Jupiter Media Metrix Makes Legal Moves
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In a development that could have serious ramifications for the online rankings and metrics space, Jupiter Media Metrix Monday filed patent infringement suits against two major competitors, while a third player, PC Data, settled a similar lawsuit with Jupiter and will be exiting the business.
New York-based Jupiter originally received its patent for computer use in early September, and later that month filed suit in federal court against Reston, Va.-based PC Data. That suit was joined Monday by two additional charges of infringement, against NetRatings and NetValue USA, the domestic unit of Paris-based NetValue.
Jupiter's patent, No. 6,115,680, concerns technology that tracks the usage of panelists' computers. Similarly to AC Nielsen's television ratings, the companies use the technology to understand how the public uses their computers, and what they do online.
Specifically, the patent protects a system that "measures and reports the use of a personal computer by a user through a log file ... The log files from one or more computers may be assembled and analyzed in order to ascertain computer use habits for computer software, computer hardware and computer communications."
Jupiter said it seeks a permanent injunction against Milpitas-based NetRatings and NetValue to halt the companies from using PC and Internet-use tracking technology, as well as unspecified monetary damages.
"Jupiter Media Metrix is committed to protecting our innovative technologies and methodologies and aggressively defending our investments," said Jupiter chairman and chief executive officer Tod Johnson. "We have a history of innovation and we will continue to advance our measurement tools to meet the needs of this dynamic marketplace."
As part of its settlement with Jupiter, PC Data not only conceded that it infringed on Jupiter's patent, but it also agreed to an injunction. Accordingly, PC Data will give up tracking panelists' Internet and PC usage, and said it has transferred the rights to its @PC Data tracking software to Jupiter.
Financial terms of the agreement were not disclosed.
"We are proud of our innovative and advanced metering technology," said Mary Ann Packo, group president of Jupiter Media Metrix' measurement business said in a statement. "And, we are pleased that our patent allows us to protect the intellectual property that enables us to deliver the industry's most reliable and comprehensive audience measurement data."
NetValue USA president Jim Hatch fired back at the lawsuit against his company, however, calling it both "completely without merit" and a "competitive maneuver that is badly conceived."
"Not only is our technology process fundamentally different than [Jupiter's], but we also doubt the validity of their patent," Hatch said. "This legal action is a testament to our impact in the Internet space in this country ... Our aggressive growth here plus our acquisition activities have obviously triggered a very spurious attempt to hurt us in the market. It won't."
While spokespeople from Jupiter agreed that there is a "strategic advantage" in patent protection, the company denied Hatch's allegations that the patent suit was launched to gain competitive leverage.
"As a first mover in our field, the company and technology were developed in the early 90's," said a spokesperson. "We were the first mover in digital media measurement ... and we are aggressively protecting our innovations."
Spokespeople from NetRatings declined to comment beyond saying the company would "defend itself vigorously" against the suit, which it feels is without merit.
PC Data calls were referred to Jupiter and NPD Intellect, which did not return calls by press time.
The settlement with PC Data abruptly removes the company and its PC Data Online division from the field of online and computer tracking, a field feeling revenue backlash from failing dot-com clients and questions about methodology -- since the numbers of unique visitors provided by the industry leaders often differ from the numbers Web publishers report.
On Tuesday, PC Data announced that it was shuttering the operations of its PC Data Online unit, though it gave few reasons as to why. The company's founder and chairman, Ann Stephens, said in a statement that the company could best serve customers by transitioning the business to "a new provider."
At the time, NetValue and another player in the space, comScore Networks, both said they had agreed to purchase the client rosters, the panelists, and various other unspecified assets of the unit. Earlier this month, NPD Intellect purchased PC Data's point-of-sale tracking business -- its other major unit -- raising questions about the company's future plans.