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IBM Wants $167 Million From Groupon Over Alleged Patent Infringement (reuters.com)

On Monday, IBM asked a jury to award the company $167 million in a lawsuit against deals site Groupon for using patented technology without authorization. The patents involve e-commerce technology that had already been licensed to Amazon, Facebook, and Alphabet for between $20 million and $50 million per company. "Most big companies have taken licenses to these patents," IBM's lawyer, John Desmarais, said. "Groupon has not. The new kid on the block refuses to take responsibility for using these inventions." Reuters reports: Groupon lawyer J. David Hadden argued that IBM was overreading the scope of its patents and claiming ownership of building blocks of the internet. "A key question for you in this case is whether these patents cover the world wide web," Hadden told jurors. "They do not and that is because IBM did not invent the world wide web."

An IBM executive is expected to testify during the two-week trial about licensing deals with technology companies like Amazon and Google, providing a rare glimpse into IBM's efforts to derive revenue from its large patent portfolio. The Armonk, New York-based company invests heavily in research and development and has secured more U.S. patents than any other company for the past 25 years.

64 comments

  1. Software Patents? by youngone · · Score: 5, Informative
    I hope IBM have their arse handed to them (but they probably won't).

    An IBM executive is expected to testify during the two-week trial about licensing deals with technology companies like Amazon and Google...

    Which will prove only that Google and Amazon didn't challenge the stupid patents, not that they are valid.
    I'm sure Groupon's counsel will have thought of that though.

    1. Re:Software Patents? by DCFusor · · Score: 1

      The great game. Remember who were the good guys in SCO vs the universe?

      --
      Why guess when you can know? Measure!
    2. Re: Software Patents? by Anonymous Coward · · Score: 0

      IBM should have obtained permission from SCO before open sourcing their software...

  2. Patents Suck by pubwvj · · Score: 4, Insightful

    Patents are a bad idea.
    Multiple people come up with the same ideas.
    Nobody should be given exclusive rights to the ideas.
    Software patents are even worse than other types of patents.
    Time to reform the patent system and ban all patents.

    1. Re:Patents Suck by wizkid · · Score: 1

      Patents don't suck.
      Software patents do suck. Software is mathematical, and should be excluded from patent-ability.

      Hardware patents protect the little guy. For example, the little guy thinks up, designs, builds and starts selling a better widget.

      Without patents, the big company, see's it and copies it, and sells it before the little guy can get off the ground. Patents were originally meant to protect the inventor.

      Patents still work for the hardware and other engineers that design hardware type stuff.

      But for software, that builds on other software ( called libraries, etc ) patents do suck.

      --
      I take no responsibility for what I say. Even though I'm never wrong :)
    2. Re:Patents Suck by technosaurus · · Score: 1

      Not all patents. Sometimes they're the only thing keeping brilliant minds like Nikola Tesla's from living in destitution with no means to further explore technology. Certain software that is not obvious to programmers of the day (traveling salesman solution for example) is probably worth a patent as well.

    3. Re:Patents Suck by pubwvj · · Score: 4, Interesting

      I'm an inventor. Believe me, patents suck. The whole system is bad. If people want to make money off their inventions then they should get out there and manufacture, market and sell.

    4. Re:Patents Suck by ShanghaiBill · · Score: 4, Informative

      Hardware patents protect the little guy.

      Plenty of little guys would disagree.

      Without patents, the big company, see's it and copies it, and sells it before the little guy can get off the ground.

      With patents, the little guy can't afford a patent defense, is drowned in legal expenses, and is counter-sued by the big company for infringing other patents in their defensive patent portfolio.

    5. Re:Patents Suck by Motard · · Score: 1

      I'm an inventor. Believe me, patents suck. The whole system is bad. If people want to make money off their inventions then they should get out there and manufacture, market and sell.

      Isn't that what they tried to do before patents?

    6. Re:Patents Suck by Luthair · · Score: 1

      Solutions to TSP are math, math is not patentable.

    7. Re: Patents Suck by Anonymous Coward · · Score: 0

      Well isn't the better solution to reform patent law rather than abolish it then? Just fix laws so they actually do what they were supposed to accomplish in the first place.

