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IP, Patent

Group Purchasing Power – An Interesting Use Of The Patent Marketplace

There’s nothing quite like a patent war over group, pre-purchase discounts to get people excited, is there?  A couple of different news outlets have picked up on a lawsuit by Groupon against apparent competitor MobGob.  Of course, each of those stories missed what paidContent.org‘s Joe Mullin, and Bloomberg‘s Susan Decker noticed, which is MobGob’s botched attempt to throw the first stone at Groupon.  (See Groupon vs. MobGob: Patent Battles Hit The Daily-Deal Business and Groupon Accuses MobGob of Infringing Pricing Patent)  According to Mullin, Cy Technology tried to sue Groupon back in May on US Patent 7,672,897.  Someone at Groupon must have noticed that the inventor’s names were the same guys who were behind MobGob, and insisted that the operating company be made a party to the suit.  By September, the gig was up as a lawsuit was filed jointly by Cy Technology and MobGob against Groupon.

Since then, Groupon moved quickly, and by September was able to acquire US Patent 6,269,343 from MobShop (apparently no longer in the group buying business).  This is no insignificant move, as the MobShop patent predates Cy Tech’s earliest filing date by more than two years.  This news comes on the heels of Facebook’s move to use patents acquired from HP and Applied Materials to countersue a New England-based media company’s infringement claims.

Could this be part of an emerging trend of using strategic patent acquisition to protect a business model?  According to Groupon’s website, it wasn’t formed until 2008, so a patent application filed by its founders and originators would have done little to defend against MobGob’s earlier assault.  However, by acquiring the MobShop patent, Groupon is combatting two threats. One imminent (MobGob) and one hypothetical (a potential suit by MobShop or another holding company that might have bought MobShop’s patent).

Of course, lurking in the background is Google, rumored to be buying Groupon for $3 Billion dollars.



8 thoughts on “Group Purchasing Power – An Interesting Use Of The Patent Marketplace

  1. LOL, this case ably illustrates the Golden Rule of patent litigation: Sue not, lest ye be sued.

    Posted by patent litigation | November 29, 2010, 6:37 pm
    • Thanks for reading! I received more info today about Groupon’s counterclaim, which on closer inspection may not be strong enough to scare their competition into backing down. In any event, my sense is that Groupon is taking things a bit personally. You don’t see that very often in patent litigation, but when it happens it can be very interesting.

      Posted by Patrick | November 30, 2010, 12:46 am


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