A US federal jury finds Zynga infringed on two IBM patents related to web-based communications and orders the game maker to pay $44.9M; Zynga plans to appeal
Blake Brittain / Reuters :
Context & Ripple Effects
The verdict extends IBM's record of using jury trials to enforce technology patents: it previously sought damages from Groupon over ecommerce patents and later won an $83M Groupon verdict. The new case applies that enforcement strategy to web-based communications in games.
Because Zynga plans to appeal, the $44.9M award is an immediate legal result rather than a final resolution. Still, the jury finding gives IBM a fresh courtroom validation for the two asserted patents.
First-order effects
- Zynga faces a $44.9M damages judgment and the cost and uncertainty of an appeal; IBM gains a jury verdict supporting its patent claims.
- The ruling puts Zynga's use of the disputed web-based communications technology under direct legal scrutiny while the appeal proceeds.
Second-order effects
- Other companies using comparable web-based communications features may reassess their exposure to IBM's patents, especially after IBM's earlier Groupon patent suit resulted in a jury award.
- The decision strengthens IBM's leverage in any licensing discussions tied to the patents, while Zynga has an incentive to seek reversal or limit the award on appeal.
Third-order effects
- If IBM continues converting patent assertions into jury verdicts, operating companies may place greater weight on patent clearance and licensing for widely used online features.
- The case also underscores that appeals remain a key check on large patent verdicts, as shown by the earlier appeals-court affirmation of a VirnetX award against Apple.
The trend: Patent owners are increasingly using litigation and the threat of damages awards to turn older software and communications intellectual property into licensing leverage.