And Now, Netcentives Announces Its Patent

This reward-marketing patent business may well end up in
the laps of the
lawyers as first CyberGold and now Netcentives announced patents for
various related technologies.

San Francisco-based Netcentives Inc., an Internet incentive, loyalty, and
promotional marketing company, said it has been awarded a U.S. patent that
covers online shopping rewards programs. The announcement follows a
similiar statement from CyberGold three days ago.

Based on the strength of its patent, Netcentives also said it plans to more
than double its investment in research and development, “expanding its
technological lead in electronic commerce incentive and reward programs.”

CyberGold said its patent gives the company the sole right to pay consumers
online incentives–including cash, points, frequent flyer miles or other forms
of compensation–whenever consumers demonstrate that they paid attention to an
ad or marketing
message or participated in an online loyalty program. CyberGold said earlier
this week it plans to license its rewards-based “attention brokerage” apps.

Numerous other companies with the same twist on Internet marketing have yet to
be heard from.

Netcentives said the patent gives the company ownership of intellectual
property vital to Internet commerce-based “On-Line Interactive Frequency and
Award Redemption Programs.”

The patent gives Netcentives sole rights to a set of systems, procedures, and
methods for providing online rewards programs in which consumers shop online,
earn points or other units of value for their purchases, then redeem those
points online for items from an award catalog.

Netcentives provides an online shopping rewards program ClickRewards, launched in March, via
Internet retailers, including 800-Flowers,, Macy’s,
Microsoft Plaza, N2K’s Music Boulevard, Red Herring, SkyMall, and Yahoo!. The
company also has exclusive partnerships that enable it to award frequent flyer
miles with seven major airlines.

Netcentives just completed a new round of investment, adding an additional
$17.25 million in funding from Integral Capital Partners (a member of the
Kleiner Perkins Caufield & Byers family of funds), RRE Partners, Mayfield
Fund, New Enterprise Associates, and Information Technology Ventures.

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