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.

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 But Groupon is defending itself by trying to portray IBM as using outdated patents to squeeze money out of other tech companies with threats of litigation.

Advertisement

"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. Samsung Galaxy S26+ Reportedly Listed for Sale Online Ahead of Launch
  2. Deals on iPhone 17, Google Pixel 10 and More During Flipkart Sale
  1. Sony Could Reportedly Delay PS6 to as Late as 2029 Due to RAM Shortage
  2. iPhone 18 Series to Drop SIM Card Slot in Europe to Make Room for Slightly Larger Battery: Report
  3. Poco X8 Pro Spotted on Geekbench With MediaTek Dimensity 8500 Ultra SoC, Android 16
  4. Xiaomi 17, Xiaomi 17 Ultra Global Price Details, Launch Date and Colour Options Leaked
  5. X Building Smart 'Cashtags' to Let Users Check Cryptocurrency Prices in Real-Time
  6. Samsung Galaxy A27 5G Listing on IMEI Database Suggests a Galaxy A26 Successor Is on the Way
  7. Anthropic Inaugurates First Indian Office in Bengaluru, Starts Hiring Local Talent
  8. Apple Tipped to Adopt Samsung's Privacy Display Technology for MacBook Models by 2029
  9. Oppo Find X10 Series Tipped to Launch in H2 2026 With Built-In Magnets for Wireless Charging
  10. AMD and TCS to Co-Develop Helios AI Data Centre Architecture, Deliver 200MW Data Centre Blueprint
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.