Amazon Web Services (AWS) has been ordered to pay $30.5 million after a U.S. jury found the tech giant guilty of patent infringement.
The lawsuit, filed by Acceleration Bay, centered around AWS’s use of patented technologies in its Cloudfront content delivery network and Virtual Private Cloud (VPC) service.
The patents in question, which were originally owned by Boeing before being acquired by Acceleration Bay, involve innovations that enhance computer networking and data broadcasting.
AWS Patent Infringement
The dispute revolves around two patents that streamline data delivery over a network, allowing information to travel efficiently from peer to peer, even in the event of slow or broken connections.
This technology forms a robust network that allows data to “flow around” problem areas, ensuring smooth operation.
In the court’s findings, AWS was determined to have willfully infringed on these patents, meaning the jury concluded that Amazon knowingly used the protected technology without permission.
This finding could lead to an even higher penalty, as U.S. patent law allows damages to be tripled in cases of willful infringement.
Acceleration Bay
Acceleration Bay, which describes itself as an incubator and investor, has a history of taking on tech giants in patent disputes.
Recently, the company won another case against video game developer Activision, securing $23.4 million in damages.
The firm specializes in acquiring patents from major companies like Boeing and then pursuing legal action when they believe those patents are being used without proper licensing.
Despite this recent victory, Acceleration Bay is no stranger to high-profile patent litigation, and the AWS case could have lasting implications in the tech industry.
The court is expected to issue its final judgement soon, which may include the possibility of even higher damages given the willful nature of the infringement.
AWS’s Response and Financial Impact
AWS is the leading player in the cloud computing market, generating around $9 billion in operating profit each quarter—roughly 62% of Amazon’s total earnings. While $30.5 million might sound significant, it represents a small fraction of AWS’s revenue.
Even if the payout were to triple, as some legal experts predict, it is unlikely to have a long-term financial impact on the company.
This is not the first time AWS has found itself in legal trouble over patents. Earlier in 2024, Amazon paid $525 million in damages after losing another patent case involving cloud storage technology.
The company has also been embroiled in a long-standing legal battle with Nokia, which has seen both companies filing lawsuits against each other.
Most recently, in August 2024, AWS accused Nokia of infringing on over a dozen patents related to cloud computing.
What This Means for AWS and the Industry
Patent disputes are nothing new in the tech world, where companies frequently innovate on similar technologies.
However, AWS’s status as a cloud computing leader means that any legal setback could have ripple effects across the industry.
With cloud services becoming increasingly critical for businesses worldwide, protecting intellectual property is more important than ever.
