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Amazon countersues IBM

Written by Jane Coyle on 20 December 2006

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An ongoing patent feud between IBM and Amazon.com changed direction last week as the e-commerce giant countersued Big Blue for infringement and discredited their earlier accusations.

In late October, IBM filed two separate suits that accuse Amazon of infringing on patents covering topics ranging from advertising to hyperlink technology to a system for electronically ordering items. The Seattle-based internet retailer denied infringing on five IBM patents and claimed that just the opposite situation was occurring: "IBM has chosen to infringe Amazon.com's patents willfully and to obtain the commercial benefits of Amazon.com's technology without authorisation or compensation," attorneys for the company wrote in their responses to IBM's patent infringement allegations. Amazon said IBM never should have earned the patents in question because they were not novel and non-obvious, and their specifications were not crafted in the "full, clear, concise
and exact terms" required by federal patent law. "IBM's broad allegations of infringement amount to a claim that IBM invented the internet," Amazon's lawyers wrote. "If IBM's claims are believed, then not only must Amazon.com pay IBM, but everyone conducting electronic commerce over the world wide web (indeed, every website and potentially everyone who uses a web browser to surf the web) must pay IBM a toll for the right to do so."

Amazon's countersuit goes on to accuse IBM's WebSphere application server and other information management services and products of infringing on five Amazon patents. Those patents cover systems related to search queries, personalised recommendations and identification of related products. 

An IBM representative, Kendra Collins on Friday dismissed the new assertions and said the company was not about to drop its earlier suits. "The evidence in these two lawsuits will show Amazon's infringement of IBM's leading-edge technology, plain and simple. Furthermore, Amazon's counterclaims "ring hollow" and represent nothing more than a transparent litigation ploy, because
Amazon never brought up concerns over those patents during four years of cross-licensing discussions with IBM.”

In court filings, IBM said it first approached Amazon in 2002 to seek licensing fees for use of its technology. IBM, which holds more than 40,000 patents worldwide, filed its pair of complaints after encountering what it characterised as "stonewalling" from Amazon.

Amazon in its latest response said it refused to pay licensing fees because it believed the IBM patents in question were obtained through deceptive means and were thus invalid. They also questioned why IBM waited until just after Amazon's first profitable quarter to "demand money" for alleged infringement when it had held the disputed patents since the mid-1990s. Amazon's sought to portray Big Blue as a patent speculator, or "troll", suggesting that three of the patents at issue were "not even developed at IBM but rather were bought from a now-defunct company for the apparent purpose of threatening other companies with litigation like this to extract licensing payments."

IBM's Collins said Amazon’s complaint "relies on caustic rhetoric rather than facts to distract attention from the infringement of IBM's patents".

Amazon, which currently owns more than 60 US patents, has endured criticism over the years for patenting features like the 1-Click checkout system that some have deemed too obvious to warrant protection. At the same time, chief executive Jeff Bezos has been among the high-tech executives clamouring for changes to patent law such as limits on how long software and business method patents can be held.

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