Amazon plans to appeal $525m cloud storage verdict
An Illinois federal jury ruled in favour of a Chicago-based software company, finding Amazon Web Services infringed its patented cloud storage technology | Ruling will help plaintiff secure a payout should Amazon seek a deal, says lawyer.
Amazon Web Services says it will appeal a $525 million damages verdict awarded to a software company in a dispute related to cloud storage technology.
The US District Court for the Northern District of Illinois delivered its verdict, on April 10, 2024, issuing a win for Kove IO against Amazon.
The Illinois federal jury found Amazon had infringed on three of Kove’s patents covering cloud storage technology.
An Amazon spokesperson said: “We disagree with the ruling and intend to appeal. We thank the jury, which also acknowledged that AWS did not wilfully infringe on patents.”
While the jury did find that the infringement was not willful, it also dismissed Amazon’s counterclaims asserting non-infringement, invalidity, unpatentability, and unenforceability of the three patents.
Michael Word, a member at Dykema, said: “This is certainly a substantial win for the plaintiff, and further helps to establish the Northern District of Illinois as a promising venue for patent infringement claims.”
He said there are post-trial motions that need to be resolved which “might help Amazon’s case on appeal”.
“The question now is whether and how long the $525 million judgment will stand,” questioned Word.
He predicted the judgment would help Kove in negotiating a substantial payout from Amazon should it attempt to resolve the matter pending Amazon’s appeal.
However, Word argued that $525 million is “barely a drop in the bucket” for Amazon given that its AWS services brought in over $90 billion in revenue last year.
Case background
Kove, a Chicago-based computer storage and data management technologies company, filed its complaint against Amazon in December 2018.
In the complaint, Kove alleged that Amazon infringed upon its patents relating to technology enabling high-performance, hyper-scalable distributed cloud storage—US patent numbers 7,814,180; 7,233,978; and 7,103,640.
Kove argued its inventors developed this technology years before the introduction of the cloud and obtained patents for their innovations.
According to the complaint, Amazon’s cloud storage business faced limitations on the ability to store and retrieve massive amounts of data until it began using Kove's patented technology.
By infringing upon Kove's patents, Amazon was able to become the first large-scale vendor of economical cloud infrastructure and services—becoming what is believed to be Amazon's largest profit centre, Kove claimed.
Kove emphasised its status as a small, innovative product company competing against industry giants like Amazon.
The company argued that respect for its IP is essential to fair competition, as smaller competitors cannot outspend dominant global players in legal battles.
Amazon’s allegedly infringing products and services included Amazon Simple Storage Service (S3) and DynamoDB, among others. These services allow users to store and retrieve data in the cloud with scalability, reliability, and low latency, all features enabled by Kove's patented technology.
Kove was represented by Reichman Jorgensen Lehman & Feldberg, Bryan Cave Leighton Paisner, and MZF Law Firm.
Amazon was represented by Fisch Sigler.
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