    8. Re:Patents Suck by Anonymous Coward · · Score: 0

      A general solution to TSP would be terrific, because none have been found yet, assuming one wants the algorithm to finish before the sun burns out or explodes for all but the smallest problems.

    9. Re:Patents Suck by LynnwoodRooster · · Score: 1

      I like patents. I license some hardware patents to big guys like Microsoft...

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    10. Re: Patents Suck by bool2 · · Score: 1

      Simply stated I agree 100%. Patents need to go. There is no chance of that whilst we're all racing towards globalization + the WTO owns this, not your elected officials.

    11. Re:Patents Suck by Anonymous Coward · · Score: 0

      Not only tried but did.

      Then along came a lazy rent seeker and the rest was history.

    12. Re:Patents Suck by WindBourne · · Score: 2

      Nope. Killing all patents is a HORRIBLE idea. We need patents for things that take a long time to bring to market. Software patents and business methods do NOT. Those are 2 types of BS patents that need to disappear.
      Another that SHOULD be modified are the drug patents. In particular, if the drug does not TREAT a disease, but instead treats a symptom (i.e. a single treatment vs. on-going yearly use ), we should limit it to 5-10 years. OTOH, if it treats a disease, it will be used a whole lot less, and may require a long period of time for payback. As such, leave these at 20 years.

      --
      I prefer the "u" in honour as it seems to be missing these days.
    13. Re:Patents Suck by WindBourne · · Score: 1

      Again, nope. It is far too easy for places like China to simply dump on a market. As such, a patents are needed and actually need to be reinforced against the retailers that bring in criminal knock-offs. Note that BOTH Walmart and Target actually use the laws against inventors. They will both tell you that unless you sell it to them at pretty much costs, they will simply use 1 or more of 7 different Chinese manufacturers to destroy you.

      --
      I prefer the "u" in honour as it seems to be missing these days.
    14. Re:Patents Suck by Anonymous Coward · · Score: 0

      Invent, manufacture, and sell a product on Amazon. Be astonished a couple weeks later when some other entity starts selling the item on the same listing for less than the manufacturing cost you are paying.

    15. Re:Patents Suck by Theaetetus · · Score: 1

      Multiple people come up with the same ideas.

      That's why the patent system exists. Not to reward people with exclusivity over ideas, but to encourage the destruction of trade secrets and advance the public domain. If you've got a hundred companies with a hundred engineers each working in secret for a hundred hours to invent the same widget and then keeping it tied up in draconian contracts and NDAs, you've spent 10,000 man-hours. But if you encourage the first guy to invent it to publish details of the widget, in exchange for a time-limited monopoly, then you've only spent 100 hours, and you can spend the remaining 9,900 hours on the next invention.

      If only one person ever came up with an idea, then that encouragement would be moot because there's no time savings from them educating other engineers.

    16. Re:Patents Suck by Anonymous Coward · · Score: 0

      Again nope. It is far too easy for places like America to simply pretend to have invented something when most patents are for obvious nonsense that should never passed the patent office's first step. Patents are a cash cow for governments awarding patents for trivial obvious things just to collect the fees. Of course the lawyers also love this as it creates a virtual goldmine of work for them to do.
      It's also far too easy for governments to award crazy damages against foreign companies as a for of protectionism. See Apple for examples.

      a patents are

      Make up your mind. How many?

      need to be reinforced against the retailers

      Do you mean in the past of the future?
      Or do you actually mean enforced?
      Or possibly you mean something completely different.

    17. Re:Patents Suck by pubwvj · · Score: 1

      It's easy for armchair quarterbacks like you to say that but I have actually repeatedly invented things, manufactured them for years with companies I setup to do that, sold my products and made my money that way over the last >40 years. I speak from experience. The patent system is broken and designed for the benefit of big corporations and against inventors. Better to just get rid of the patent system.

    18. Re:Patents Suck by pubwvj · · Score: 1

      And that's the problem. Everything is obvious. Put 100 engineers on a problem and they'll come up with a few similar ideas, pretty much the best ideas allowed by societies current state of technology. This should not be protected by patents.

