Ultramercial Aims for Large Publisher Licensees with New Patent

With firms like Amazon scoring so-called business method patents, Ultramercial founder Dana Jones figured years ago he ought to apply for one, too. Jones has been awarded a U.S. patent he applied for in 2000 for his firm’s signature commercial break-style ad unit, which launched later in 2002. The company aims to license the patented “method and system” to large site publishers.

“Now we can license what we’re doing,” said Jones. “The whole point of the patent is the U.S. government…says you have a monopoly for the length of the patent,” he added. Still, that doesn’t mean Ultramercial is out to sue possible patent infringers.

“Are there companies out there that appear to be doing our model? Yeah,” Jones told ClickZ News. “But that’s not the point.” Jones said his firm has never sued anyone and has no intention to do so. “We are not patent trolls,” he stressed. “What we want to do is license what we’re doing and teach people the benefits of doing this.”

Some may argue the Ultramercial is too similar to a standard interstitial unit to warrant a patent. The main difference, as Jones described it, is more touchy-feely than techie. “We do change the way the viewer perceives and emotionally holds the advertiser,” said Jones. While the typical full-page interstitial is served automatically to the user before a destination page loads, the Ultramercial is preceded by a page requiring the user to opt-in to view the ad.

“The decision page presents the value proposition,” he said. According to Jones, that is key to the format’s uniqueness, and part of the reason why it deserved to be patented. Also, the Ultramercial unit enables step-by-step interactions requiring the user to respond before proceeding to the next portion of the ad.

Jones would not say precisely how the company will structure future licensing deals, or how much fees will be. However, he told ClickZ News the firm most likely will look to other licensing deals as a basis for its own. “It will probably be a combination of [Ultramercial collecting] a piece of the revenue that this product generates,” with other forms of compensation, he said.

Jones also indicated Ultramercial may no longer actually serve ads using its formats in some cases, particularly when licensing the product to large publishers such as TV networks and large newspaper publishers. Indeed, those are the types of companies Jones hopes to score as licensees.

“We’ll actively pursue newspapers,” he said.

Ultramercial continues to work with Salon.com, in addition to publishers of Economist.com, TheStreet.com, and ABC News. Advertisers such as apparel retailer H&M, hair care brand SunSilk, clothing brands Champion and Levis, as well as record labels and film studios have run the firm’s ads online and in SMS form on Virgin Mobile phones through a relationship with the carrier. The SugarMama program allows Virgin Mobile subscribers, who tend to skew younger, to swap ad-watching for free phone minutes.

The ad company also works with WiFi access providers, allowing airport travelers and cafe goers to view ads in exchange for free Web access. Ford, Microsoft, and online shoe seller Zappos have advertised through Ultramercial’s WiFi access offerings.

The company has its sights set on distributing its ads in non-Internet environments such as cable TV, VOD, and in-store kiosks. A patent was filed recently by Ultramercial for that very purpose. But, calling the U.S. Patent system “like molasses,” Jones doesn’t expect it to be awarded anytime soon.

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