Being Old Does Not Equate to Being Less ValuableJuly 30, 2018

Last Friday, a Delaware federal jury awarded IBM Corp. more than $82 million after finding Groupon Inc. infringed four e-commerce patents (5,796,967; 7,072,849; 5,961,601; and 7,631,346). These patents relate generally to online customized advertisement services and so-called single-sign-on technology. The oldest patent has a priority date of July 15, 1988 and was granted on August 18, 1998, almost 20 years ago. The newest patent has a priority date of April 1, 2005 and was granted December 8, 2009. Clearly, at least some of the technologies in these patents were conceived before the web and online shopping became a part of our lives.

Groupon argued that it did not infringe on any valid IBM patents and the asserted patents were old and did not have any value for the operations on the World Wide Web currently used not only by Groupon, but many other websites. Obviously, the jury thought otherwise, especially considering the fact that others are paying for them. After about 10 days of trial, jurors found that Groupon willfully infringed the patents. They were ordered to pay $82.5 million, which is about half of what IBM had sought in the case. However, since the jury found that Groupon’s infringement was willful, it is possible that the judge in this case could triple the damage award in coming weeks. IBM filed the suit against Groupon in 2016 after a three-year negotiation for a license agreement failed.

IBM has not just gone after Groupon. They have been waging war with other online businesses over the same patents. Previously, IBM filed a similar case against Priceline Group Inc., now Booking Holdings Inc., which was dismissed following a settlement that included a $34 million payment by Priceline, with an additional contingent payment due. According to IBM, various companies, including Amazon.com and Google, have already paid for licenses to the same patents.

It is good to be reminded that a patented idea or technology still has value despite its old age.

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