IBM sues Groupon for $167 million over its early internet patents

International Business Machines Corp (IBM) has apparently decided to file a lawsuit against e-commerce marketplace operator Groupon Inc., for using its patented technology without authorization. If sources are to be believed, IBM had requested the U.S. jury to award it with a valuation of $167 million in compensation.

John Desmarais, IBM lawyer, informed a jury in a federal court in Delaware about Groupon overstepping patents that describe foundational e-commerce technology which has already been licensed to Facebook Inc., Amazon Inc., and Google’s Alphabet Inc., for an amount between $20 million and $50 million per company.

On the other hand, J. David Hadden, Groupon’s lawyer apparently argued that IBM was claiming ownership of the building blocks of the internet and overreading the scope of its patents.

During the two-week trial, an IBM executive is expected to testify about licensing deals with tech companies like Google and Amazon, providing information about IBM’s efforts to derive profits from its large patent range.

For the record, IBM has more U.S. patents from past 25 years than any other company because of its large investments in research and development. Incidentally, IBM had already sued Groupon in 2016 for violating four of its patents. Out of these four patents, two were issued for Prodigy, an online service that offered access to a broad range of networked services, developed by IBM and many others.

IBM also stated that it has patented a technology called ‘single sign on’ which would allow consumers to log in to a retailer’s website with the help of their Google or Facebook account.

Desmarais said the jurors that IBM is a creative innovator and attempts to license its patents on reasonable terms. IBM was left with no choice but to sue Groupon as it refused to agree on a licensing deal, he further added.