IBM to sue Groupon for $167m over e-commerce patent infringement

IBM is suing coupons site Groupon for $167m over allegations the company used patented technology without permission.

IT giant IBM argues that Groupon infringed its patent by using e-commerce technology which it had licensed to other companies including Amazon, Facebook and Google parent firm Alphabet for between $20m and $50m each.

IBM is asking jurors to award the company $166.5 million for using four patented technologies. That figure is expected to be a point of contention throughout the trial in U.S. District Court in Wilmington, Delaware.

John Desmarais, a lawyer for IBM, said Chicago-based Groupon arrived “relatively late” to e-commerce and piggybacked on existing technologies. Many companies, including Inc. and Facebook Inc., have bought licenses to use the company’s patented technology, while Groupon hasn’t, he said.

“The new kid on the block refuses to take responsibility for the technology it’s using,” Desmarais said. “IBM spends literally billions of dollars every year on research and development to make our lives easier.

However, Groupon say IBM is wrongly interpreting the scope of its patents and claiming ownership over basic technology which is vital for the Internet to function.

David Hadden, a lawyer for Groupon, said IBM doesn’t use the patents in question, which he says are invalid. IBM uses its “huge stock” of patents “as a club” to ensure that any company doing business on the web must go through IBM, he said.

“We are here because IBM has another business, a business it doesn’t talk about in its TV commercials,” Hadden said.

The trial is expected to last two weeks as IBM executives go into detail about the company’s licensing agreements with the likes of Amazon and Google.

IBM sued Groupon back in 2016 over the company infringing four patents.