Patent Wars Strike Online Audience Measurement Field

Many tech companies have been thwarted by the vagueness of U.S. patent laws, which are issued not only for specific technologies, but also for general ways of doing business. If competitors can’t innovate, some companies will simply litigate.

Now, technology providers’ misery has company in the competitive field of Internet audience measurement. Jupiter Media Metrix was awarded a patent in September 2000 describing a process for tracking Web users via software agents installed locally on PCs. Shortly afterward, Jupiter Media Metrix sued competitor PC Data for patent infringement.

On Wednesday, execs from Reston, Va.-based PC Data threw up their hands. The company settled out of court with New York-based JMM, deciding to exit the online audience measurement business all together. Some of PC Data’s assets have been sold to comScore Networks and NetValue.

But Jupiter’s lawyers have now turned their guns on two other competitors: NetValue and Nielsen NetRatings, both of which it filed suit against on Tuesday. (Nielsen NetRatings is a joint venture partly owned by VNU, Adweek magazines’ parent company.)

“The settlement is a demonstration that the patent looked solid,” said Mary Ann Packo, group president of Jupiter Media Metrixs measurement business. But the remaining rivals vehemently disagree and said they will fight.

“Lawsuits are not uncommon, and are often filed by companies that would rather litigate than compete,” said Dave Toth, president and CEO of NetRatings. “We will defend ourselves vigorously against the assertions made in this lawsuit.”

Jupiter Media Metrix seeks a permanent injunction precluding NetRatings and NetValue from utilizing computer-use tracking methods it believes infringe the patent. JMM is also seeking monetary damages.

However NetRatings, and other companies that track Web surfers’ online behavior, claim their technologies are different from anything JMM’s patent actually describes. James Powers, chief counsel for comScore, said that if the courts were to interpret Jupiter’s patent too broadly, it would chill industry innovation.

Financially, NetValue and NetRatings are in a better position to defend themselves against the suit than PC Data. PC Data executives said the suit was just one factor in the company’s decision to close up shop. A shrinking client base and difficulties in raising funds also contributed to the closure.