Amazon must pay $525 million to small Chicago software company Kove for violating cloud storage patents in David and Goliath lawsuit

Amazon has been ordered to pay $525 million in damages to a small Chicago tech company in a David-vs-Goliath cloud storage lawsuit.

Kove, which has about 20 employees to Amazon Web Service’s 136,000, alleged in lawsuits in 2018 that the tech giant had used three of its patents as “building blocks” for its hugely profitable cloud storage service.

Yesterday, a jury agreed and awarded the smaller company more than half a billion dollars in damages.

Amazon has since vowed to appeal the ruling.

Kove, the Chicago-based company, operates from an office in this Chicago warehouse

The jury found that AWS infringed on three of Kove’s patents covering technology that Kove said has become “essential” to Amazon’s cloud computing division’s ability to “store and retrieve massive amounts of data.”

Amazon representatives did not immediately respond to a request for comment on the ruling.

Kove CEO John Overton

Kove’s lead attorney Courtland Reichman called the verdict “a testament to the power of innovation and the importance of protecting IP rights for start-up companies against technology giants.”

Chicago-based Kove sued Amazon in 2018 in the U.S. District Court for the Northern District of Illinois.

The company said in the lawsuit that it pioneered technology that enabled high-performance cloud storage “years before the advent of the cloud.”

Kove claimed that Amazon S3 storage service, DynamoDB database service, and other AWS products infringed on cloud storage patents.

The jury agreed with Kove on Wednesday that AWS infringed all three Kove patents at issue, although it rejected Kove’s claim that AWS willfully violated her rights.

AWS had denied the allegations and argued that the patents were invalid.

Amazon Web Services is one of the company’s strongest revenue generators, reaching $88 billion in revenues by 2023