Jury Orders AWS to Pay $30.5 Million for Patent Infringement

A federal court jury in Delaware has awarded Acceleration Bay $30.5 million in damages for Amazon Web Services’ (AWS’s) infringement of two of its patents.

As The Register notes, Acceleration Bay is described by its founder as "an incubator and investor" that "creates ventures based on inventions by large multinational corporations."

AWS generates about $9 billion in operating profit a quarter.

As Reuters reported, the jury found that Amazon's CloudFront content-delivery system and Virtual Private Cloud virtual network infringed two patents owned by Acceleration Bay.

The jury also found that Amazon’s infringement was willful, which could cause the judge to award up to treble damages.

As Reuters explains,

Acceleration Bay sued Amazon in 2022 over the network-communications patents, which were originally obtained by Boeing. Amazon argued that its technology worked differently from Acceleration Bay's and that it had a license to the patents from the aerospace giant.

Both plaintiff and defendant moved for summary judgment. In September, both of the parties’ motions for summary judgment were granted in part and denied in part.

As the judge explained in ruling on those motions,

Plaintiff owns U.S. Patent Nos. 6,701,344 (“the '344 patent”), 6,714,966 (“the '966 patent”), 6,732,147 (“the '147 patent”), 6,829,634 (“the '634 patent”), and 6,910,069 (“the '069 patent”). Plaintiff acquired the patents from Boeing, the original assignee and owner of the patents, on December 10, 2014. … The sale agreement provides that Boeing will receive seventy-five percent of the proceeds from the settlements, sales, and licensing revenues that Plaintiff obtains from the patents….

The asserted patents are directed towards computer network systems and methods of adding participants to, removing participants from, and delivering information across computer networks.

The judge noted that AWS offers customers a variety of cloud computing products, including “Virtual Private Clouds” (“VPCs”), which are virtual networks that run on computing resources isolated from those used by its other customers, and services for connecting VPCs with each other and with other networks.

Acceleration Bay asserted that AWS was infringing its patents via VPC-related products VPC, Transit Gateway, CloudFront, Elastic Cloud Computing (“EC2”), Elastic Kubernetes Services (“EKS”), GameLift, and App Mesh.

Acceleration Bay won $23.4 million in another patent trial in May after a jury found that multiplayer features of Activision Blizzard's games "World of Warcraft," "Call of Duty: Black Ops III" and "Call of Duty: Advanced Warfare" violated two of its patents. One of these patents was also found to have been infringed by Amazon.

However, as The Register notes,

Acceleration Bay has also lost cases asserting some of the very same patents at issue in the AWS and Activision matters, with a judge dismissing similar arguments against Electronic Arts and Take-Two Interactive in 2022 and 2020, respectively.

Also, says The Register,

In a blog post announcing Take-Two's victory, lawyers for the Grand Theft Auto and NBA 2K maker described Acceleration Bay as a "patent assertion entity" - a nice way of saying "patent troll”…

The case is Acceleration Bay LLC v. Amazon Web Services Inc, U.S. District Court for the District of Delaware, No. 1:22-cv-00904.