Boston - IBM Corp. alleged in two lawsuits Monday that important components
of Amazon.com Inc.'s massive retailing website were developed and patented many
years earlier at IBM.
IBM Corp. alleged in two lawsuits Monday that important
components of Amazon.com Inc.'s massive retailing Web site were developed
and patented many years earlier at IBM. [AP] |
Amazon, which this year will sell $10 billion worth of everything from books
and CDs to pet supplies and jewelry, is accused of infringing on five IBM
patents. IBM says the technologies covered by the patents govern how the site
recommends products to customers, serves up advertising and stores data.
Some of the patents were first filed in the 1980s, when IBM created back-end
technology for Prodigy, an early online service that grew out of a joint venture
between IBM and Sears, Roebuck & Co. One such patent is titled "Ordering
Items Using an Electronic Catalog."
"Given that time frame, these are very fundamental inventions for e-commerce
and how to do it on the network," said John E. Kelly III, IBM's senior vice
president for intellectual property. "Much, if not all, of Amazon's business is
built on top of this property."
Hundreds of other companies have licensed the same patents, and IBM has tried
to negotiate licensing deals with Amazon "over a dozen times since 2002," Kelly
said. Seattle-based Amazon has refused every time "while pretending to desire
resolution," the lawsuits state.
Amazon declined to comment.
Armonk, N.Y.-based IBM is not specifying the damages it seeks. It filed its
lawsuits in federal court in the Eastern District of Texas, one in Tyler and one
in Lufkin. Texas has become a frequent site for patent cases because districts
there move quickly and are perceived as relatively responsive to
intellectual-property claims.
IBM shares gained $1.08, 1.2 percent, to close at $91.56 on the New York
Stock Exchange. Amazon shares rose 31 cents, 1 percent, to $32.88 on the Nasdaq
Stock Market.
IBM is the world's leading patent holder, spending $6 billion a year in
research and development and earning about $1 billion a year in royalties.
Amazon's relationship with patents has been more heavily contested; the
company's patent of the "one-click" checkout method in 1999 was famously derided
as overly broad and obvious. The US Patent and Trademark Office is re-examining
that patent.
Marc Kaufman, a Nixon Peabody LLP partner who specializes in patent law, said
some of the IBM patents at issue are widely known in technology legal circles to
have been frequently licensed. Kaufman said it appears that "Amazon is the first
potential licensee to dig in their heels."
IBM's Kelly would not disclose how much other companies have paid to license
these patents, though he added: "We are not unreasonable people."
There appears to be no sensitive customer relationship at stake in the
IBM-Amazon tussle. Traditionally a big customer of Hewlett-Packard Co., Amazon
does little if any business with IBM.