    19. Re:Patents Suck by pubwvj · · Score: 1

      You don't actually know what you're talking about. Perhaps you read your statement somewhere but based on what you're saying you're not talking from experience.

      I have actually repeatedly invented things, manufactured them for years with companies I setup to do that, sold my products and made my money that way over the last >40 years. I speak from experience.

      The patent system is broken and designed for the benefit of big corporations and against inventors. Better to just get rid of the patent system.

  3. as always when it comes to patents by Anonymous Coward · · Score: 0

    they only serve the big players and should be banned completely.

  4. Really? by Patent+Lover · · Score: 1, Informative

    There's still a Groupon to sue?

    1. Re: Really? by datavirtue · · Score: 1

      Sort of....never turned a profit and never will. As soon as I saw this post I thought "nail in the coffin."

      --
      I object to power without constructive purpose. --Spock
    2. Re: Really? by Anonymous Coward · · Score: 0

      Mate they may be suing em for their patent portfolio

  5. /. Wants 167 Apologies from AC for First Post by Anonymous Coward · · Score: 0

    Je suis désolé, mademoiselle

    (tips fedora pensively)

  6. IBM by Anonymous Coward · · Score: 0

    We don't innovate, we litigate!

  7. 20 years is reasonable. by WolfgangVL · · Score: 4, Interesting

    The length of a US patent is 20 years. I think this is just about right where it is supposed to be. I don't like it, but I see that it is necessary.

    I also like watching giants duke it out in court for the entire 20 years.

    I think there are 2 reforms that need to happen with our patent system here in the states.

    1. Use it or lose it. End patent trolling for good.
    2. Limited applications. Half the reason we have so many dumbass patents (rounded corners, swipe left ect..) is because we allow giant companies to apply for patents en-mass. Apply for 500 frivolous patents a day. if even one gets approved a quarter, you can unleash the lawyers and recoup the cost of all of the failed applications and rent seek for another 20 years. If you can afford huge upfront cost, or already have the lawyers for doing your legit patents, you gotta keep em busy.

    --
    You are being ripped off every second of every day, so that advertisers can help rip you off even more tomorrow.
    1. Re:20 years is reasonable. by wizkid · · Score: 1

      I think there are 2 reforms that need to happen with our patent system here in the states.

      1. Use it or lose it. End patent trolling for good.
      2. Limited applications. Half the reason we have so many dumbass patents (rounded corners, swipe left ect..) is because we allow giant companies to apply for patents en-mass. Apply for 500 frivolous patents a day. if even one gets approved a quarter, you can unleash the lawyers and recoup the cost of all of the failed applications and rent seek for another 20 years. If you can afford huge upfront cost, or already have the lawyers for doing your legit patents, you gotta keep em busy.

      Well stated. The cost for getting a patent hasn't increased in cost, relative to the economy. It would reduce the frivolous patents, and the funds could be used to hire more patent reviewers to filter out the crap patents.

      --
      I take no responsibility for what I say. Even though I'm never wrong :)
    2. Re:20 years is reasonable. by brunes69 · · Score: 1

      I can almost guarantee that IBM uses this patent. IBM runs e-commerce sites left right and centre.

    3. Re:20 years is reasonable. by Luthair · · Score: 2

      For technology 20-years seems far too long, stop and think about the state of technology and the internet in 1998.

    4. Re:20 years is reasonable. by Theaetetus · · Score: 1

      For technology 20-years seems far too long, stop and think about the state of technology and the internet in 1998.

      Most patents don't live that long... The USPTO requires you to pay maintenance fees during the life of the patent, and they increase from $1600 to $7400 over that time. Somewhere around half of patents are abandoned without paying that $7400 fee. The ones that are maintained tend to be things like pharmaceuticals, where they're still valuable after 20 years.

  8. I'm reminded of a story by Anonymous Coward · · Score: 5, Interesting

    No source, so take with an appropriately sized grain of salt.

    Back in the early days of Sun, IBM came in and said, "You're violating this patent we own. We want you to pay for a license." Sun's engineers sat down, looked at the patent, and went through all the various claims it made, and basically proved that Sun did not violate that patent.

