Amazon Ponies Up to End IBM Patent Suits

Amazon.com  today agreed to pay IBM  an undisclosed sum to settle all patent lawsuits between the companies, which also inked a patent cross-license agreement.

The detente comes months after IBM filed two suits in the Eastern District of Texas, alleging that Amazon “willfully infringed” on five patents.

The disputed patents covered core technology Amazon used to power its successful e-commerce business.

The patents included: “Presenting Applications in an Interactive service,” “Storing Data in an Interactive Network,” “Presenting Advertising in an Interactive Service,” and “Adjusting Hypertext Links with Weighted User Goals and Activities.”

IBM said when it filed the patents last October that it first approached Amazon about entering into an agreement about the patents in September 2002, but that Amazon was reluctant to come to terms.

Amazon countersued IBM in December, claiming Big Blue was illegally using two of Amazon’s patents related to Internet search queries.

Tuesday the beef was rendered moot.

“IBM’s patent portfolio is the largest and strongest in the IT industry,” said Scott Hayden, Amazon’s vice president of intellectual property, in a statement. “Our license to its portfolio, and specifically to its Web technology patents, gives us greater freedom to innovate for our customers.”

IBM holds more than 40,000 patents worldwide and has been awarded the most U.S. patents for 14 consecutive years.

“At IBM, we place a high value on our IP assets and believe this agreement substantiates the value of our portfolio,” said Dan Cerutti, IBM’s General Manager of Software Intellectual Property, in a statement. “We’re pleased this matter has been resolved through negotiation and licensing.”

Amazon is no stranger to patent-infringement suits, and has spent time as both defendant and plaintiff.

The company paid Soverain Software $40 million in 2005 to settle a suit and became entangled in patent suits from Cendant Publishing and Pinpoint.

Perhaps the most high-profile was Amazon’s suit against Barnesandnoble.com over its 1-Click shopping technology.