Amazon Courts Patent Battle From IBM

DQI Bureau
New Update

The lawsuits which IBM has just filed against Amazon for patent

violations (, are not the beginning of the story, just

the beginning of the end. IBM says it has tried more than a dozen times since

2002 to get Amazon to license five e-commerce patents, and that hundreds of

companies have done so. Amazon (which has not commented on the case) seems to be

the first company willing to fight.


IBM managed to take 2,974 patents last year, or 57 per week, and

has stockpiled 31,995 over the past 13 years. Nobody has read, much less

understood, more than a fraction of these. However, IBM already rakes in $1bn a

year from patent licensing, and is looking to make more.

In the Amazon case, the stakes are high. IBM's patents include

"storing data in an interactive network," "ordering items using

an electronic catalogue" and "presenting advertising in an interactive

service". These could be considered fundamental to e-commerce on the web.

If the patents stand up, it could let IBM impose what amounts to a tax on online


Whether they will stand up is now a matter for the courts, and

IBM has chosen carefully by filing two suits in different courts in the Eastern

District of Texas.

IBM's claims over things that now sound obvious could have

created a storm of protest. However, Amazon may have attracted less sympathetic

support than expected because it owns a patent on one-click purchasing. Other

online retailers, such as Apple's iTunes Music Store, have to pay Amazon to

licence what could also look like an obvious business method.

Whether IBM wins or not, patent attacks are not going away.

Patent holders are being encouraged by a huge growth in payouts.