    IBM's response: "We have a portfolio of $BIGNUM patents. You can either pay us for a license, or we will find one that you are violating, and sue."

    Sun folded.

    In the context of computer hardware at the time, IBM was the 200 kg gorilla in the room, and if you didn't have a patent portfolio of your own, you were at their mercy. I don't know if IBM still has the same level of legal clout in this particular area, but I'd not want to be in Groupon's shoes right now. Lawsuit vs patent license... a very tricky situation, especially since IBM could, potentially, drag out dozens of lawsuits over dozens of patents as a form of legal harassment.

  9. Fuck IBM and fuck software patents by Anonymous Coward · · Score: 0

    IBM spends a fortune on lawyers to deliberately subvert the process of filing patents.

    The profits go back into the pockets of the lawyers.

    This giant circle-jerk should end up with a whole bunch of lawyers in jail, but since the judges are ex-lawyers, there's no chance of that.

  10. They're not stupid. by Anonymous Coward · · Score: 1

    I hope IBM have their arse handed to them (but they probably won't).

    An IBM executive is expected to testify during the two-week trial about licensing deals with technology companies like Amazon and Google...

    Which will prove only that Google and Amazon didn't challenge the stupid patents, not that they are valid.

    I'm sure Groupon's counsel will have thought of that though.

    IBM has had an incredible R&D team for decades and decades. They research real technology.

    Groupon is just another dipshit web based retail type of company that tries to pass its self off as a tech company to get stupid people to value it more than it should be. It's done nothing worthy of being called technology. Like Uber and Lyft.

    I see it time and time again, some Silly Valley company exclaims that they've done something innovative and it was really done many years ago.

    I swear to my personal God, I could start a pizza parlor in Silly Valley, throw up a website and create an app, and it'd be called an innovative tech company and valued at $100 billion.
    The last innovative company out of Silicon Valley was Cisco.

    Most of you have been brainwashed by marketing people into thinking that certain name brand products are new technology when they are just a rehash of shit that was done years ago.

    That's right! That jock in marketing is outsmarting you geeks.

    AND they are STILL getting the girls and not you.

    1. Re:They're not stupid. by Luthair · · Score: 1

      IBM has had an incredible R&D team for decades and decades. They research real technology.

      I agree, but from the article absent proper detail it doesn't sound like this patent suit involves any of it.

    2. Re: They're not stupid. by datavirtue · · Score: 1

      I have the code sitting around for the pizza app if you want to make a go at it.

      --
      I object to power without constructive purpose. --Spock
    3. Re:They're not stupid. by Anonymous Coward · · Score: 0

      And they will still get more girls than you, even if you sue them. Why? There is a very strong negative correlation between yearly wage and number of children. It is a world-wide phenomenon.

      That's right. More money = few, or no, children. Sounds backwards, but it is most assuredly not.

    4. Re:They're not stupid. by LynnwoodRooster · · Score: 1, Insightful

      Given that Facebook, Amazon, and Alphabet dropped 8 figures to license the patent, there's a good chance it's solid enough to survive at least $20-$30 million of legal challenges - meaning, it's probably pretty solid.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    5. Re:They're not stupid. by Anonymous Coward · · Score: 0

      The Prodigy innovation of storing information on the user's computer to deliver relevant ads via a GUI instead of using a mainframe server for everything does seem like a genuine innovation, compared to what others were doing at the time.

    6. Re:They're not stupid. by Luthair · · Score: 1

      Or they did the math and decided it would be cheaper to pay than to litigate.

  11. Unlikely. by brunes69 · · Score: 5, Informative

    IBM is the furthest thing in the world from a patent troll.

    Need I remind....

    - IBM has had the record of the most patents per year for the past 25 years, in a row

    - IBM grants free access to its entire patent portfolio (again, the world's largest - see above) to initiatives like The Linux Foundation and OASIS Standards.

    - IBM has used its massive patent warchest to act in the interests of Open Source and Linux many, many, many times over the years.

