chewy claim stock

The plight of the brick-and-mortar indie pet store as it battles the onslaught of competitive pressure from online retailers like Chewy is a key focus for us here at PPN. It turns out, however, that the grass is not always greener on the e-commerce side of the business.

We are keeping our eye on an interesting story developing about Chewy and its battle with IBM over patents.

Apparently, last month, the online pet retailer filed a complaint in the Southern District of New York against IBM asking the court for “a declaratory judgment of noninfringement for the patents-in-suit,” according to an article on Law Street Media.

We’re not experts in patent law—we don’t even dabble in such things. So to put it simply, IBM has accused Chewy of infringing on patents that IBM holds—a claim that Chewy is disputing—so Chewy is trying to forestall a potential lawsuit from being filed by the tech company before it happens, according to the several media reports.

According to Chewy’s lawsuit, IBM claims that the retailer is violating patents—including ones filed in the fledgling days of the internet—related to methods for “presenting advertising, formatting web content, associating advertisements with search results and magnifying objects,” reported an article on Westchester & Fairfield County Business Journals’ website.

The lawsuit also states that, “While IBM has obtained thousands of patents over the past 20 years, it is widely accepted that IBM does not itself make or sell any products or services covered by the vast majority of those patents. Instead, IBM has an army of lawyers who try to patent just about anything…then aggressively seeks to license those patents.”

It’s a strategy that, according to Chewy, has allowed IBM to successfully sue companies such as Airbnb, Expedia, Groupon, Priceline and Twitter.

For its part, IBM has tried meeting with Chewy to come to some sort of resolution, but Chewy wasn’t having it, according to reports. Chewy is so determined, in fact, that it is fine with the possibility that it may cost the retailer far more money to mount this legal challenge against the tech giant than to pay whatever fees IBM would charge for use of the patents in question, Law Street reported.

I suppose it’s a matter of principle—why settle when Chewy officials don't believe the company has violated IBM patent rights? Maybe it's also an opportunity to squash any possibility of being subject to IBM’s scrutiny in the future. Chewy seems prepared to take on the financial burden of pursuing the matter, and given recent reports of its recent growth in the market, it would appear that the company has the means to do it.

Whatever the outcome, the fight will probably drag out for a bit. In the meantime, it certainly won't prevent Chewy from being a thorn in the side of brick-and-mortar pet retailers, but it's something to note, and a little bit of a window into doing business on this scale in the e-commerce space.


For more on PPN’s coverage of the pet industry, read: