Online retailer Chewy Inc. is taking on tech giant IBM like a tenacious Miniature Schnauzer challenging a powerful Rottweiler in a dogfight over how it uses its website to peddle pet products.
Chewy, of Dania Beach, Florida, is trying to stave off a patent infringement lawsuit by attacking IBM first, characterizing the Armonk company as a troll.
“IBM has an army of lawyers who try to patent just about anything and then aggressively seeks to license those patents,” Chewy claims in a Feb. 15 lawsuit filed in U.S. District Court, Manhattan.
Chewy said it has not violated any patents, but in challenging IBM it risks losing $83 million when it could have settled for $36 million.
It is “widely accepted,” Chewy states, that IBM does not make or sell anything from thousands of patents it has obtained over the past 20 years. Instead, it demands that companies pay large royalty payments to avoid costly litigation.
Companies that have heeled to IBM”™s demands include Airbnb, Expedia, Groupon, Priceline and Twitter, according to the lawsuit, basically surrendering and paying IBM loads of money.
The IBM corporate media relations office did not respond to an email asking for its side of the story.
The standoff began in July when IBM sent Chewy CEO Sumit Singh a notice of infringement on four IBM patents.
“IBM views your continued use of these inventions as a serious matter,” the letter states. And while IBM prefers a negotiated business resolution, it has been forced to sue companies like Amazon to resolve misuse of its patents.
The patents, issued from 2004 to 2017, cover methods for presenting advertising, formatting web content, associating advertisements with search results and magnifying objects.
Manhattan attorney Joshua L. Raskin responded on behalf of Chewy, stating that the claims are baseless and declining an invitation to discuss a resolution.
IBM was not playing. It suggested that sitting out a meeting would cost Chewy more than $83 million in damages and royalties. But the tech company was willing to give Chewy a license for $36 million.
“This offer expires Dec. 31, 2020,” the IBM letter purportedly stated.
Raskin didn”™t bite. He reiterated Chewy”™s positions that it had not violated patents and would not attend a meeting.
Refusing to engage in discussions, IBM snarled back, risked litigation and “enhanced damages for willful infringement.”
Then Chewy tried to corner IBM.
Waiting patiently until after the IBM deadline passed, Raskin wrote on Jan. 4, “None of those claims are valid.” Chewy was willing to discuss licensing, but only after IBM has responded adequately to Chewy”™s position that no violation had occurred.
“Until that time,” he stated, “Chewy does not see how such a discussion will be productive.”
IBM stood its ground.
“Triggered by Chewy”™s refusal to engage in meaningful discussions to clarify points of contention,” the company replied, “IBM will be forced to take more aggressive measures.”
Now underdog Chewy is looking for help.
“Chewy is under reasonable apprehension that it will be sued by IBM for the alleged infringement of the asserted patents,” the complaint states.
It is asking the court to declare that it has not infringed the IBM patents and to award Chewy costs, expenses and attorney fees incurred in the fight.
Good for Chewy!! Somebody needs to take on these Big Tech companies!!!
I’m with Chewy. I order from Chewy. IBM is a horrible company. They only care about the almighty dollar. Sent tens of jobs to other countries. Tens of thousands employees lost their jobs in the USA.