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Groupon Accuses MobGob of Infringing Pricing Patent

Groupon Inc., a coupon website with 20 million users, accused competing startup MobGob LLC of using its patented online-marketing system without permission.

In a lawsuit filed yesterday in federal court in Chicago, closely held Groupon said it’s seeking an order for MobGob to destroy “all infringing products and systems in their possession, including the MobGob website.” The patent, issued in 2001, is for a way of making conditional offers that link the price of a consumer product with demand.

MobGob, based in Los Angeles, lets sellers list a fixed quantity of products for sale at a discount price. The price is available when enough people agree to the purchase. Groupon offers daily deals in 29 nations and has expanded in three years to 2,600 employees and an estimated $3 billion market value.

“MobGob’s infringing activities have damaged and will continue to damage Groupon,” the Chicago-based company said in the complaint. Unless MobGob is stopped from using the invention, the company will continue “causing harm to Groupon’s business, market, reputation and goodwill.”

The complaint also asks that MobGob be forced to pay compensation for past infringement of the Groupon patent.

Officials with MobGob didn’t immediately respond to a query sent through the company’s press e-mail.

MobGob and another Los Angeles-based company, Cy Technology Group LLC, filed a patent-infringement complaint in September against Groupon. The Cy patent was issued in March and relates to a method of community purchasing. In a court filing, Groupon denied the allegations and said the patent is invalid.

The case is Groupon Inc. v. MobGob LLC, 10cv7456, U.S. District Court for the Northern District of Illinois (Chicago). The earlier case is Cy Technology Group LLC v. Groupon Inc., 10- 7287, U.S. District Court for the Central District of California (Los Angeles).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net.

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