back to article Hot US deal! IBM wins $83m from Groupon in e-commerce patent spat

IBM has won $82.5m in a legal battle against Groupon over e-commerce patent infringement. The verdict, delivered by a jury at the end of last week after a 10-day trial, was that Groupon had wilfully infringed a number of IBM's patents. Because of the ruling that it was wilful, the online voucher biz was handed a larger …

  1. Arthur the cat Silver badge
    WTF?

    Patent lifetime?

    They include two patents developed in the 1980s

    I thought patents only lasted 20 years?

    1. Charlie Clark Silver badge

      Re: Patent lifetime?

      20 years after registration… Anyway: software patents are evil so.

      More importantly: Groupon is still alive? Fortunately, I have not heard anything about it for years!

      1. Ian Michael Gumby
        Boffin

        @Charlie Clark Re: Patent lifetime?

        Yup still alive and sitting in the their same offices in Chicago's River North neighborhood.

        1. Charlie Clark Silver badge

          Re: @Charlie Clark Patent lifetime?

          @IMG

          thanks for the info, I won't be popping by anytime soon. I'm just amazed that this parasitic business is still going. Maybe they've just abandoned the German or European market for nail polishing and window cleaning?

          1. Anonymous Coward
            Anonymous Coward

            Re: @Charlie Clark Patent lifetime?

            Pretty strong words, there. I still use them once in a while to discover new places and try them out. Not clear why they're considered parasitic? Grabbing a good deal is a bad thing? A few of those deals have brought me back to establishments after trying them. Just a little confused on why they're such a bad thing, I guess.

            1. Charlie Clark Silver badge

              Re: @Charlie Clark Patent lifetime?

              Not clear why they're considered parasitic?

              Their business model requires companies to continually run loss-making deals and pay Groupon for it.

              1. Michael Wojcik Silver badge

                Re: @Charlie Clark Patent lifetime?

                Their business model requires companies to continually run loss-making deals and pay Groupon for it.

                This is purely anecdotal, but I've heard enough horror stories about Groupon from small-business owners that I refuse to use it. Though to be honest I wouldn't be particularly interested anyway; when I buy goods or services, I generally pay the asking price or I go without. Helps me maintain a shred of financial discipline.

              2. Ian Michael Gumby
                Boffin

                Not parasitic ... but also not without problems... Re: @Charlie Clark Patent lifetime?

                Restaurants hate them as do waiters.

                In the US, waiters make their money from the tips. So when your meal is 50% off... while the restaurant may break even on the table, the waiter/waitress loses when they are only tipped on the price of the meal and not what the meal would have cost.

                Businesses also hate it in that they run specials to attract new customers, yet the reality is that most who do Groupon will not revisit the businesses unless they have another Groupon deal.

                Then again, there are some issues surrounding the coupons and discounts... some irregularities in accounting.

                One thing also to remember... they started in Chicago. They've been profitable since day one... none of this sucking in investor capital with no positive cash flow.... (Like you see in Silicone [sic] Valley...)

    2. Anonymous Coward
      Anonymous Coward

      Re: Patent lifetime?

      Only if you filed after 1994. Before that it was 17 years from issuance, which you could delay by various tricks. '967 and '849 were filed on the same day in 1993, so the older rule applies. '967 issued in 1998 so expired in 2015 - before IBM sued but after they say they started asking Groupon to pay. '849 apparently had one or more of the extension tricks as it wasn't issued until 2006, so that one's active until 2023!

      1. Arthur the cat Silver badge

        Re: Patent lifetime?

        @AC: Thanks.

  2. Mage Silver badge

    Evil patent

    Patents are good.

    Stupid patents and the USPTO is bad.

    I've written a longer explanation as to why they are not to do with encouraging and protecting innovation or inventions, but protecting corporations with lots of lawyers.

  3. adam payne

    They include two patents developed in the 1980s for IBM's pre-internet Prodigy online communication service, which offered news, weather and sports reports.

    IBM announces their plans to expand their new patent trolling department.

    1. Lord Elpuss Silver badge

      Why, because they're standing up for patents they developed and own?

      This isn't a patent troll issue.

  4. The Man Who Fell To Earth Silver badge
    FAIL

    Groupon

    Groupon, like Uber, Airbnb, and the like's "innovations" are ignoring other patents often coupled with ignoring tax, health & safety regulations. No different than making food cheaper by ignoring those pesky food factory hygiene regulations.

    If Groupon wants to "prove" those IBM patents should not have been granted because what they protect was obvious at the time of invention, let them try. Claiming something is obvious long after it was invented is an insult to the intelligence of the audience.

