Amazon Settles With Discovery Over E-Reader Patent

Amazon (NSDQ: AMZN) made sure Discovery won’t ruin its hopes for the best Christmas ever by settling a lawsuit that accused the Kindle and Kindle 2 of infringing security and copy protection technology.

On Monday in Delaware federal court, the parties filed to dismiss a lawsuit which began in 2009 after Discovery claimed that Amazon’s e-readers were using its technology. The terms of such settlements are confidential but it is possible that Amazon decided to pay Discovery in order to eliminate the possibility of an injunction against its Kindle products at a time when the online retailer is marketing them heavily.

Discovery filed for the patent in 1999. It was granted in 2007 and is described as follows:

The invention, electronic book security and copyright protection system, provides for secure distribution of electronic text and graphics to subscribers and secure storage.

Maryland-based Discovery Communications (NSDQ: DISCA) is primarily known for producing TV programming like Animal Planet and the Military Channel. It is not a player in the fast growing e-reader market but, as CNET explained at the time of the lawsuit, Discovery founder John Hendricks is an amateur inventor who tried his hand at new ways of digitizing TV and book content.

Amazon is not out of the patent woods yet, however. Shortly after announcing its much-hyped Kindle Fire, Amazon was sued by a so-called patent troll that claimed the tablet device infringed technology for tapping an icon on a screen. Trolls, known more politely as non-practicing entities, are shell companies that don’t make anything but purchase used patents in order to sue companies in the hopes of extracting a settlement.