Broad Patent Clouds Landscape Over Incentive Marketing

New questions were raised in the competitive market for online incentives this afternoon when the U.S. Patent Office granted protection over the distribution of incentives connected with Internet advertising to CyberGold. The patent gives CyberGold the sole right to pay online incentives to consumers including cash, points, frequent flyer miles or other forms of compensation.

CyberGold spokeswoman Colette Sandstedt said that while the patent has been eagerly awaited, “we are still in a stage where we are studying what the patent means.” The company filed for patent protection in December, 1995. Sandstedt said the company would consider licensing the technology to competitors and is currently studying “whether anyone is in infringment and what the licensing process should be like.”

A spokesperson for rival incentive marketer NetCentives said the company was still studying the ruling and was not prepared to comment. NetCentives has agreements with Delta Airlines, American Airlines, and United Airlines awarding frequent flyer miles to Web surfers who shop at partner’s sites. NetCentives current partners include Garden Escape, 1-800-Flowers, eTrade and Music Boulevard.

CyberGold awards consumers cash payments by credit card or in CyberCash for visiting sites within the companies’ network of affiliated Web sites. Disney Blast, Match.com, and Alexa are current clients of CyberGold. Users who register with CyberGold can accumulate rewards by visiting the sites that are currently in the network. For example, a registered CyberGold user earns fifty cents for visiting Alexa’s site and downloading Alex software.

More than 780,000 people have registered with CyberGold, according to the company, which is privately held.

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