Amazon Hit With $535 Million Patent Suit Judgment, Seeks to Cut Fulfillment Costs

Amazon.com’s Amazon Web Services, the world’s largest cloud-service provider, owes tech company Kove $525 million for violating its patent rights in data-storage technology, an Illinois federal jury said on Wednesday.

The jury determined that AWS infringed three Kove patents covering technology that Kove said had become “essential” to the ability of Amazon’s cloud-computing arm to “store and retrieve massive amounts of data.”

An Amazon spokesperson said the company disagrees with the verdict and intends to appeal. 

Kove’s lead attorney Courtland Reichman called the verdict “a testament to the power of innovation and the importance of protecting IP (intellectual property) rights for start-up companies against tech giants.” 

Chicago-based Kove sued Amazon in the U.S. District Court for the Northern District of Illinois in 2018. The company said in the lawsuit that it pioneered technology enabling high-performance cloud storage “years before the advent of the cloud.”

Kove alleged that AWS’ Amazon S3 storage service, DynamoDB database service and other products infringed the cloud-storage patents. The jury agreed with Kove on Wednesday that AWS infringed all three Kove patents at issue, though it rejected Kove’s contention that AWS violated its rights willfully.

AWS had denied the allegations and argued that the patents were invalid.

Kove also sued Google last year for infringing the same patents in a separate Illinois lawsuit that is still ongoing.

 (Reporting by Blake Brittain in Washington; Editing by Christopher Cushing and Sonali Paul)

Amazon CEO sees opportunity to lower fulfillment network costs

Amazon.com CEO Andy Jassy said the e-commerce firm sees opportunity to reduce costs in its fulfillment network, after trimming staff in a number of divisions over the recent months.

“As we look toward 2024 (and beyond), we’re not done lowering our cost to serve. We’ve challenged every closely held belief in our fulfillment network, and reevaluated every part of it, and found several areas where we believe we can lower costs even further while also delivering faster for customers,” Jassy said in a letter to shareholders on Thursday.

Shares of Amazon, which is also the world’s leading cloud computing services provider, were down about 1 percent in premarket trading.

Over the past few months, the company has laid off hundreds of staff in divisions including Amazon Web Services, Prime Video service, healthcare business and Alexa voice assistant unit, extending its massive job cuts over the past two years into 2024.

Copyright 2024. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.