    - IBM allowed Google to purchase some of their patents to aid in their fight against Oracle's ridiculousness that would have killed all open source Java as well as Android

    In general... IBM spends a massive amount of money on R&D and for the most part, their patents are real inventions. They then either license those patents on reasonable terms to others, or hold them as defense against other patent trolls, or use them to help open technology movements.

    1. Re:Unlikely. by youngone · · Score: 2

      You make some excellent points about IBM, and they are one of the better players.
      I have not forgotten about SCO and all that nonsense, but I am of the view that any software patent should be invalidated.

    2. Re:Unlikely. by WindBourne · · Score: 1

      In general, software patents SHOULD be invalidated. BUT, IBM has algorithmic and other utility type patents that I suspect Groupon is stepping all over.

      --
      I prefer the "u" in honour as it seems to be missing these days.
    3. Re:Unlikely. by Anonymous Coward · · Score: 0

      Algorithms are not patentable. If any is, this is an abuse.

    4. Re:Unlikely. by Anonymous Coward · · Score: 0

      Patent an algorithm? Like patenting math? You're an idiot.

    5. Re:Unlikely. by Johnberg · · Score: 1

      I don't understand. You say " IBM grants free access to its entire patent portfolio", but Amazon, Facebook, and Alphabet are paying money for something according to the article. Which is it?

    6. Re:Unlikely. by Spamalope · · Score: 2

      And they also have BS patents. And they're known for showing up at a business who's recently successful and just demanding a payment. They'd reference a dozen patents, and when the wet behind the ears company proves they don't practice those the IBM lawyers present another dozen and point out that they'll just keep doing this can can litigate them all. It doesn't matter whether there is actual infringement.

      I've always heard IBM's patent lawyers referred to as the Nazgul for behaving exactly like that and never going away until they've been paid no matter what.

      Where did you get the impression that IBM is at all the good guy? They've always seemed like the other bastard to me. (which doesn't make them wrong on any specific issue)

    7. Re:Unlikely. by Anonymous Coward · · Score: 0

      Yeah, probably sorts and B-trees and linear regression formulas. A blob of HTML is a blog. There are no server shortcuts, bar one - cached, or recycling cache.
      Cache has many levels - not original.

      I think they have not looked at prior art - Digital Research, Prime Computers, ICL Atari, Commodore and French TV teletext and even Clive Sinclair.
      If 3270 graphics compression was active circa 1986 - I think some evergreening is going on. Light weight client server techniques.

      Thinking of the SEND verb as well.

    8. Re:Unlikely. by thej1nx · · Score: 1

      Learn to read properly please. They grant the aforesaid free access to initiatives like The Linux Foundation and OASIS Standards, which in turn will not make a profit on those. You seem to confuse that with a free access being granted to entire corporate world.

    9. Re:Unlikely. by sootman · · Score: 1

      "... for the most part, their patents are real inventions..."

      IBM (and others) simply patent everything under the sun. From TFA:

      Two of the four patents at issue relate to Prodigy, a late-1980s forerunner to the internet, developed by IBM and others, that describe a system for showing applications and advertisements that reduces server loads.

      IBM also said it patented so-called "single sign on" technology that allows consumers to log in to a retailer's website with their Facebook or Google account.

      --
      Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
    10. Re:Unlikely. by bill_mcgonigle · · Score: 1

      IBM is either prosecuting an obvious patent or not. I they are that is wrong no matter what they do with their other patents.

      We may simultaneously hold the idea that IBM does good things and IBM does bad things and we may react to each position appropriately.

      --
      My God, it's Full of Source!
      OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
  12. Sounds like a weak defence to me ... by gordguide · · Score: 1

    " ... "A key question for you in this case is whether these patents cover the world wide web," Hadden told jurors. "They do not and that is because IBM did not invent the world wide web." ..."

    The patents could easily 'cover the world wide web' in a general sense while at the same time covering only a subset of it. Nor is Groupon a company whose product 'cover[s] the world wide web', it covers a subset of the world wide web.

    IBM has no need to prove it 'invent[ed] the world wide web', it only has to prove it invented some processes for eCommerce and received patents for them (whether such patents should have been issued is another story, but none the less, they were granted, so that is a simple fact) and that Groupon has used these patented processes in it's business without obtaining a license authorizing their use.

