Internet promotions companies are fighting a turf war through the U.S. Patent Office and the courts.
BrightStreet.com, Mountain View, CA, is awaiting a Patent Office ruling on an April 3 claim of patent interference filed against CoolSavings.com, Chicago. A decision is expected by July.
Several patent infringement suits have made online couponing tricky territory for marketers, who may shy away from new services for promos on their own sites. It could be 12 to 18 months before the dust settles, and marketers may wind up with fewer suppliers from which to choose.
BrightStreet asked for revocation of a patent granted to CoolSavings in June ’98, contending that it had filed earlier than CoolSavings’ July ’95 application. BrightStreet applied for a patent on “couponing and other forms of online promotion technology,” says ceo Scott Wills, who won’t say when BrightStreet filed due to a lawsuit between his company and CoolSavings.
In August, CoolSavings filed suit in Chicago against BrightStreet, claiming infringement on its patent for “interactive marketing network and process using electronic certificates.” BrightStreet counter-sued in November. (The case has been continued until September.) CoolSavings settled similar suits against iVillage in July ’99 and E-mail Direct in January. Meanwhile, Catalina Marketing and E-Centives each have active patent-infringement suits against CoolSavings. CoolSavings would not comment because it’s in a “quiet stage.”
Last month, BrightStreet won a suit filed by Response Reward Systems. The settlement gave BrightStreet rights to three key patents, protection from 11 existing and any future Response Reward patents, and immunization for the company and its clients.
Five-month-old BrightStreet bills its services as a “digital promotions backbone” that enables marketers to create, execute, and track online loyalty, sampling, and couponing programs on their own Web sites. The company first launched in the early ’90s as Coupons Online. Cox Target Media bought a piece of BrightStreet.com in February to assist a management-led buyout.
CoolSavings.com hit the five million-member mark in January, signing one million members in fourth-quarter ’99 after an aggressive ad campaign.
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