IBM is suing Groupon, a coupons site, for $167 million over allegations that the company made use of patented technology without permission.
IBM. the IT giant, argues that Groupon infringed the company’s patent by using e-commerce technology which the firm had licensed to other companies such as Facebook, Amazon, and Alphabet, the parent firm of Google, for between $20 million and $50 million each.
In a federal court in Delaware, the lawyer who is representing IBM, John Desmarais, said: “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.”
He added: “IBM spends literally billions of dollars every year on research and development to make our lives easier.”
Groupon says, however, that IBM is wrongly interpreting the extent of its patents and is claiming ownership over basic technology which is essential for the Internet to function.
Two of the patents that are involved in the said lawsuit are old intellectual properties that came out of the pre-internet Prodigy online service from the 1980’s. The newest of the bunch is a “single sign-on” technology that allows users to log into a website using their Google or Facebook accounts.
David Hadden, the lawyer of Groupon, stated: “A key question 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.”
Hadden also claimed that the tech giant is using the patents it owns to squeeze money out of other firms. He stated: “We are here because IBM has another business that IBM does not talk about in its commercials.”
He continued: “In that business, IBM uses its huge stock of patents as a club to get money from other companies.”
Bloomberg disclosed that IBM has been winning the highest number of patents in the United States each year over the last 25 years. The publication says that IP licensing is considered as a high-margin business for the firm, however, it still only makes up less than 2 percent of the revenue of the company.
The said trial is anticipated to last for two weeks as the executives of IBM go into detail regarding the licensing agreements of the company with the likes of Google and Amazon.
Back in 2016, IBM also sued Groupon over the infringement of the company of four patents.