    1. Ian Michael Gumby

      @Falling Man ...Re: Groupon

      It depends.

      You have to consider the patent as a whole and see what is actually being patented.

      From what I have found... even if its possible to argue that the patent is obvious and not really able to be patented, depending on the lawyers arguing... you could still lose.

      To your point, the burden of proof is on the person wishing to invalidate a patent. That said, once a patent is granted... its an uphill battle to get it revoked.

      Software patents and business process patents should never be granted in the first place.

    2. midcapwarrior

      Re: Groupon

      Groupon is saying something is obvious long after it was patented. They don't believe it was invented.

  5. Trev 2

    Didn't Amazon contest this?

    Really surprised Amazon haven't contested this one especially the single click ordering patent unless it's simply cheaper not to bother. In the US at least it does seem a utility patent lasts 20 years which I think would be the type mentioned in this case. Can't find any mechanism by which it can be extended beyond that however except for the little bit of time it takes from filing to actual approval.

    "A U.S. utility patent, explained above, is generally granted for 20 years from the date the patent application is filed; however, periodic fees are required to maintain the enforceability of the patent. A design patent is generally granted protection for 14 years measured from the date the design patent is granted."

    https://www.stopfakes.gov/article?id=How-Long-Does-Patent-Trademark-or-Copyright-Protection-Last

    Not sure however if Groupon is UK or US based, or maybe has a US operation?

    1. Giovani Tapini

      Re: Didn't Amazon contest this?

      Corps often licence because it's less effort or cost than fighting even if the Patent is terrible / flawed / incomprehensible.

      This also contributes to the dishonour and lack of credibility in the Patent system...

    2. Ian Michael Gumby
      Boffin

      @Trev Re: Didn't Amazon contest this?

      Groupon's HQ is in Chicago, IL, in the River North neighborhood. (approx .25 miles / .5km north of the 'Loop')

      They were founded in Chicago and one of the founders went on to start Uptake also located in the same building.

      (This is the old Montgomery Ward warehouse building)

      More history than you wanted to know...

      Also across the river (North Branch) from one of the contending spots for Amazon to locate their 2nd HQ.

  6. gnasher729 Silver badge

    Two question in every patent fight: How good are their patents? And how good are their lawyers? I can't comment on the quality of IBM's patents, but Groupon clearly underestimated their lawyers.

    1. Saruman the White Silver badge

      An (apparently true) story.

      IBM was caught red-handed infringing on one of Sun's patents. Their respective legal-eagle teams then had a meeting that went something like this:

      SUN: We want you to pay $x million in order to be allowed to use this patent, plus another $y million in damages. Otherwise we sue your ass.

      IBM: We want a cross-licensing deal and no damages.

      SUN: No way. See you in court.

      IBM: We have the largest patent portfolio in the world. You almost certainly have infringed on something. Do you really want us to go through the portfolio to find out exactly what and how many times?

      SUN: About this cross-licensing deal ...

      1. Anonymous Coward
        Anonymous Coward

        Re: Sun story.

        We call this "defensive" use of patents. Like in military combat, a good defense can allow you to be offensive.

  7. Velv
    Headmaster

    Isn't there something about patents lapsing if you don't enforce them?

    While Amazon, Facebook and Google may have paid up, how many other "marketplaces" have not had any enforcement action taken against them by IBM?

    1. John Riddoch

      You're thinking of trademarks. Patents follow different laws/rules, hence you can have a submarine patent - let something become ubiquitous then sue the world because you have a patent on it. Declaring it too soon means people can find a different solution and work around your patent and you don't get royalties.

  8. Destroy All Monsters Silver badge
    Paris Hilton

    Hmmm ...

    Aren't these patents from before the raving-bonkers-by-greed-era when was not possible to patent business processes and software algorithms? If so, how does that work? Did IBM file them afterwards?

  9. Mark 85

    Kill Software Patents!!!

    Patents are not about "innovation". Chances are just about any bit of code a programmer might write has been patented somewhere even if said programmer never saw the code and thought they came up with it themselves. Given the laws, patents and the lawyers, anyone who writes a program should just immediately assume they'll be sued by someone.

    1. Ian Michael Gumby
      Boffin

      @Mark 85 ... think AI ... Re: Kill Software Patents!!!

      I think it would interesting if someone created an AI program to generate code to solve a specific problem that is covered by a patent.

      If the AI comes up with software that is very similar, yet generated independently from the other system, it would help foster the argument to invalidate the patent in question.

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