Menu
Groupon accuses IBM of “shaking down” other tech companies

Groupon accuses IBM of “shaking down” other tech companies

Big Blue accusing Groupon of infringing four basic internet technology patents

A lawyer for discount e-commerce company Groupon told a court in Delaware that IBM has shaken down practically every large tech firm for patent fees.

IBM is suing Groupon for US$167 million, accusing it of infringing four basic internet technology patents, in a case that is being closely watched by the tech industry.

Big Blue 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But Groupon is defending itself by trying to portray IBM as using outdated patents to squeeze money out of other tech companies with threats of litigation.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 licensing executive Thomas McBride in federal court.

"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.

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 licensing deals with Yelp and Airbnb.

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

Earlier, 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 US$20 million to US$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."

(Reporting by Jan Wolfe; Editing by Anthony Lin and Rosalba O'Brien)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags GrouponIBM

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments