IBM Sues Priceline, Kayak Over Royalties for Late '90s Patents
Don't Miss Out — (Bloomberg) — IBM is suing Priceline Group Inc. and its subsidiaries, travel website Kayak and restaurant-reservation tool Opentable, after failing to reach a patent-licensing agreement.
Context & Ripple Effects
The Priceline suit is the opening move in what the related coverage shows became a sustained enforcement campaign by IBM against consumer internet companies built on late-1990s-era web technology. After failing to reach a licensing deal with Priceline Group, whose portfolio includes [[a:|Kayak]] and OpenTable, IBM turned to the courts — the same path it took with Groupon over four ecommerce patents, which ended two years later with an $83M jury award and revealed that Amazon, Facebook and Google had each licensed the relevant patents for $20M-$50M.
First-order effects
- Priceline Group, Kayak and OpenTable now face royalty claims on patents predating their businesses' core features, with settlement as the alternative to litigation costs after direct licensing talks failed.
Second-order effects
- The playbook extends across the sector: IBM later sued Expedia and its subsidiaries and Zillow over list-based search patents, suggesting other travel and listings platforms are evaluating whether to license preemptively or fight.
Third-order effects
- With the Groupon verdict validating six-figure-per-defendant valuations for legacy software patents, large patent holders can run licensing programs as a standing revenue line, pushing internet companies toward routine portfolio audits and cross-industry licensing norms.
The trend: Legacy patent holders like IBM are converting dormant 1990s software portfolios into recurring royalty streams from today's consumer internet platforms, with courtroom wins setting the price of entry.