Amsterdam, Netherlands, on Aug. 26, 2016. Photo Credit: Shutterstock

IBM has asked a federal judge in Delaware to double an $82.5 million jury verdict in July against Groupon for willfully infringing four patents dating back to the early days of the internet.

In a court filing made public Wednesday night, attorneys for IBM said that Groupon never took seriously the company's patents rights and engaged in a “pattern of delay and neglect” before and during the lawsuit.

The jury's finding of willful infringement, they said, warranted a doubling of damages to $165 million and an ongoing royalty in the tens of millions of dollars to compensate IBM for its continued use of two IBM's patents, which are set to expire in 2023 and 2028. IBM is also seeking interest and attorney fees for having to litigate the case.

“From the time Groupon received notice of the patents-in-suit and for the duration of this litigation, Groupon chose to ignore its use of IBM's technology rather tha[n] take the time to investigate IBM's patent rights,” IBM said in the brief, which was initially filed under seal on Sept. 19.

“Moreover, Groupon never formulated a good faith belief in noninfringement or invalidity, mounting defenses at the last minute in the hopes of avoiding liability—a strategy that proved unsuccessful after a jury found for IBM on all issues.”

Groupon, meanwhile, has asked U.S. District Chief Judge Leonard P. Stark of the District of Delaware to wipe out the jury's finding of willfulness or to grant a new trial, saying that the verdict “cannot stand.”

The Chicago-based daily deal website said in a brief earlier this month that IBM's damages theory was fundamentally flawed and that IBM “did not come close” to proving willful infringement at trial.

“IBM improperly painted Groupon as a holdout for exercising its right to a jury trial, and took advantage of an evidentiary ruling to deceive the jury about the parties' pre-suit conduct,” Groupon said in its filing. “The ensuing finding of willful infringement has to be set aside.”

Stark last month expressed skepticism about Groupon's effort to roll back the jury verdict, as well as IBM's bid to secure enhanced damages in the case. However, the judge cautioned that his thinking could change, and he ordered consolidated briefing on the post-trial motions.

“I do not believe the post-trial briefing needs to be particularly lengthy and I do not want to let it drag out very long,” he said in an Aug. 8 letter to attorneys from both sides.

“Nothing more is needed, notwithstanding the complexity of the issues, given the court's familiarity with the case and the issues, and the fact that this case has already been tried to a jury.”

IBM said during a two-week trial that Chicago-based Groupon built its business model using IBM's patents, which describe online technology for password management and advertising, despite prior warnings. The company sued in 2016, after efforts to negotiate cross-license agreements on its patent portfolios had broken down, according to court documents.

Groupon argued IBM's case was nothing more than an attempted shake down of a newer tech firm, and that IBM was improperly using outdated patents in an attempt to patent the internet.

The Wilmington jury returned its verdict in favor of IBM after about a day of deliberations. Groupon has said it is considering an appeal.

IBM is represented by John M. Desmarais, Brian D. Matty, Karim Z. Oussayef, Laurie N. Stempler and Robert C. Harrits of New York-based Desmarais firm and David E. Moore, Bindu Ann Palapura and Stephanie E. O'Byrne of Potter Anderson & Corroon.

Groupon is represented by Edward R. Reines of Weil, Gotshal & Manges; Mark A. Perry of Gibson Dunn and John G. Day and Andrew C. Mayo of Ashby & Geddes.

The case is captioned International Business Machines v. Groupon.