Priceline.com Sues Microsoft for Patent Infringement

Travel reservation company Priceline.com Inc. Wednesday filed suit against Microsoft Corp., claiming Microsoft’s Expedia hotel booking service infringes on its patent.

Priceline’s (PCLN) “name-your-price” hotel service is protected by three U.S. patents. The company alleges that Expedia’s new hotel offering too closely resembles its system, and accuses Microsoft (MSFT) of stealing Priceline’s commerce system technology and related elements. It is seeking declaratory relief, permanent injunctive relief and actual and punitive damages. No financial details were disclosed.

Priceline accuses Microsoft of stealing the technology at the center of the lawsuit during a series of meetings before the company went public. Priceline said it shared technical data with Microsoft under a non-disclosure agreement, during talks aimed at establishing a partnership which never materialized.

The federal suit, filed in Connecticut, also charges that Microsoft’s conduct is in violation of the Connecticut Unfair Trade Practices Act.

Priceline and Microsoft previously worked together over an eight-month period to structure a mutually beneficial business relationship, including possible joint marketing programs and licensing of priceline.com’s intellectual property. Priceline accused Microsoft of stealing its technology during that time, even though the two had signed nondisclosure agreements.

“When Microsoft first announced its Hotel Price Matcher copycat service we were, quite frankly, stunned by its blatant disregard for our prior relationship and our property rights,” said Richard S. Braddock, Priceline.com’s chairman and CEO. “We believe that Microsoft was well aware of our success as Priceline.com’s innovation and investment generated tremendous consumer response.”

Microsoft could not be reached for comment.