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Groupon Sued With LivingSocial Over Mobile Ad Patent

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Aug. 30 (Bloomberg) -- Groupon Inc. and LivingSocial Inc. were sued by a patent owner that claimed the discount online marketers are infringing protected technology for mobile-phone advertising.

XcellaSave Inc. is seeking a jury trial and unspecified damages from Chicago-based Groupon and Washington-based LivingSocial, according to two lawsuits filed yesterday in federal court in Delaware.

The companies continue “to create and disseminate promotional and marketing materials” and technical information in infringing applications that run on the iPhone and BlackBerry as well as phones that run on Android- and Windows-based operating systems, Middle Village, New York-based XcellaSave alleges in court papers.

A Groupon spokeswoman, Julie Mossler, declined to comment on the lawsuit. LivingSocial spokeswoman Maire Griffin didn’t immediately return an e-mail message seeking comment on the lawsuit.

Barclays Plc cut its rating on Groupon shares on Aug. 21, citing the potential for increased marketing costs and narrowing profit margins. Groupon fell 2.8 percent to $4.19 today in Nasdaq Stock Market trading.

The cases are XcellaSave v. Groupon, 12-cv-1085; and XcellaSave v. LivingSocial, 12-cv-1086, U.S. District Court, District of Delaware (Wilmington).

To see the patent in the lawsuit, click: 8,254,894.

To contact the reporters on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net; Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net