Patent Fight: comScore May Win The Battle, Yet Lose The War

Analytics is among the most contested areas in digital advertising, with ad agencies, marketers, established vendors, and startups all falling over each other to provide the truest form of ad effectiveness. The landscape is dotted with providers big and small that lay claim to proprietary measurement methodologies.

Many of the services are difficult for clients to assess, and even the competing metrics providers have trouble differentiating themselves. Sometimes, the clearest arbiter of “best in class” is someone who holds the patents. And that brings us to the news of lawsuits filed in June and July by comScore, who claimed that three smaller competitors — DoubleVerify, AdSafe Media and Moat— infringed on patents.

“It is unclear why comScore would take this course of action to compete in the ad viewability market, especially as the patents they are asserting relate to 1990’s vintage technology that is rapidly becoming outdated,” AdSafe CEO Scott Knoll told AdExchanger, when asked for reaction to the suit.  “We feel strongly that our proprietary technology is not covered by these old patents.”

Knoll argues comScore’s lawsuits may represent an attempt to monetize the old patents that they acquired  through past legal settlements before they become completely obsolete. “In any case, we do not believe this technology is relevant to what we are doing and thus we do not believe we will need to pay any royalties,” he added.

Knoll also noted AdSafe has had pending patents of its own around viewabilty, as well as other areas related to reporting, targeting and real time bidding. “We protect all of our intellectual property and expect that our own pending patents will be much more relevant to the industry in the coming period,” Knoll said. “Having said this, we have a defensive patent strategy allowing our innovation to speak for itself in the marketplace rather than in the courts.”

Nevertheless, it’s safe to say that there will indeed be much more legal activity around analytics as the space matures and startups continue to look for ways to provide their own niche.

In conversations with several online ad industry executives, there was support for the general notion of defending one’s intellectual property. But there was a lot of doubt that it would play out well for comScore and some degree of dubiousness about whether comScore was attempting to simply protect its intelligence as opposed to intimidating upstarts.

“I can only imagine that comScore is fighting because they feel threatened in some way,” said the head of one analytics provider not involved in the suit. “They may win the battle but lose the war. If comScore was serious then they really would have to also sue every ad server on the planet. Whether the defendants settle or fight, this will be very expensive and de-focusing for those small companies.”

Media buying veteran Tim Hanlon, CEO at emerging media consultancy The Vertere Group, sees parallels with last year’s Nielsen lawsuit against comScore, which ended in a settlement between the two  (original suit here; settlement press release here). The patents that were fought over in that suit now appear to be the subject of comScore’s current one, though Nielsen has not registered any complaint on its end, at least not yet.

“Not unlike Nielsen in TV ratings, comScore is a de facto measurement currency that enjoys significant, if not overwhelmingly dominant share in the marketplace,” Hanlon said. “When legitimate outside challengers emerge and potentially threaten the status quo, incumbents tend to do all they can to stop or at least slow the encroachment – including strategic legal action, if necessary. These firms may enjoy a bit of flattery by being named in this suit – clearly comScore is rattled by their collective inroads in the market.”

Philipp Pieper, CEO of data provider Proximic, echoed Hanlon’s view. “It’s very interesting to see such a large organization like ComScore sue significantly smaller players,” Pieper said. “Is it the new normal? Furthermore, who wins at the end of this? Pixel-tracking and measurement are essential part of the entire industry. Is Comscore consequently now coming after everyone? Generally, I believe innovators should get credit for the innovation they’ve brought to market, but time is better spent creating products that create real value and that makes the ad ecosystem healthier. There’s work to be done.”

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  1. Sounds like Mr Pieper may have to pay the piper and he’s upset…

    They either have the patents or they do not – I seriously doubt that they’d proceed without a strong level of confidence in their position.

    The smaller players will either give up or pay up… Since most of them are superfluous to begin with, I’d wager that they’ll give up or in start-up talk, they’ll pivot.

