Skip to main content

IBM Beats Up Groupon in Patent Battle

By William Vogeler, Esq. on July 31, 2018 | Last updated on March 21, 2019

Groupon attorneys tried to portray IBM as a big fish gobbling up little fish in the sea.

But jurors liked the tech giant's story better: little fish bottom-feeding on leftovers from the big fish. They awarded IBM $83 million against the coupon company for infringing on its patents.

Groupon says it didn't do anything wrong. But that's what happens in litigation, and everybody has a fish story.

Willful Infringement

For IBM, it was a pretty big one that didn't get away. The company wanted $167 million for willful infringement, but it still made a point.

"IBM invests nearly $6 billion annually in research and development, producing innovations for society," IBM spokesman Douglas Shelton said. "We rely on our patents to protect our innovations."

Groupon's people said they didn't infringe on anything. As the 10-day trial ended, they argued IBM was using outdated patents to squeeze money out of smaller companies.

The dispute centered on patents IBM developed in the 1980s. Groupon said it was old technology, and refused to pay licensing fees.

'No Choice'

According to testimony, Amazon, Facebook, Google, and other companies had licensed the technology. They paid between $20 million and $50 million each for it.

IBM lawyer John Desmarais said the company had "no choice" but to sue after Groupon refused to pay for using the patented tech.

Reuters reported that IBM generated about $1.2 billion from its licenses in 2017.

Related Resources:

Copied to clipboard