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IBM demands $167M from deals marketplace Groupon for patent violation

IBM has demanded a settlement of $167 million in its latest lawsuit at US federal court, alleging that e-commerce marketplace Groupon is using IBM’s technology without authorization, reports Reuters.

A legal battle between IBM and Groupon over patents have been going on since 2016, with the IBM accusing that the deals e-com company is violating four of its e-commerce IPs without permission. The same IP has been licensed to  Amazon, Facebook, Google for $20 million and $50 million per company, as per the Reuters report.

IBM told its jury in the US that it seeks to license its patents on reasonable terms and that the company had no choice but to sue Groupon after it refused to negotiate a licensing deal. Meanwhile, Groupon accuses that IBM uses its huge stock of patents as a club to get money from other companies.

IBM’s patents issues

Early this year IBM sued Expedia accusing that the travel portal has been infringing on several of IBM’s patents for some years now. Earlier, in February 2015, IBM had sued travel-related marketplace Priceline for violating IBM’s four patents. The issue was later settled in December 2017, through negotiation and licensing.

IBM, which gave up its PC business in 2004, earns 2% of its revenue from IP licensing, but this stream is a high-margin business for the company, according to this Bloomberg report. In its annual report 2017, it said that “for the 25th year in a row, led the world in US patents earned, setting
a new record of 9,043 (patents).” However, licensing of intellectual property including royalty-based fees decreased 14.1% in 2017 compared to 2016.  The company reported $1.19 billion in intellectual-property licensing revenue in 2017.

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