  2. Rodger Dean

    Annonymous: although you claim to be an Ad Tech Exec, it appears that you know little of the patent system nor the online advertising space. Whereas the concept of law to protect an inventor’s intellectual property is a necessary one, the abuse of patent law is unfortunately becoming very common. So called patent trolls obtain outdated or superfluous technology and aggressively sue their competition in an attempt to either derive monetary gain or to slow down industry innovation in order to stay competitive. In this particular case, it appears to be both. Whether you have a strong case or not matters very little in this context as the cost to go to court to battle such a patent suit is typically prohibitive for start ups or small private companies, which is unfortunate as these are the types of companies that are usually the most innovative. If you read the article above and followed the online advertising industry, you would know that comScore not only did not create the patents that they are trying to leverage in this lawsuit, but also did not create the technology to compete against the defendants in the case. They obtained both through acquisition rather than through innovation. Let’s hope that this lawsuit is not successful as it sets a dangerous precedent for this industry. One in which a bigger, slower moving company manipulates patent law to stifle the innovation of smaller firms who are developing truly unique ideas that are moving the industry forward. Fortunately, based on my conversations with people in the industry, there is no support for comScore and it’s overly aggressive attempts to regain control of online measurement. The ship has sailed and they have no one to blame for their lack of traction than their own inability to keep up with the rapid pace of the online advertising industry and to develop relevant solutions. For the sake of online advertising, may the companies with the best technologies win.

  3. So Mr Dean, Are you advocating for the dismissal of this case on the fact that its an annoyance to you and your profits? Your assertion that I neither understand the industry or the law is laughable… I am anonymous for a reason.

    Realize this: If you and your fellow team members built a company with someone else’s technology and did not do your diligence on the origin and ownership of said technology – how is that a case of a strong arm attempt at patent enforcement? Its not… you and your team failed to assure your investors, clients and employees that you were acting legally and in good faith. Now you are blaming the owners of the IP that you’ve stolen, for enforcing their rights? That’s a very weak position.

    Yes the patent laws are absurd regarding software but this is the game that you’ve chosen to play – and unless you and your team have no filings and no intentions of filing for a patent – it makes you a hypocrite. According to one exec these are indeed “antiquated” processes . If that is so then they were easily found and easily understood – and so each company has done a disservice to its investors, employees and their clients by overlooking this obvious risk…

  4. Rodger Dean

    No Annonymous, you completely missed my point. My point was that in your post you automatically assumed that these companies and others (like Proximic and its CEO Phillip Pieper) were infringing on these patents. And your assumption was based on the fact that comScore wouldn’t proceed unless they had a strong level of confidence that these companies were in fact infringing. This is either a naive or purposefully misleading statement. I gave you the benefit of the doubt and assumed that you weren’t knowledgeable about patent law and thus it was the former. Patent trolls abuse the patent law and system all the time to shake down legitimate companies. Despite in most cases the trolls have pretty shaky cases, they can get a settlement as it’s almost always cheaper to pay them off than go to court (see WSJ article below). According to your logic, these legitimate companies should never have entered the market in the first place because there were patents out there somewhere that had some remote similarity to what they were doing. Fortunately no one heeds your advice as we would still be using rotary phones and Walkmans! In terms of this case, it’s hard to believe patents from the 1990’s cover the technology used by modern day internet companies. And even if you tried to argue that this were the case, than according to your logic, companies like Google, Adobe and Microsoft who also have web measurement technology should be barred from measuring the web or pay the so called “piper” as well. I am sure they would strongly disagree. In any case, the fact that we are even having this discussion makes it clear that the government is granting software patents that are much too broad and for a period too long and that we should rethink the patent granting process altogether for the sake of the whole industry (unless of course you don’t like forward progress and innovation). Fortunately it appears that some in government agree and just last week announced the proposal of the SHIELD Act in congress:

    “Two congressmen are putting patent trolls on notice with a bill that would introduce a “loser pays” rule in litigation.

    In practice, patent trolls scoop up patents, and then sue companies for allegedly infringing them. Critics say smaller companies are often forced to settle because of the prohibitive costs of litigation, despite the sometimes weak evidence backing the suits.” WSJ 8/6/12

    full article:

    This at least is a step in the right direction.