IBM and Amazon.com settle all patent litigation

Amazon.com has paid IBM an undisclosed amount of money to settle all outstanding patent lawsuits between the two companies. They have also agreed a long-term patent cross-licensing agreement, giving Amazon access to IBM's patents on Web technology, the vendors said.

The agreement will give Amazon greater freedom to innovate, the online retailer said, while IBM for its part looked forward to a more productive relationship between the two companies than they have had of late..

The two companies have been haggling over patents since September 2002: that's when IBM said it first approached Amazon about a licensing deal.

However, they failed to reach an agreement, and so IBM sued Amazon in October 2006, alleging that the company was infringing on a number of its U.S. patents, including those relating to storing data in an interactive network (number 5,442,771), adjusting hypertext links with weighted user goals and activities (5,446,891) and ordering items using an electronic catalogue (5,319,542).

Two months later, Amazon countersued, claiming that IBM's WebSphere application server infringed on Amazon patents.

In its suit, Amazon also said IBM's patent claims were so broad as to be ridiculous, as they would potentially cover everyone using a Web browser to surf the Web. The suit also pointed out that IBM had waited for seven years after Amazon launched its online store, finally approaching the Internet company just as it became profitable.

In the field of patents, Amazon is perhaps best known for its claim to ownership of the one-click online shopping method. It sued bookseller rival Barnes & Noble.com for infringement of this patent in 1999, with the two finally settling the case on undisclosed terms in March 2002.