Groupon sues 'dial-up-era dinosaur' IBM for alleged software patent infringement

Online marketplace Groupon has filed a countersuit against IBM with the federal court in Chicago, Illinois, accusing the company of software patent infringement. Filed on Monday (9 May), Groupon's lawsuit comes two months after IBM accused the e-commerce company of infringing on four of its software patents in the original federal suit.

In the latest twist in the on-going feud between the two companies, Groupon said: "IBM, a relic of once-great 20th Century technology firms, has now resorted to usurping the intellectual property of companies born this millennium."

"Unfortunately, IBM is trying to shed its status as a dial-up-era dinosaur by infringing on the intellectual property rights of current technology companies, like Groupon,"the Groupon spokesperson told Fortune in an email. "We look forward to having this matter considered."

The counter suit claims IBM's WebSphere Commerce product, which allows merchants to track sales and send targeted marketing messages to customers based on their real-time locations and use of social media, violates a Groupon patent.

The daily deals website operator is seeking royalties on "the billions of dollars in revenue that IBM has received based on its unlawful use of Groupon's patented technology." However, IBM spokesman, Doug Shelton, told Reuters that the "counter suit is totally without merit".

"Over the past three years, IBM has attempted to conclude a fair and reasonable patent license agreement with Groupon, and we are disappointed that Groupon is seeking to divert attention from its patent infringement by suing," Shelton said.

In March, IBM filed a federal suit against Groupon in Delaware, claiming the company infringed on four patents, two of which relate to Prodigy, a late-1980s, pre-internet online service co-founded by IBM.

The tech giant had previously clashed with younger tech companies including Twitter, Amazon, OpenTable and Priceline over similar claims, arguing that the online services built their technology based on patents related to Prodigy and essentially hadn't paid for the proper licenses.

Known for its aggressive patent strategies, IBM -also known by the nickname of 'Big Blue' - has continued to acquire more US patents every year than any other company for the last 23 years. In 2015, the company acquired 7,355 US patents in just one year alone.