Jupiter Media Settles With PC Data

Jupiter Media Metrix Inc., the biggest measurer of online activity, has reached a settlement in a patent-infringement case, essentially forcing one of its leading competitors, PC Data Inc., to get out of the business of tracking Internet usage, Wednesday’s Wall Street Journal reported.

And Jupiter Media Metrix (JMXI) isn’t stopping there. The New York company Tuesday filed a lawsuit against two other competitors, NetValue SA and NetRatings Inc. (NTRT), alleging the companies are also infringing its tracking technology.

The legal wrangling is another twist in an important niche of the Internet market, one often marked by rancorous battles between competitors over the quality of their Internet measurements.

The patent appears to give Jupiter Media Metrix another card to play against competitors at a time when Internet companies in general, including many of the measurement firms’ customers, are suffering badly. The lawsuits are also sure to heat up the debate over broad “business method” patents that cover new ways of doing business rather than designs for, say, a computer chip.

The PC Data settlement stemps from a lawsuit filed by Jupiter Media Metrix in the U.S. District Court in Wilmington, Del., last September. In that suit, Jupiter Media Metrix alleged that PC Data’s system for tracking and analyzing users’ online habits violated a broad patent it obtained for such a system.

Under the terms of a settlement expected to be announced by the two parties, PC Data plans to announce it will transfer all rights relating to its Internet tracking software to Jupiter Media Metrix.

Meanwhile, representatives of NetRatings and NetValue said they hadn’t seen the lawsuit filed against them in the same Wilmington court Tuesday, and therefore couldn’t comment on Jupiter Media Metrix’s claims.

But both companies said they intended to defend themselves against the suit. Jim Hatch, president of NetValue USA, the U.S. unit of Paris-based NetValue SA, said Jupiter Media Metrix hadn’t attempted to contact his company with patent concerns before it filed the suit.

Like its competitors, Jupiter Media Metrix runs a “panel” consisting of tens of thousands of Internet users who have installed a special software program on their PCs to track their every move online. The company, the largest in the online measurement area in terms of revenue, uses the data to project the behavior of Internet users at large, selling the resulting research — including lists of the most visited Web sites — to investment banks, high-tech companies and a host of other customers.

The Jupiter Media Metrix patent, issued last September, describes a system that “measures and reports the use of a personal computer by a user through a log file,” and says the log files, or computerized records, “can report on the applications used and communication functions engaged in by the user.”

The patent is specific to tracking activities on personal computers, so it won’t apply to other measurement services, such as those that track television audiences, for instance, said Daniel R. Harris, the attorney at Brobeck, Phleger & Harrison who is representing Jupiter Media Metrix in its patent claims.

PC Data confirmed through a news release that it was getting out of the measurement business as a result of the settlement.

It said that it would sell its remaining assets, including its customer list, for terms it didn’t disclose to NetValue, one of the co-defendants in the new Jupiter Media Metrix lawsuit.

Earlier this month, PC Data sold one of its other major assets, a division that tracked sales of computer hardware and software at points of sale, to a venture backed by NPD Group Inc., a market-research firm in Port Washington, N.Y. NPD founded the Media Metrix division of Jupiter Media Metrix and remains a large shareholder in the company.

Copyright (c) 2001 Dow Jones & Company, Inc.