IBM sues Amazon (and funny telemarketer prank)

I invented IT Blogwatch, in which IBM sues Amazon.com over software patents. Not to mention a telemarketer's worst nightmare...

Juan Carlos Perez pinged us with this:

IBM is taking Amazon.com Inc. to court, alleging patent infringement against the e-commerce giant. IBM announced today that it hit Amazon.com with two lawsuits that seek unspecified damages. For four years, IBM attempted to clear up the matter before it decided to sue.

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IBM alleges that Amazon.com knowingly exploits its intellectual property by infringing on several patents that cover, among other things, the presentation of applications in an interactive service, the storage of data in an interactive network, the presentation of advertising in an interactive service, and the ordering of items from an electronic catalog.

Nate Anderson takes a blender to his metaphors:

When an 800 pound gorilla puts on a tophat and a bowtie and starts doing dances in the street, people can quickly forget that it's still an 800 pound gorilla. In the patent world, IBM is the simian in question, racking up more patents in the last five years than any other US company ... IBM has been cultivating a kinder, gentler image over the last few years. Big Blue announced last year that it was making 500 patents available for use by open source developers, and it also agreed to share important open source patents with other major players.

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Amazon has its own patent stable, notably the "one-click" patent that it used to browbeat other online retailers into submission (but which is now being reviewed). Will the patents stand up? As Internet-centric patents go, some of these are quite old ... IBM claims that its technology is fundamental to much of Amazon's functionality. If the courts agree, Amazon could face a hefty bill. Is it time for the two great apes to stop beating their chests and start, err, talking?

John Murrell giggles:

IBM ... files more U.S. patents than any other company ... IBM said hundreds of companies already pay licensing fees on the patents, but a dozen attempts to negotiate with Amazon were rebuffed, necessitating hardball. Kelly didn't say how much IBM wanted to drain out of Amazon, but suggested this could all be settled with the exchange of a sufficient amount of greenery. "We are not unreasonable people," he said (smiling widely, we're guessing).
Techdirt's Mike remembers: [and the screen goes all wobbly]

There's a famous old story about IBM accusing Sun of patent infringement back in the 1980s, when Sun was still a small company. IBM sent a bunch of lawyers with a list of patents that they claimed Sun infringed on. Sun's team looked over the patents and pointed out how most weren't valid and the ones that were, Sun didn't infringe on at all. The response from the lawyers? "OK, maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

This is still one of the more popular examples of "patent extortion" our there, though it happens all the time with firms that don't necessarily have 10,000 patents. Anyway, in more recent years it had seemed that IBM had softened a bit on patents, recognizing that they can do quite a bit of damage -- though, that still hasn't stopped them from applying for and getting a huge number of patents every year. However, for all their newfound "openness" on patents, it seems they still can send in the lawyers to companies and demand payment.

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If you look through the patents, they seem to basically describe nearly everything that you might see on the internet today ... They could basically sue just about any online company with this batch of patents, nearly all of which never should have gotten passed the "obviousness" test (oh, that's right, the USPTO doesn't do an obviousness test, despite it being required by the Constitution). IBM, however, brushes off complaints about these patents claiming they're "high-quality patents" and "to not enforce our patent rights would be a discredit to those who fairly and lawfully use these licenses." Let me get that straight. Because you've suckered some people into licensing your extremely broad and obvious patents, you need to sue everyone else just to be fair?

Hartmeister knows more:

These patents are from the IBM-Sears joint Prodigy service. Prodigy really was ahead of its time in many of its concepts.
Rob Hof Huffs:

Investors yawned, probably for good reason, since these disputes tend to get settled well before they threaten the livelihood of any significant company. It's certainly ironic that Amazon, often criticized for the broadness of its One-Click checkout system, is now the subject of a lawsuit involving such broad patents--doubly ironic given that IBM and Amazon have both called for various levels of patent reform. It's certainly significant that IBM, which apparently doesn't need to file these suits very often, has come out with guns blazing at Amazon. But I'm betting this will end several months or years from now, long past the time investors stopped thinking about it, with Amazon quietly paying up.
Sarah Gilbert takes stock: [you're fired -Ed.]

International Business Machines Corp. (NYSE:IBM) filed two lawsuits against Amazon.com, Inc. (NASDAQ:AMZN)

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IBM tried to negotiate license fees with Amazon ... with zero response from the internet retailer. Has Jeffrey Bezos lost his marbles? ... In my knowledge of the IP world, IBM's ownership isn't much challenged here. The customer needs prediction algorithms are used by many different companies and taught in statistical marketing courses. While Amazon.com's use of them is considered smart, I've never heard claim that it's of the company's own design. Is Amazon.com a wronged innovator, or is the company's management just playing dirty pool?

Jon C. Ogg counsels calm:

Remember one thing about legal battles: Anyone with about $600.00 and a lot of free time can sue you ... This will NOT be the end of how Amazon.com operates ... some of these patents that have been somehow granted are increasingly nebulous and it makes one wonder how any technology has been able to progress without all the sales and royalties being taken away.

Patent law is often controversial and often nebulous, and that will never change. As far as $600.00 and free time, well IBM has a lot more than $600.00 and they have a rather large internal and external legal network.

Kelson Vibber sees the irony:

As crazy as this patent insanity gets, I can't help but think of the phrase, "Live by the sword, die by the sword."

Buffer overflow:

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And finally... A telemarketer's worst nightmare

Richi Jennings is an independent technology and marketing consultant, specializing in email, blogging, Linux, and computer security. A 20 year, cross-functional IT veteran, he is also an analyst at Ferris Research. Contact Richi at blogwatch@richij.com.

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