IBM wins $45M jury award in Zynga patent lawsuit

IBM’s patent farm has yielded another bumper crop, with a Delaware jury awarding Big Blue $45 million in damages from mobile games maker Zynga. 

Jurors decided [PDF] last week that Farmville maker Zynga, and its subsidiary Chartboost, had infringed on two IBM patents – including one from way back in the Prodigy days of 1989. In its complaint [PDF], IBM described the patents as core to the online networking and advertising structure of the modern internet, and argued that while other big tech companies have licensed the patents in suit, Zynga has spent “almost eight years” delaying discussions. 

“Though Zynga is nominally a gaming company, its success relies on sophisticated data capture, processing, and analytics technology … [which] rely on prior innovations in big data, analytics, and online advertising made by IBM and others,” IBM said in its 2022 complaint. 

“IBM is pleased with the jury verdict that recognizes Zynga’s infringement of IBM’s patents,” an IBM spokesperson told The Register.

The patents mentioned in the case vary in scope and age. There’s the “849” patent based on an original filing by Prodigy in 1989 that proposes “a method for presenting advertising in an interactive service provided on a computer network,” followed chronologically by the “719” patent that proposed a dual model-view-controller approach that splits architecture between a client and server to reduce latency. The 719 patent was filed in 2000.

The “346” patent, filed in 2005, defines “a runtime user account creation operation within a single-sign-on process in a federated computing environment,” while the “904” patent from 2006 involves redefining online promotions to manage them from the bottom up, instead of a traditional top-down approach. 

The jury specifically found that Zynga had infringed on the 849 and 719 patents, with the $44.9 million verdict split two ways – $40 million awarded for the 849 violation, and the rest for violations of 719. Patents 346 and 904 weren’t mentioned in the jury form.

Zynga’s approach in the trial was to try to convince jurors that infringing claims of patent 849 and 719 were invalid, and that two of the claims in the case weren’t patentably distinct, but it failed to sway anyone. 

“We are disappointed in the verdict; however, believe we will prevail on appeal,” Zynga parent company Take-Two Games’ spokesperson Alan Lewis, told us. 

IBM’s patent necromancers strike again

Dredging up ancient patents to wage war isn’t a new tactic at IBM – the company even notes in its original lawsuit against Zynga that it has more than 80,000 patents around the world that it is happy to wield as a bludgeon to “protect its innovations.” 

Oh, and benefit humanity too. 

“Like the research upon which the patents are based, IBM’s patents also benefit society,” lawyers for the company argued. “IBM’s commitment to creating a large patent portfolio underscores the value that IBM places in the exchange of innovation, and disclosure of that innovation, in return for limited exclusivity.” 

This isn’t even the first time IBM has litigated these particular patents, either. 

IBM sued Priceline for violating its patents in 2015, including the 849 and 346 patents, settling the matter in 2017 for an undisclosed amount. Similar undisclosed settlements have been reached over the years in cases against Airbnb and Rakuten.  

Groupon agreed to pay IBM $57 million for infringing on some of the same patents, and a case against Expedia appears to have been dropped by both parties. 

“The modern technology industry has recognized IBM’s pioneering innovations in areas including big data analytics, digital marketplaces, and web-based business,” IBM said in its complaint against Zynga. “As a result, dozens of modern technology companies, including Amazon, Apple, Google, and Facebook, have agreed to cross licenses with IBM. Defendants have not.” 

Zynga should be able to afford the fine if it doesn’t end up winning on appeal. According to its parent company Take-Two’s most recent quarterly earnings report [PDF], the company has around $1.5 billion on hand. That said, Take-Two also lost $212 million last quarter, so that $45 million judgement could put a dent in the reserves. ®