Amazon Ends Lawsuit Over Kindle Fire

In a surprise development, Amazon (NSDQ: AMZN) has quietly resolved a lawsuit that alleges its Kindle Fire violates four patents related to touchscreen technology.
In court papers filed in Texas this week, Amazon and Smartphone Technologies said they have resolved all differences and asked the court to dismiss the lawsuit which was filed in October, shortly after the Kindle Fire’s release.
Smartphone Technologies is a subsidiary of Acacia Research Corp, a publicly traded company that is one of a growing number of firms that amass patents and then sue technology companies that refuse to buy licenses. Acacia is also suing other industry giants like Apple (NSDQ: AAPL), RIM (NSDQ: RIMM) and AT&T.
As is customary, the court filings do not explain why the parties are ending the lawsuit or describe any payments or settlement terms. The decision to end the lawsuit comes shortly before Acacia was due to file a motion opposing Amazon’s request to move the case out of East Texas, a district that is notorious for juries that grant large awards to patent owners.
Amazon’s decision to settle so quickly is a surprise given that it could afford a long legal fight and that the patents in question appear to be of questionable value. One is for a method of tapping an icon and another, obtained from defunct Palm Inc. (NYSE: HPQ) is for a “System And Method For Displaying And Manipulating Multiple Calendars On A Personal Digital Assistant.”
Amazon’s move could be a strategic gambit in which it will turn around and use the patents to harass would-be competitors in the tablet market. Or it may simply have paid Acacia to go away in order to ensure that the lawsuit didn’t impede booming demand for the Kindle Fire.
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