IBM demands $167 million from Groupon for using its patents

Joanna Estrada
July 19, 2018

John Desmarais, a lawyer for IBM, said Chicago-based Groupon arrived "relatively late" to e-commerce and piggybacked on existing technologies.

International Business Machines Corp (IBM) has apparently made a decision to file a lawsuit against e-commerce marketplace operator Groupon Inc., for using its patented technology without authorization. An example of this would be signing into Groupon with a Facebook or Google ID.

"Most big companies have taken licenses to these patents", Desmarais said.

What just happened? Back in 2016, IBM sued Groupon over the alleged infringement of four of its patents.

Groupon's lawyer reportedly argued that IBM exceeded the coverage of its patents and claimed ownership of fundamentals of the internet. 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.

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". IBM says it also patented the "single sign on" technology that lets web users sign into retailers' sites using their Facebook or Google accounts, while the fourth patent relates to authentication. A separate patent describes how to show applications and ads while reducing strain on servers.

Early this year IBM sued Expedia accusing that the travel portal has been infringing on several of IBM's patents for some years now.

Hadden countered IBM was unreasonably seeking money from every significant internet company.

"We understand the challenges Groupon faced in trying to become profitable, but that does not give it the right to infringe on our IP rights as innovators", said Doug Shelton, spokesperson for IBM, in an email statement. "We are here because IBM has another business that IBM does not talk about in its commercials", he said.

Other reports by Click Lancashire

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