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

Groupon has agreed to pay IBM $57 million to resolve their intellectual property dispute—one which resulted in an $82.5 million infringement jury verdict against Groupon for infringing four e-commerce patents dating back to the early days of the internet.

The companies announced the accord Monday.

Under the terms of the agreement, Chicago-based Groupon will pay IBM $57 million to settle and end the lawsuit in Delaware federal court. The settlement also included a long-term patent cross-license agreement between the companies, IBM and Groupon said.

The agreement also prevents IBM from asserting the rest of its patent portfolio against Groupon in future suits.

“This agreement further demonstrates the value of our intellectual property that results from this innovation,” William Lafontaine, IBM's general manager of intellectual property, said in a joint statement. “We're pleased this matter has been resolved.”

The settlement came as IBM was arguing that the jury's finding of willful infringement warranted a doubling of damages to $165 million, as well as an ongoing royalty in the tens of millions of dollars to compensate IBM for its continued use of two IBM patents, which are set to expire in 2023 and 2028.

Groupon, meanwhile, had attacked IBM's damages theory as fundamentally flawed, saying the technology giant “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 a post-trial brief last month. “The ensuing finding of willful infringement has to be set aside.”

U.S. District Chief Judge Leonard P. Stark of the District of Delaware had expressed skepticism about both parties' post-trial motions in August, though he cautioned that his thinking could change.

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IBM's case was nothing more than an attempted shake down of a newer tech firm, and that IBM was improperly using outdated patents in an attempt to patent the internet.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

IBM and Groupon on Sept. 28 entered a stipulation of dismissal, which Stark approved on Monday, according to an online docket-tracking service. In the press release, the companies said IBM would consider making available certain Groupon products and exclusives to its employee base as part of its corporate benefits offer.

“The license we have acquired to IBM's patent portfolio will enable Groupon to continue to build amazing products for consumers and small businesses around the world. We look forward to sharing these products directly with IBM employees,” said Bill Roberts, Groupon's vice president of global communications.

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

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

The case is captioned International Business Machines v. Groupon.