Online clothing retailer L.L. Bean filed suit this week against four alleged Claria advertisers, accusing them of placing "parasitic" pop-up ads over its Web site.
The suits, which name Nordstrom, JC Penney, Atkins Nutritionals and Gevalia Kaffee, a division of Kraft Foods, were filed separately Monday in Maine District Court.
In the complaints, L.L. Bean accuses the defendants of infringing on its trademark by confusing consumers, engaging in unfair competition, using false advertising, diluting its trademark, and enriching themselves unjustly. The company also claims its Web site was trespassed upon and effectively altered, because of the pop-up ads. L.L. Bean cites federal, state and common law.
Nordstrom could not be reached for comment by press time. JC Penney, Atkins and Kraft declined comment.
"Reputable marketers like L.L. Bean are doubly victimized by this parasitic form of marketing. It's bad enough that there are companies out there wantonly poaching consumer activity on our site and redirecting it to themselves," said Mary Lou Kelley, L.L. Bean's vice president of e-commerce. "But even worse is the fact that our reputation is injured by a consumer perception that suggests L.L. Bean is authorizing these activities or even receiving compensation for it."
The lawsuits against advertisers come amidst a lengthy legal battle between L.L. Bean and Claria itself. Claria, formerly known as Gator, has repeatedly come under fire for its method of targeting and delivering advertising -- which often results in advertisers' pop-up ads appearing over competitors' sites. When Claria, which is planning an initial public offering of stock, filed papers with the Securities and Exchange Commission (SEC), it cited pending suits with Hertz Corporation, L.L. Bean, Six Continent Hotels Inc. and Inter-Continental Hotels Corporation, TigerDirect, True Communication, Wells Fargo & Company, WFC Holdings Corporation and Quicken Loans.
Claria's model is also under scrutiny by state and federal legislators. Utah recently passed an anti-spyware law, which the adware company says would effectively outlaw its model in the state. (Claria competitor WhenU is challenging that law's constitutionality.) California lawmakers are also considering anti-spyware bills, as are federal legislators.
However controversial, the model also appears to be profitable for Claria and effective for marketers. Claria had net income of about $35 million on revenue of $90 million in 2003, according to its filings with the SEC. Those dollars came in from about 425 advertisers, including Cendant Corp., FTD.com, Netflix and Orbitz.
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March 19, 2014