IBM Files Lawsuit Against Priceline For Patent Infringement

(RTTNews) - Technology company International Business Machines Corp. (IBM) filed a lawsuit against online travel agency Priceline Group Inc. (PCLN) and its subsidiaries on Monday, accusing these companies of patent infringement. IBM is seeking billions of dollars in royalties.

In a complaint filed in the U.S. District court for the District of Delaware, IBM said that the Priceline and its subsidiaries, travel website Kayak.com and restaurant-reservation tool Opentable, are not paying royalties to use four IBM patents. Two of the IBM patents are from the late 1990s, while two other patents were issued in 2006 and 2009.

IBM alleged that Priceline has built its business model on the use of IBM's patents and despite repeated demands, has refused to negotiate a license to the patents. The company added that the lawsuit seeks to stop Priceline from continuing to use IBM's intellectual property without authorization.

IBM said in the lawsuit, "Rather than builds its build its business on its own technologies, Priceline has appropriated the inventions of the Patents-In-Suit. Websites under Priceline's control, including at least www.priceline.com, www.kayak.com, and www.opentable.com, use the technology claimed by the Patents-In-Suit to provide travel and reservation applications to its users."

IBM said that in October 2011, it sent a letter informing Priceline that the company was infringing at least three of its patents. IBM subsequently informed Priceline that it also infringed a fourth patent.

However, Priceline refused to engage in meaningful discussions and continued to willfully infringe IBM patents, according to IBM.

Among other relief, IBM is seeking royalties on the billions of dollars in revenue that Priceline has received based on its unlawful infringement of IBM's patented technology.

IBM had topped the annual list of U.S. patent recipients in 2014, garnering a record 7,534 patents. This also marked the 22nd consecutive year that IBM has been on top of the list, compiled by IFI Claims Patent Services, a unit of Fairview Research.

During its 22 years atop the patent list between 1993 and 2014, IBM has received more than 81,500 U.S. patents.

IBM closed Monday's trading at $155.75, down $0.97 or 0.62 percent on a volume of 3.06 million shares. However, in after-hours, the stock gained $0.16 or 0.10 percent to $155.91.

PCLN closed Monday's trading at $1,033.15, up $10.73 or 1.05 percent on a volume of 492,888 shares. However, in after-hours, the stock declined $8.14 or 0.79 percent to $1025.01.