged infringement of its intellectual property.

The request came as part of opening arguments in what is set to be a two-week trial. IBM originally filed suit against Groupon in 2016, alleging that the company infringed four of its patents. IBM had earlier filed lawsuits involving same patents against three other tech companies, including travel deals website Priceline.com, which settled the case.

Part of the intellectual property at issue relates to Prodigy, a precursor to the modern web that IBM helped create in the early 1990s. One of the two Prodigy-related patents covers single-sign-on technology for logging into applications, while the other describes a method of delivering web content and ads. The latter patent has expired, along with one of the other two involved in the lawsuit.

IBM lawyer John Desmarais told the jury that the intellectual property allegedly infringed by Groupon had been licensed to some of the world’s top tech companies. He revealed that Amazon.com Inc., Google LLC and Facebook Inc. were among the buyers, in deals that ranged from $20 million to $50 million.

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

Groupon representative David Hadden argued that IBM’s patents are invalid. “A key question for you in this case is whether these patents cover the world wide web,” Hadden told the jury.  “They do not and that is because IBM did not invent the world wide web.”

IBM maintains a sizable intellectual property licensing business that generated $1.19 billion in revenue during 2017, according to Bloomberg. The company has received more patents than any other firm in each of the past 25 years.

Image: IBM

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