Groupon to pay $57m to settle IBM patent row
Online deals platform Groupon has agreed to pay $57 million to resolve all outstanding patent litigation with technology company IBM, ending a dispute that started in 2016.
The companies announced their settlement yesterday, October 1, following the US District Court for the District of Delaware’s dismissal of the matter in view of the parties’ agreement on Friday, September 28.
News of the settlement comes just days after IBM asked the court to double the damages owed by Groupon for patent infringement from $82.5 million to $165 million. The filing, made on Wednesday, September 26, said that enhanced damages are justified because the infringement was wilful.
IBM filed its patent complaint against Groupon in March 2016, alleging infringement of four US patents (5,796,967; 5,961,601; 7,072,849; and 7,631,346), covering online advertising and ways of allowing web users to connect to an internet provider.
In July, a jury found that Groupon had infringed the patents, and the Delaware court ordered Groupon to pay IBM $82.5 million.
Following the decision, District Judge Leonard Stark said he would be “inclined” to dismiss the expected post-trial motions from both IBM and Groupon.
Last week, IBM said in its post-trial motion that enhanced damages are necessary because of Groupon’s “continuously resistant and dilatory misbehaviour, extending through discovery, expert reports, summary judgment, and trial”.
The motion also requested $13.6 million in pre-judgment interest, for post-judgment interest to be calculated at a rate of 2.44% per day, and an ongoing royalty.
However, as announced yesterday, the parties have agreed to settle all outstanding patent litigation for $57 million.
According to the order of dismissal, each party will bear its own costs and attorneys’ fees.
William Lafontaine, general manager of IP at IBM, said the agreement demonstrates the value of IBM’s research and development and resulting IP.
The parties have entered into a long-term patent cross-licence agreement and IBM will consider making certain Groupon products available to its employees as part of its corporate benefits offer.
Bill Roberts, vice president of global communications at Groupon, said: “The licence we have acquired to IBM’s patent portfolio will enable Groupon to continue to build amazing products for consumers and small businesses around the world. We look forward to sharing these products directly with IBM employees.”
In January, WIPR reported that IBM had settled an infringement claim with travel website The Priceline Group over the same patents. The day after the settlement, IBM sued travel company Expedia for allegedly infringing the same patents.
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