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Originally published May 8, 2007 at 12:00 AM | Page modified May 8, 2007 at 5:46 PM

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Amazon settles patent-infringement suits with IBM

Amazon.com and IBM have settled all their patent-infringement lawsuits and signed a long-term patent cross-license agreement, the companies...

The Associated Press

Amazon.com and IBM have settled all their patent-infringement lawsuits and signed a long-term patent cross-license agreement, the companies said today.

Under the deal, Seattle-based Amazon will pay International Business Machines an undisclosed amount of money, and each company will let the other use some of its technology.

Amazon spokeswoman Patty Smith said the settlement payout will not affect financial results for the online retailer's current second quarter, and that Amazon has already factored the money into its financial guidance for the second quarter and full fiscal year.

In October 2006, Armonk, N.Y.-based IBM alleged in two lawsuits that key components of Amazon's retailing Web site were developed and patented by IBM.

IBM accused Amazon of infringing on five patents related to how the site recommends products to customers, advertises and stores data.

In December, Amazon countersued, denying the allegations and charging IBM with violating five of Amazon's patents for ventures including IBM's WebSphere business software.

In a brief joint statement released today, the companies did not indicate how they settled their dispute.

Scott Hayden, Amazon's vice president of intellectual property, called IBM's patent portfolio "the largest and strongest in the IT industry" and said that Amazon's license to use IBM's Web technology patents "gives us greater freedom to innovate for our customers."

Dan Cerutti, IBM's general manager of software intellectual property added, "We're pleased this matter has been resolved through negotiation and licensing. We look forward to a more productive relationship with Amazon in the future."

Shares of Amazon.com closed up $1.01 at $61.83 today, while IBM shares gained 53 cents at $103.29.

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