IBM’s Patent Infringement Case Against Amazon – There Goes The Neighborhood!

The blogosphere is a buzz today with news of IBM’s pending litigation against Amazon for patent infringement.  IBM holds more patents than any other corporation.  They also continue to file a dizzying amount of new patents each year. 

Why Big Blue chose now to take action agains the Seattle-based web pioneer isn’t yet clear to us non-Armonkians (people other than those who work at IBM corporate headquarters).  There are many reasons companies will hold patents and not extract a licensing fee.  But the fact the Amazon is not, repeat not, an IBM customer isn’t lost on this kid.  If business makes for stranges bedfellows, then not doing business makes for a hostile litigious environment.

I had luch yesterday with my good friend Eric, who just flew back from a week in Japan with the good people from Thomson.  They were on their cross-country tour to promote the new MP3 5.1 surround format.  How many people know that Thomson is the licensing agent on behalf of Fraunhofer, the German educational entity who holds the MP3 patent? MP3 is the most widely supported compressed audio codec in the world.  Here’s an organization that exists entirely on its dividends from licensing its core technology, an audio codec. 

And then there’s IBM, with the world’s biggest treasure trove of Intellectual Property (IP).  The irony of the situation is that IBM didn’t have much to do with the patent it claims Amazon is infringing upon.  Rather, it inherited this patent when it acquired the IP of the ill-fated Prodigy remains.  In that transaction, Slim Pickens walked away with the network and customers, while IBM, perhaps in hindsite, took home the crown jewels — the many early technology patents awarded to the first mass consumer online network. But if this is a sign O the times from Armonk, then it’s a hard rain gonna fall.  What’s next?  Time Warner trying to cash in on the GIF picture format based on an initial patent by Compuserve, who was acquired by AOL, who was in turn acquired by Time Warner (or was it the other way around, I keep forgetting – although everyday I walk by the Time Warner Towers, I have yet to see AOL’s name anywhere on the building).

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