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Amazon Settles Patent Suits With IBM

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

Under the deal, Amazon.com will pay International Business Machines Corp. an undisclosed amount of money, and each company will shares some of their technology.

Amazon.com Inc. spokeswoman Patty Smith said the settlement will not affect financial results and that Amazon.com 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.com's retailing Web site were developed and patented by IBM.

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

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

No further details were released about the settlement Tuesday.

Scott Hayden, Amazon.com's vice president of intellectual property, called IBM's patent portfolio "the largest and strongest in the IT industry" and that Amazon.com'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 rose 54 cents to $61.31 in midday trading, while IBM shares were up 46 cents to $103.22.

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