Internet Machines Puts PCI-E Patent Squeeze on PC Makers and Retailers

Paul Lilly

A company called "Internet Machines" is suing several high profile technology bigwigs over alleged patent infringement violations related to PCI Express switch technology. Just some of the many names include Dell, Nvidia, AMD, Asus, and Samsung, but Internet Machines is also targeting retailers like Best Buy and TigerDirect, as well as system builders, one of which told us this feels like an extortion scheme.

The system builder, who wishes to remain anonymous, told us it settled a patent infringement case with Internet Machines a year ago because it was cheaper to go that route than to pay for an ongoing trial. Now Internet Machines is suing for a different PCI Express patent, one that is potentially much more costly, and taking aim at those who previously settled because it looks like an admission of guilt, according to our source.

"We're just a system integrator who is being dragged to courts to pay for the patents we have nothing to do with. As you know, PCI Express is a technology that's being used by everyone. We don't manufacture motherboards, we build computers, that's it," the system builder told us.

Digging up information on Internet Machines is no easy task, though there are plenty of legal documents littered all over the Web. According to a report in the Austin Business Journal , Internet Machines, founded in 2000, stopped doing business as a fabless semiconductor around seven years ago. Now the company is trying to squeeze anyone and everyone for a pair of PCI Express switch patents -- US 7,454,552 and US 7,421,532 -- in what some would call an exercise in patent trolling, albeit somewhat successful up to this point.

How this ultimately plays out is anyone's guess. Internet Machines wants a jury trial to decide the case, though how it plans to convince a jury that retailers and system builders should have to pay for PCI Express design patents is beyond us, and quite frankly a little bit frightening.

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