IBM sues Amazon for infringing 5 patents for Web operation
Monday, October 23rd 2006, 10:38 am
By: News On 6
BOSTON (AP) _ Key aspects of Amazon.com Inc.'s retailing Web site are improperly built on technologies developed at IBM Corp., Big Blue alleged Monday in two lawsuits against Amazon.
Amazon is accused of infringing on five IBM patents, including technologies that govern how the site recommends products to customers, serves up advertising and stores data.
Some of the patents were first filed in the 1980s, including one 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 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. Amazon.com _ which has bought a lot of hardware from Hewlett-Packard Co. over the years but not IBM _ has allegedly refused every time.
A call seeking comment from Seattle-based Amazon was not immediately returned Monday.
Armonk, N.Y.-based IBM filed its two 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 of a perception that certain districts there are more responsive to such claims.
IBM shares were up $1.46, 1.6 percent, $91.94 on the New York Stock Exchange. Amazon shares were down 3 cents at $32.54 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 U.S. Patent and Trademark Office is re-examining that patent.
IBM is not specifying the amount of damages it seeks. Kelly would not disclose how much other companies have paid to license these same patents, though he added: ``We are not unreasonable people.''