Amazon Wins Trial Over Technology to Order Groceries With Alexa

Susan Decker, Bloomberg News

An independent contractor wearing a protective mask and gloves loads Amazon Prime grocery bags into a car outside a Whole Foods Market in Berkeley, California, U.S., on Wednesday, Oct. 7, 2020. With millions of Americans still sheltering in place and cooking their own meals, the grocery industry has been one of the few bright spots in an otherwise battered U.S. economy. Unless, that is, you are Whole Foods Market, the upscale chain acquired three years ago by Amazon.com Inc. Photographer: David Paul Morris/Bloomberg , Bloomberg

(Bloomberg) -- Amazon.com Inc. won a Texas trial in which it was accused of incorporating an Israeli company’s patented “smart kitchen” inventions for voice commands to shop for groceries online into the Alexa digital assistant.

Amazon didn’t infringe three patents owned by closely held Ikan Holdings LLC’s Freshub unit, the federal jury in Waco, Texas, said Tuesday.

Freshub said its inventions allow consumers to create shopping lists, establish a shopping cart and order from their local grocer by using voice commands or scanning bar codes of products with an internet-connected device. Amazon knew of Freshub and its patents when it incorporated the technology into its Alexa assistant and Echo smart speakers, and promoted it for use with its Whole Foods grocery chain, Freshub claimed.

Amazon accused the company of manipulating patent applications to ensure they covered Alexa and Echo after the popular products had already entered the market. Amazon also warned jurors that a victory for Freshub would mean more lawsuits by the company against other tech firms like Apple Inc. and Google Inc.

Freshub argued consumers using the technology spent more money, so it was entitled to $3.50 per unit sold with the functionality, for a total of $246 million. Amazon argued that the patents were worth at most $1 million.

The Whole Foods grocery chain, which Amazon bought in 2017, had held a series of talks with Freshub as early as 2014, while Amazon itself had talks with the company as far back as 2015, including a 2019 demonstration with Amazon’s general manager for Alexa Shopping, Freshub’s lawyers with Kramer Levin said.

Amazon denied infringing any patents, and contended they are invalid. Freshub was never able to persuade anyone else to license its patents or commercialize its ideas, and companies like Intel Corp. rebuffed offers to buy them, Amazon lawyers with Fenwick & West said.

Amazon also accused Freshub of defrauding the U.S. Patent and Trademark Office to obtain the patents. All three patents were issued in 2019, but originated with an application filed more than a decade earlier.

Amazon argued that the earlier application was for a refrigerator with a camera that would recognize product images. Freshub abandoned the application, first filed in 2005, and then revived it in 2017 -- after Alexa and Echo were on the market -- to take advantage of the emerging use of the Internet of Things, Amazon said.

Earlier this year, Amazon tried and failed to get the patent office’s review board to a second look at the three patents. Under a relatively new policy, the agency won’t review patents if a district court case is far enough along.

The case is Freshub Inc. v. Amazon.com Inc., 21-511, U.S. District Court for the Western District of Texas (Waco).