24/7 Real Media Dealt Setback in Patent Case

Days after declaring that it would step up the defense of its patents, 24/7 Real Media was dealt a setback, when a federal judge ruled against the company in its patent-infringement case against fellow ad serving company aQuantive .

The U.S. Federal Court for the Western District of Washington last Thursday granted aQuantive’s request for a partial summary judgment to dismiss a patent-infringement suit brought by 24/7 Real Media, which claimed aQuantive copied its patented ad-serving technology.

The court ruled that aQuantive’s system for determining which ad to serve does not violate 24/7 Real Media’s patent on using “priority queues” to target ads to certain users.

24/7 Real Media said on Tuesday that it would appeal the ruling, which it says does not address the core issue of whether aQuantive’s Atlas DMT unit’s technology infringes on the ad-serving process patented under 24/7 Real Media’s Patent No. 6,026,368. The case now heads to the U.S. Court of Appeals.

“We think the decision was wrong,” said Mark Moran, 24/7 Real Media’s general counsel, adding that the company disagreed with the judge’s definition of a priority queue.

“We’re confident we’re going to win” in the appeals court, he said. Moran said the appeals court should issue a ruling within a year.

Representatives for Seattle-based aQuantive were unavailable for comment.

The two companies’ patent dispute stretches back to 2001, when 24/7 Real Media sent aQuantive, then called Avenue A, a letter claiming that it was infringing on No. 368. In April 2002, the two companies sued each other, and Avenue A asked the court for a declaratory judgment that its technology did not infringe and that 24/7 Real Media’s patent was invalid. The court’s ruling only covered the issue of infringement.

Last week, 24/7 Real Media said it would step up its defense of the patent, which has already led to a number of lawsuits against fellow ad servers like DoubleClick and ValueClick, to go after paid search companies. The patent, filed for in 1995 and granted in 2000, broadly covers a system for delivering advertising to targeted viewers.

Moran said 24/7 Real Media would continue to press paid search companies to license the technology even if the appeals court upholds the ruling in the aQuantive case.

“Even under this interpretation, we still believe the search companies do infringe,” he said.

The case was one of a number 24/7 Real Media brought against competitors in the ad-serving space. 1n 1999 and 2000, it engaged in patent battles with DoubleClick, with each company filing patent-infringement cases against each other. The rivals settled the cases in November 2000. In June 2002, 24/7 Real Media settled another patent-infringement case, this one against Advertising.com. Finally, in January, it settled a yearlong patent case against ValueClick with an agreement for ValueClick to license 24/7 Real Media’s technology.

24/7 Real Media has other patent claims, too. It says a recently acquired patent, No. 5,446,919, applies to cable operators that target advertising by audience demographics to TVs with set-top boxes. 24/7 Real Media bought the patent in the past year.

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