IBM to sue Amazon over online payment patents breach

LONDON - IBM is suing online retailer Amazon over alleged breaches of intellectual property rights relating to five patents established by the software giant in the late 1980s and early 1990s.

It is understood that IBM objects to Amazon's use of hypertext links for customer recommendations, online content delivery, storing data in web browsers, ordering products from online catalogues, and using ads in interactive services.

The case could have serious implications for the online retail industry if IBM won, given the fundamental part these methods play in online commerce.

John Kelly, senior vice-president for intellectual property at IBM, said Amazon had "built much if not all of their business on top of out intellectual property" claiming that IBM had been trying to persuade Amazon for four years to obtain a licence for its online retailing functions.

Kelly said: "We tried our best, but they showed no signs of doing what we thought was right -- respecting our property. We decided they weren't interested in reaching an agreement."

A spokesperson for Amazon said the company had not seen the lawsuit and was not in a position to comment at present.

In 2004, Amazon paid Soverain Software $40m over two patent infringements relating to online payment, shopping carts and identification of users.

The company fought Barnes & Noble between 1999 and 2001 over the use of its "Express Lane" website feature, which Amazon said infringed its "1-Click" method. The lawsuit resulted in the US retail giant closing the function for two consecutive Christmas periods.

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