Internet-based credit company NextCard Inc. is suing credit company Providian Financial Corp., alleging copyright infringement in a case that some say could set a precedent for how the law applies to Internet advertising.
The suit, filed in U.S. District Court in San Francisco, accuses Providian of copying a banner ad that features a descending thermometer to represent falling interest rates. Both companies are based in San Francisco. NextCard said the ad is its most effective ever, with about 680,000 Web users clicking on it.
“The protection of the intellectual property and the substantial investment companies make in banner ads is of critical importance to Internet-only companies like NextCard,” said Anthony de Alcuaz, counsel for NextCard in the dispute. “Unfortunately, Providian did not respond appropriately to our efforts to resolve this dispute amicably.”
NextCard said Providian’s ad infringed on its copyrights and trademarks, and represents unfair competition. NextCard asked the court to force Providian to stop running its ad and pay unspecified damages.
“Providian’s strategy at this point is apparently to deceive Internet users into thinking they were clicking on to NextCard’s site,” NextCard CEO Jeremy Lent told the Associated Press.
“There are no proprietary rights in banner ads,” Providian spokesman Marc Loewenthal was quoted as saying. “They are attention-getting devices that do not reflect any original work of authorship.”
Federal and state laws define unfair competition and protect business trademarks, copyrights and proprietary symbols. But legal experts say there is little guidance on how the law applies to Internet ads.
“This is a subject that’s going to be one of the hottest in the next few years,” Joseph Cotchett, an attorney in Burlingame, Calif. told the AP. “It’s going to spawn more litigation than you can imagine.”
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