Amazon.com set to pay on patents

Amazon.com, the world's largest Internet retailer, agreed to pay $40 million to Soverain Software to settle two lawsuits over patents related to online shopping.

Amazon.com will make the payment this quarter and will license the patents, the company said yesterday in a filing with the Securities and Exchange Commission. Amazon.com reported net income of $54.2 million in last year's third quarter.

"We entered the settlement for the purposes of ending the litigation and avoiding the expenses of continuing the litigation," said Patricia Smith, a spokeswoman for Amazon.com. "We continue to deny any wrongdoing."

Amazon.com settled yesterday, before jury selection was to begin next week in federal court in Tyler, Texas, said Kenneth Adamo, a lawyer for closely held Soverain. Soverain, based in Chicago, sued Amazon.com last year, accusing it of infringing five patents tied to online payment and identification of users.

"They're all patents basic to most current e-commerce," said Adamo, 54, a partner in the Dallas office of Jones Day. Terms of the accord were sealed, he said.

Gap settled over the same patents this year, Adamo said. A call to the offices of San Francisco-based Gap wasn't immediately returned.

Amazon.com shares have risen 1.2 percent this year, valuing the company at $18.5 billion.