IBMs Amazon Lawsuit Using Classic Schoolyard Bully Tactics

Analysis: IBM was being painfully honest when it said this lawsuit is about generating more licensing revenue. What it's not saying is that the desired revenue is not from Amazon.

IBMs recent lawsuit against Amazon for infringing an 18-year-old patent has little to do with attacking the underpinnings of e-commerce, nor does IBM truly believe that Amazon ripped off its ideas. Its just the same schoolyard tactics that have been around for centuries.

Think about the classic advice given to the new boy in school. On his first day, he discovers that the school has the requisite bullies. What he does that first day on the playground will likely set the tenor for the rest of the year. The advice is that he go up to the biggest and meanest bully and stare him down, fighting if necessary. Why? Win or lose, hes sending out a message and making it much more likely the other bullies will leave him alone.

IBM is being painfully honest when it says that the lawsuit is about boosting licensing revenue. A cynical view is that IBM may not even care that much about beating Amazon in court. IBM is negotiating with a large number of e-tailers, trying to get them to pay on some very old IBM patents that anticipated key e-commerce issues, such as Web advertising and online catalogs.

/zimages/5/28571.gifClick here to read more about IBMs lawsuit.

The only reason those e-commerce sites would pay is if they believed IBM would sue them otherwise. In the same way that the typical schoolyard bullys tactical options are usually limited to "ignore," "verbally torment" and "beat up," IBMs weapons against alleged patent infringers are limited to "ignoring," "suing" and "threatening to sue."

By taking on the giant of e-commerce, IBM is hoping that the other sites will think, "If they sued Amazon, then theyll probably sue us, too. Settle." If it wins the Amazon lawsuit, thats gravy. Sweet-tasting and profitable gravy perhaps, but gravy nonetheless.

The patents that IBM says are being violated (included are links to the full texts of those patents) are U.S. 5,796,967: Presenting Applications in an Interactive Service; U.S. 5,442,771: Storing Data in an Interactive Network; U.S. 7,072,849: Presenting Advertising in an Interactive Service; U.S. 5,446,891: Adjusting Hypertext Links with Weighted User Goals and Activities; and U.S. 5,319,542: Ordering Items Using an Electronic Catalogue.

In talking with industry analysts and vendors about the IBM lawsuit, a popular theme is that IBM did something bad when it applied for patents for such obvious capabilities and that this is just because Amazons one-click checkout patent application was a similar overreach.

I must respectfully disagree. First of all, even if the technique was extremely broad and obvious—the one-click Amazon patent might be—its certainly not fair to criticize the company that applies. The patent office is the one that approved it, and any criticism about the wisdom of such a move rightfully needs to be directed there.

Next Page: Give IBM some credit.