Groupon Accused of Infringing Patent by Ewinwin

Groupon Inc., a daily coupon website with more than 35 million users, has been sued by a Florida company that claims the site is infringing four patents related to a Web strategy that brings together buyers.

Closely held Ewinwin Inc., based in Tampa, Florida, said it’s been operating since 1999 and maintains a site where businesses promote their products and set prices based on the number of customers who place orders. The four patents were issued in 2006, 2007, and in March and April.

The patent complaint is the second filed by a rival site against Chicago-based Groupon, which has expanded in two years to 300 markets with 2,600 employees and is negotiating a possible $6 billion purchase by Google Inc. Ewinwin contends it’s entitled to a share of the profits from the Groupon site.

For every sale made by Groupon, “Ewinwin suffers a further competitive disadvantage in that Groupon receives a substantial portion of said sale and illicitly builds customer loyalty and brand recognition notwithstanding the fact that Ewinwin entered the group-buying market 10 years prior to Groupon,” Ewinwin said in the complaint, filed yesterday, in federal court in Tampa.

50 Percent Cut

Groupon sends users daily messages offering discounts on products and services. It keeps 50 percent of every deal sold, while businesses benefit from a rise in new customers. Deals, known as groupons, activate when a certain number is sold, encouraging users to recommend offers to friends.

Ewinwin, in its 25-page complaint, described itself as “an active and contributing member to the Tampa and Central Florida economy.” More than 30 Central Florida businesses have been featured on the site, and the company helps fund a high- technology grant program in the region, the company said.

“Notwithstanding the fact that Ewinwin was founded almost a decade prior to Groupon -- and continues to operate today -- and has developed a portfolio of ten patents, Groupon contends that ‘we came up with the patent-pending idea for Groupon,’” Ewinwin said in the complaint.

Groupon’s only patents were bought from other companies, including one owned by Mobshop, a site that closed in 2001, according to the complaint.

Groupon has accused the competing site MobGob LLC, based in Los Angeles, of infringing that patent, in retaliation for an infringement suit MobGob filed against Groupon in September.

Aaron Zamost, a spokesman for Mountain View, California- based Google, referred queries on the suit to Groupon. Julie Mossler, a spokeswoman for Groupon, declined to comment on the new complaint.

The case is Ewinwin Inc. v. Groupon Inc., 10cv2678, U.S. District Court for the Middle District of Florida (Tampa).

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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