At Patent Trial, Groupon Casts IBM as Shaking Down Other Tech Companies

Advertisement
By Reuters | Updated: 20 July 2018 17:51 IST

A lawyer for discount e-commerce company Groupon told a court in Delaware on Thursday that International Business Machines Corp has shaken down practically every large tech firm for patent fees.

IBM is suing Groupon for $167 million (roughly Rs. 1,150 crores), accusing it of infringing four basic internet technology patents, in a case that is being closely watched by the tech industry.

Advertisement

Armonk, NY-based IBM has portrayed itself as an innovator whose licensing fee requests are reasonable in light of its research and development costs. But Groupon is defending itself by trying to portray IBM as using outdated patents to squeeze money out of other tech companies with threats of litigation.

"IBM has approached every significant company in the web technology space asserting patents against them," Groupon lawyer J. David Hadden said during cross-examination of IBM licencing executive Thomas McBride in federal court.

Advertisement

"If someone comes to me and says 'pay me,' I would view that as a demand," Hadden said.

Two of the four patents in the case relate to Prodigy, IBM's late-1980s precursor to the web. IBM's patents describe commonplace internet technology like password management and online advertising.

Advertisement

McBride disputed Hadden's assertion that IBM has approached every major web-based company, but said it had engaged in discussions with companies like Yelp and Airbnb, among others. An IBM spokesman told Reuters it had not reached licencing deals with Yelp and Airbnb.

McBride said licence fees help it recoup the billions it spends on R&D and reach productive arrangements with other innovative companies. IBM has secured more US patents than any other company for the past 25 years.

Advertisement

Earlier on Thursday, McBride described licensing agreements the company has previously struck with Amazon, Facebook, Alphabet's Google , LinkedIn, and Twitter, who have paid IBM fees ranging from $20 million to $50 million each.

Hadden also questioned McBride about IBM sales to so-called "patent trolls," who hold intellectual property solely for the purpose of filing lawsuits and have been widely criticised in the tech industry.

A lawyer for IBM objected to the questioning, saying it was irrelevant, but the judge instructed McBride to answer.

McBride said IBM was "selective" about who it sells patents to and strikes such deals in part to protect itself from trolls.

"If a patent troll wants to buy a patent from us then we insist on a covenant not to sue IBM," McBride said. "We achieve some level of protection from being sued ourselves."

© Thomson Reuters 2018

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: IBM, Groupon
Advertisement

Related Stories

Popular Mobile Brands
  1. OTT Releases of the Week (Mar 30th - Apr 5th): From Aamir Khan's Sitaare Zameen Par
  2. Realme 16 5G Launched in India With Selfie Mirror Feature: Check Price
  3. Best Mobiles Under Rs. 30,000 in India
  4. These Three Pro Models Could Launch as Part of the Motorola Edge 70 Series
  5. OnePlus Nord 6 First Impressions
  6. Google's Next Fitbit Wearable Could Launch Without a Display
  7. Oppo F33, Oppo F31 Pro Launch Timeline, Price Range Leaked
  8. Redmi K90 Ultra Appears on 3C Database With 100W Fast Charging Support
  9. Google AI Pro Subscribers Now Get 5TB of Storage Across Drive, Photos
  1. Apple's iPhone 18 Pro Models May Not Arrive in Classic Black Finish Just Like iPhone 17 Pro, Tipster Claims
  2. Oppo F33, Oppo F31 Pro Launch Timeline, Price Range Revealed in New Leak
  3. Capcom Adds Original Versions of Resident Evil 1, 2 and Resident Evil 3 Nemesis to Steam
  4. Google's Next Fitbit Wearable Could Launch Without a Display; Said to Require Paid Subscription
  5. CFTC-FTX Settlement: Former FTX Executive Nishad Singh to Pay $3.7 Million, Faces Trading Ban
  6. Slack Upgrades Slackbot With New AI Features to Turn It Into an Enterprise Agent
  7. Australia Mandates Financial Services Licences for Crypto Exchanges Under New Bill
  8. DoT Reportedly Extends SIM Binding Mandate Till the End of 2026
  9. Government Migrates 16.68 Lakh Official Email Accounts to Zoho Cloud, Spends Rs. 180 Crore
  10. Infinix Note 60 Pro India Launch Date Revealed; Company Teases Active Matrix Feature on Rear Panel
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.