Amazon Settles Patent Case

Amazon has settled a patent infringement lawsuit brought by Soverain Software for $40 million, according to documents filed with the Securities and Exchange Commission on Thursday.

Terms include “a one-time payment of $40 million in the third quarter of 2005, dismissal of all claims and counterclaims, mutual releases, and a non-exclusive license to Soverain’s patent portfolio,” the retail giant said in its filing.

Soverain brought the action against Amazon in January 2004 in U.S. District Court for the Eastern District of Texas.

The privately held company makes e-commerce software and has added to its own product in recent years with acquisitions of Open Market and divine. It focuses on large companies in publishing, banking and telecommunications.

Soverain is based in Chicago and has development and support teams in Burlington, Mass., and Hyderabad, India.

Amazon has found itself embroiled in a number of patent disputes — both as plaintiff and defendant — over the years with large competitors and smaller software shops like Soverain.

For example, the Seattle-based company is in litigation with Cendant, the owner of Orbitz and other sites.

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