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Delaware Jury Favors IBM over Groupon in Patent Infringement Case

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Aug. 8 2018, Updated 1:30 p.m. ET

Jury recommends IBM receives $82.5 million

IBM (IBM) is a step closer to collect $82.5 million in damages from e-commerce company Groupon (GRPN). A jury in Delaware last month returned a verdict that Groupon infringed on four IBM patents related to e-commerce technology. As a result, the jury recommended that Groupon should pay at least $82.5 million to IBM in damages.

The jury said Groupon intentionally infringed on IBM patents, creating an opening for IBM to request that the judge triple the damages amount recommended by the jury. In that event, IBM could collect as much as $250.0 million from Groupon.

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IBM spends $6 billion on R&D annually

IBM had sued Groupon for $167.0 million in damages. Groupon disagreed with the jury decision and stated that it would challenge it. IBM spends nearly $6.0 billion on R&D each year. In the first quarter, the company invested $1.4 billion in R&D. After the verdict was delivered, IBM spokesman Doug Shelton noted, “We rely on our patents to protect our innovations.”

Patent licensing is big business for IBM

IBM holds more than 45,000 patents, some of which it has licensed to other companies at a fee. IBM made nearly $1.2 billion from licensing its patents last year.

IBM disclosed during the trial that Facebook (FB), Amazon (AMZN), and Alphabet’s (GOOGL) Google are among the companies that have licensed IBM patents at a cost of $20.0 million–$50.0 million. In the second quarter, its revenues grew 42.0% year-over-year at Facebook, 25.6% at Alphabet, and 39.3% at Amazon.

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