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October 26, 2006

E-commerce belongs to IBM

IBM's decision to sue Amazon.com for "willfully" violating some of its patents has got the whole e-commerce world talking, or it soon will. Despite apparently being in conversation for the past four years to iron out their differences, which presumably involved IBM trying to extract some kind of recompense from the e-commerce giant, the two have failed to find agreement. So Big Blue has decided, rather cynically some would say, to make its move in the courts at a time guaranteed to cause maximum disruption. After all, it's not quite the eleventh hour before the busy Christmas retail period, but let's say five to 11 – I've already seen the electric cables dangling above Oxford Street, portending the arrival of garish neon Santas.

The fact that IBM's patents pertain to things as fundamental to the industry as online advertising and ordering items using an electric catalogue, will surely mean the repercussions will be felt by countless other online retailers. It would be fair to assume IBM is hoping to leverage its stand-off with the grand daddy of e-commerce to scare some smaller online retailers into coughing-up some readies.

So there will no doubt be many firms watching how this one develops with a mixture of fear and dread, but to give Big Blue its due, you've got to admire the kind of foresight that leads a firm to patent technology – apparently dating from the late 80s in some cases – years before e-commerce was even a twinkle in its daddy's eye.

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