A patent suit between IBM and Groupon that has been underway for over two years has finally been settled.
IBM sued Groupon alleging violation of four of its duly protected patents.
The two companies announced that Groupon will pay IBM $57 million both to settle infringement claims as well as to license e-commerce patents from IBM in the future. On IBM’s side, the company said it will “consider” offering Groupon products to employees as part of the company’s corporate benefits package.
The $57 million is a fair bit lower than the initial $83 million that IBM was awarded when it won the case against Groupon in July, and significantly lower than the $167 million that it originally asked for in damages.
Groupon had always argued that it wasn’t guilty because it believed the patents that were in question were too old, and so in July it said it would consider appealing or applying for a lower sum (which it appears to have achieved).
IBM made nearly $1.2 billion in intellectual property licensing and royalties in 2017 according to its annual report. Notably, this was down about 14 percent from 2016’s $1.4 billion.
IBM’s general manager of intellectual property, said in a statement, that the deal demonstrates the value of the intellectual property the company derives from its annual investment of more than $5 billion in research and development.
The case was closely watched in the technology industry because it offered a glimpse into IBM’s efforts to license its large patent portfolio to other companies.
Of interest highpointing the importance of IP in the tech industry is that, ‘An IBM licensing executive testified that Amazon, Facebook, Alphabet, Google, LinkedIn and Twitter have each paid IBM $20 million to $50 million as part of cross-licensing deals that gave them access to the patent portfolio.