Amazon ordered to pay $525 million to small Chicago-based software company Kove for infringing cloud storage patents in the David and Goliath court fight.

Amazon has been ordered to pay a small Chicago-based technology company $525 million in damages for patent infringement in a David and Goliath court fight over cloud storage.

Kove, which has about 20 employees compared to Amazon Web Service’s 136,000, claimed in 2018 court filings 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 $500 million in damages.

Amazon has since vowed to appeal the ruling.

Kove, the Chicago-based company, operates out of an office in this Chicago warehouse.

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

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

John Overton, CEO of Kove

Kove’s lead attorney, Courtland Reichman, called the verdict “a testament to the power of innovation and the importance of protecting the intellectual property rights of startups from tech giants.”

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

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

Kove alleged that AWS’s Amazon S3 storage service, DynamoDB database service and other products infringed cloud storage patents.

The jury agreed with Kove on Wednesday that AWS infringed the three Kove patents at issue, although it rejected Kove’s argument that AWS intentionally violated its rights.

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

Amazon Web Services is one of the company’s most important sources of revenue, generating $88 billion in 2023.