PRODIGY → IBM → GROUPON / PRICELINE

I don’t often comment on patents even though I’m a named inventor on a few of them (here’s one I actually liked quite a bit). My early work at Walker Digital focused on building business method patents. A bunch of them became the basis for priceline’s Name Your Own Price business. But business method patents have been derided for some time now. And I haven’t worked on a patent since I helped the LiveAutographs team build out their system in 2005. So I’m a bit out of practice.

But I hate bullies. And I hate patent trolls. And a few weeks ago IBM started trolling hard. IBM is a prolific patenter. Their patent portfolio is worth billions of dollars. From 1993–2012, IBM inventors received nearly 67,000 U.S. patents, and in 2012 alone, received a record 6,478 patents, exceeding the combined totals of Accenture, Amazon, Apple, EMC, HP, Intel, Oracle/SUN and Symantec. IBM also buys a ton of patents —thousands of patents per year.

And they have a track record of getting paid for what they’ve patented or own. Most of the time, I’m ok with this — that’s what patents are for. But sometimes companies overstep. I think that’s what they’ve done here. In March, IBM filed a stupid patent suit against Groupon. This suit follows the same earlier suit from 2015 that they filed against Priceline, as well as Kayak and OpenTable, two companies Priceline purchased in recent years.

The suits are based on patents that stretch back to the days of Prodigy, an online service cofounded by IBM that predates the World Wide Web. Prodigy. Holy S.

In the suit against PCLN, IBM lawyers actually say “Priceline has built its business model on the use of IBM’s patents.” Wait. What?

They contemplate a system of showing applications and ads that relied more on user computers, reducing load on Prodigy servers. In the complaint, IBM lawyers write:

The inventors recognized that if applications were structured to be comprised of “objects” of data and program code capable of being processed by a user’s PC, the Prodigy system would be more efficient than conventional systems… Applications could then be composed on the fly from objects stored locally on the PC, reducing reliance on Prodigy’s server and network resources.

So the Prodigy patents are essentially running the internet and allowing you to buy everything online.

Lets unpack this a bit. The patents allow servers to isolate users and serve ads to them based on their computer address. Cookies? Prodigy owns cookies?

Bit of a stretch, no?

As Groupon founder Andrew Mason tweeted,”They finally got me — I stole the idea to sell goods and services at a discount from Prodigy.”

Priceline hasn’t settled their suit at the time of this posting — at least not that I can tell. If you know better, drop me a line.

Note that Groupon sued IBM in May for infringing on a separate patent. I think this is mostly to show how ridiculous IBM’s initial suit is. When commenting on this second lawsuit Groupon spokesman Bill Roberts said that “IBM is trying to shed its status as a dial-up-era dinosaur” by infringing the rights of “current” technology companies such as Groupon .


There are tons of new startups in travel. I see some of them. If you’ve got a new idea that you want to chat about, send it over!

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