NetRatings, Jupiter to Resume Patent Lawsuit

Web researcher Jupiter Media Metrix will resume its
patent-infringement lawsuit against its acquirer and rival company
NetRatings, while federal regulators take a second look
at the pending marriage.

In a terse statement released Friday evening, the two companies said that
questions from antitrust regulators about the two Internet measurement
firms’ plans to merge had delayed the approval.

As a result of the Federal Trade Commission’s request for more information,
the companies expect the deal to close closer to the end of the first
quarter instead of earlier, as they had originally planned.

Although the two companies are going forward with their integration, Jupiter
Media Metrix decided it wanted to protect the assets that are at stake in
the lawsuit, said Jack Lazar, chief financial officer of NetRatings.

“It was (still) a contentious issue when we first decided to get together,”
he said. “Frankly, we think the whole lawsuit is frivolous.”

The lawsuit, filed in March of 2001, stems from Alley-based Jupiter’s
charges that NetRatings violated its patent for tracking online Web usage.
(At the same time, Jupiter filed a similar suit against European metrics
firm NetValue.) But in October, Milpitas, Calif.-based NetRatings agreed to
purchase Jupiter for $71.2 million in cash and stock, which left the lawsuit
in question.

Asked whether litigation from a company it is acquiring was a rocky way to
start a corporate marriage, Lazar said the companies were just being
realistic about the situation.

“It’s not the first time that two companies that were suing each other were
merging at the same time,” he said. “But we’re working together in order to
put the best company together for our customers.”

In early December, the FTC requested additional
information from the two companies, which Lazar said is typical in merger
deals valued at over $50 million. As a result, NetRatings said that the time
required to comply with the FTC’s request would require that the companies
return to their joint suits to look after their own interests — “so that
NetRatings and Jupiter Media Metrix can preserve their respective positions
in the patent litigation.”

“We’ve always believed that the case won’t have to go to court,” he said.
“We’re still confident about that.”

Jupiter and NetRatings said they would work to respond to the FTC’s request
for more information by the original deadline of March 31, 2002. Thirty
days after fulfilling the request, and pending FTC approval, the companies
would be free to merge, at which point any suits between them would be
dropped.

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