    World Wide Web does not equal eCommerce on the web, nor does eCommerce on the web equal the World Wide Web.

    Sound like they have little to offer to defend themselves against the suit., and are trying to deflect the issue they are being sued over. Obviously an armchair assessment, but it looks bad for them to me.

  13. Derivative patent troll by Anonymous Coward · · Score: 1

    No they're a derivative patent troll. None of their patents constitute a commercial market, they simply look at what's happening and patent around it.

    "IBM also said it patented so-called “single sign on” technology that allows consumers to log in to a retailer’s website with their Facebook or Google account. "

    This case in point.

    Worlds biggest patent troll, hasn't innovated since the 1950's.

  14. IBM always has been a patent troll. by Anonymous Coward · · Score: 0

    Remember that little piece of code in the BIOS which reset the floppy disk to track 0?

    I bet IBM is still getting money from that patent. At least they were long after the floppy drive's death itself. Because the BIOSes still included that code, thanks to our industry's inertia.

  15. Quoting by Anonymous Coward · · Score: 0

    "Two of the four patents at issue relate to Prodigy, a late-1980s forerunner to the internet, developed by IBM and others, that describe a system for showing applications and advertisements that reduces server loads.

    IBM also said it patented so-called “single sign on” technology that allows consumers to log in to a retailer’s website with their Facebook or Google account.

  16. The patents in question by Rastl · · Score: 1

    Mandatory "I am not a professional in any field dealing with IP law but I have common sense, which doesn't always relate to legal stuff" disclaimer.

    I didn't see this in any comments and the article obviously isn't written for people who want to know what patents IBM is claiming infringement upon.

    "Two of the four patents at issue relate to Prodigy, a late-1980s forerunner to the internet, developed by IBM and others, that describe a system for showing applications and advertisements that reduces server loads."

    * I suspect that those two patents will be shown to be overly broad and obvious unless there's some radical work to reduce the server load. I'm thinking the word 'cache' will appear.

    "IBM also said it patented so-called “single sign on” technology that allows consumers to log in to a retailer’s website with their Facebook or Google account."

    * I don't know that I've seen a site lately that doesn't allow connectivity to other accounts. SSO is so prevalent and there's so many sites that use it without licensing that this one will be diluted to the point of irrelevance. The connection between Facebook and Google licensing the patents would be on the back end, not the front.

    1. Re:The patents in question by Anonymous Coward · · Score: 0

      "single sign on" existed BEFORE WWW and is not a unique invention, so shouldn't be patent-able. Even a 'master key' for door locks is single sign on!
      Way to many patents are issued that are TOO general and not unique

  17. LMFAO!!! by sentiblue · · Score: 1

    Quoting the lawyer: Groupon lawyer J. David Hadden argued that IBM was overreading the scope of its patents and claiming ownership of building blocks of the internet. "A key question for you in this case is whether these patents cover the world wide web," Hadden told jurors. "They do not and that is because IBM did not invent the world wide web."

    This guy just made my day as the stuff he said is so hilarious. So in general he's not challenging the validity of the patent but actually challenges where it gets used. If IBM didn't invent the www, then they can't claim anything on their patent because it's being used on the www. This guy just literally invalidated 100% patents in all countries world wide. Because if nobody invented Earth, then everything invented to be used on Earth is not a patent.

  18. Example of Why Patents are Absurd... by pubwvj · · Score: 1

    "AI Plus a Chemistry Robot Finds All the Reactions That Will Work"
    https://science.slashdot.org/s...

    This is a prime example of why patents are absurd and should be discontinued.

  19. killing is just wrong by Anonymous Coward · · Score: 0

    Beatings and deaths triggered by false incendiary messages in India, WhatsApp's biggest market with more than 200 million users, caused a public relations nightmare, sparking calls from authorities for immediate action.

    In rural communities, it is often the primary way people access the internet, but so far this year, false messages about child abductors have helped to trigger mass beatings of more than a dozen people — at least three of whom have died.