MindArrow Lands Rich Media E-mail Patent

Rich media e-mail firm MindArrow is the latest player in online marketing to receive a patent for its technology, as the awarding of legal protections continues to impact the hotly competitive Internet advertising space.

Huntington Beach, Calif.-based MindArrow’s patent, No. 6,449,635, “Electronic Mail Deployment System,” protects the methods and systems to deliver, manage and track rich media content in e-mail.

Specifically, it covers technology that embeds a script in an e-mail, which is run when the e-mail is opened. The script then calls for additional data from a server, which could entail pictures, streaming video, Macromedia Flash animation, and HTML. The script also can report back to the host server information about the recipients’ PC — useful for determining the appropriate content to send — or about cookies on their machine.

The patent also covers a system for tracking and reporting based on the recipient’s response and interaction with the e-mail.

MindArrow inherited the patent application, filed in 1999, when it acquired the assets of now-defunct rival Radical Communication, which had been widely regarded as the first major mover in the rich media e-mail space. Since the acquisition last year, MindArrow has served more than 100 clients using Radicalmail technology.

But similarly to Radical, MindArrow has been plagued with cash problems, receiving much-needed financing in June as a cash crunch seemed imminent. In spite of the company’s recent troubles, executives said they viewed the patent as validation of their company’s business model and the market opportunity for rich media e-mail.

The company said it has no immediate plans to use the patent against rivals in the space — a common practice among firms in the Internet sector, where client dollars continue to be in extremely short supply.

“Right now, we’re just real excited to have been awarded the patent,” said Jay Stevens, vice president of marketing at the firm. “By and large, it really illustrates the fact that we’re the first to market in it. In terms of discussions with other folks in the field that use similar, if not identical, technology … that hasn’t even come up yet.”

In recent months, a number of players in competitive areas of the industry received patents protecting portions of their businesses. In June, WebSideStory received a patent for its Web site tracking and analysis ASP, while Advertising.com settled with 24/7 Real Media over 24/7’s ad serving patent. Earlier this year, Unicast began using its rich media ad patent in competitive moves, acquiring troubled rival Enliven (which it had been threatening with legal action) and signing a distribution agreement with another challenger, Bluestreak.

Stevens said that MindArrow’s management, for the moment at least, is occupied with its impending merger with Internet holding company Category 5 Technologies. Announced in July, the merger is aimed at pairing MindArrow’s e-mail technology with Category 5’s e-commerce and small business tools.

“What we’re trying to do is really concentrate and focus more on the key next step, which is putting these businesses together,” he said, adding that the merger is expected to receive shareholder approval at the end of the month.

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