IAB's Criticism of Gator.com Brings Law Suit

Complaints made by the Interactive Advertising Bureau — about Gator.com’s online advertising service being deceptive to consumers and unfair to advertisers–has elicited a lawsuit from the Redwood City, Calif. company.

Gator bundles software called OfferCompanion with its namesake Gator application, which is designed to remember passwords and online form information. OfferCompanion, a kind of marketing software, launches pop-up ads based on the sites users visit–including competitors’ sites.

But IAB president and CEO Robin Webster argues in a statement released yesterday that Gator infringes “on the trademark, copyright and intellectual property rights of Web publishers and advertisers.”

Gator responded by filing a lawsuit in federal court Monday. The company was able to make a pre-emptive legal strike one day before the IAB took its criticism public due to a conversation last week between Webster and Gator CEO Jeff McFadden.

“We’ve received criticism in the past, but it was the nature of the criticism that led us to file the lawsuit,” says McFadden. “What they are saying is that what we are doing is illegal. We were taken aback. We want the courts to declare what we are doing is legal.”

Webster says the IAB has not been served with the suit yet. She says she contacted McFadden Friday, asserting that if Gator stopped its advertising practices that infringed on contract, trademark and copyright interests, the IAB would not make any comments. She believes that the lawsuit is merely a “publicity stunt.”

In addition to the pop-up ads, the IAB is bothered by Gator’s ability to cover banner ads with other banner ads that “are covering up the ads that are sold and served by the IAB web site,” says Webster.

The IAB’s statement also asserts the “consumer has not replaced the advertising by him or herself. Gator.com has done it, and is thus presenting a false and misleading business relationship between the sites and the substituted advertisers.

“Gator.com’s practice of visually altering publishers’ content and obscuring the advertisements of unsuspecting advertisers, without notice, substantially interferes with the contractual relationships between web publishers and advertisers. In effect, Gator.com is falsely implying relationships that do not exist.”

But Gator argues that its technology is effective, and that the IAB’s comments are an example of the organization’s desperation in the face of a slumping online advertising environment.

Still, all of this could end up in the courts. With Gator’s lawsuit, Webster says she will have to consult the IAB’s attorneys. And the IAB’s statement says the organization “intends to immediately pursue options on behalf of its members with the appropriate federal agencies.”

–Andrew Gordon, Adweek Magazine’s Technology Marketing