The popular group-buying websites Groupon and LivingSocial are reportedly facing a lawsuit from a small firm in the US which alleges that they infringe on its patents.
The lawsuit has been filed by SellerBid Inc.in the Virginia Eastern District Court, in which it is alleged that Groupon, LivingSocial, OpenTable and Buywithme all infringe on two of it patents. The problem appears to be the technology the sites are using to deliver their discounts and deals to customers based on the area they live in.
This is reportedly the focus of SellerBid’s patents, which describe a:
“Method and system for improving client server transmission over fading channel with wireless location and authentication technology via electromagnetic radiation”
SellerBid is pursuing the named companies for damages and costs. Whilst the company claims it wants interest on damages caused and the opportunity to push for “further relief as the Court may deem just and proper”, the actual figures in the case have not yet been revealed.
Despite companies like Groupon being relatively new to the market, it is nonetheless likely that they will have professional indemnity insurance in place for cases such as these.