Amazon Dispute Could Put IBM Software Customers In Legal Jeopardy

In a counterclaim filed Thursday in response to an IBM patent infringement lawsuit, Amazon said IBM's WebSphere middleware product and other information management technologies violate Amazon patents on methods for the "querying and interpretation of semistructured information" and "refining search queries."

As a result, "IBM -- and IBM's customers who deploy such services and products -- infringe's patents," Amazon charged in court documents filed in the U.S. District Court for eastern Texas.

That could be bad news for the thousands of IBM customers who depend on WebSphere and other IBM middleware to facilitate communication between key business applications.

And it would be horrible news for IBM itself if the court finds in favor of Amazon. In the third quarter, WebSphere and other middleware products generated $3.4 billion in revenue for IBM, accounting for 77% of its software sales for the period.

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However, Amazon's lead attorney in the case says that the Web merchant is, for now at least, not likely interested in pursuing WebSphere users. "Amazon's goal is to be left alone to conduct its business and not be bothered by people like IBM," says Ruffin Cordell, an attorney at Washington, D.C.-based Fish and Richardson, which is handling the case for Amazon.

That being said, Amazon isn't out for a quick settlement, says Cordell. "We didn't start this fight," he says.

Keeping its sights squarely on IBM, and not its customers, is probably a smart move for Amazon. The company is itself moving into the market for enterprise middleware and storage under offerings called EC2 and S3. Suing potential future customers would not be the best way to announce its presence in the market.

As far as IBM is concerned, however, Amazon makes no secret of its contempt for what it calls "a company buit on business principles and innovations of the past."

Amazon says the original suit filed by IBM is a defensive move by an old-line tech company that can't compete in the Web 2.0 economy. "IBM has never been seriously recognized for providing the nimble, fast-paced developments and services needed to offer innovative e-commerce and other business solutions to customers over the Internet," Amazon said in its counterclaim.

What's more, the retailer suggests that IBM is effectively pulling an Al Gore by claiming to have invented the Internet. "If IBM's claims are believed, then not only must pay IBM, but everyone conducting electronic commerce over the World Wide Web (indeed, every Website and potentially everyone who uses a Web browser to surf the Web) must pay," Amazon says.

In its original lawsuit, filed in October, IBM claimed that several features on Amazon's Web site, such as the popular user recommendation system, violate a broad swath of IBM patents relating to e-commerce methodologies. Amazon says the claims are without merit.

Both companies are now seeking unspecified damages from the other.