The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Pinpoint Inc. is seeking royalties from Amazon.com and six other retailers under a lawsuit charging them with infringing on four patents on web site personalization technology.
Pinpoint Inc., Fort Worth, TX, is seeking royalties from Amazon.com Inc. and six other retailers under a lawsuit in which Pinpoint charges them with infringing on patents on web site personalization technology. Amazon operates the sites for five of the other retailers named in the suit: Target Corp., Toys R Us Inc., Borders Group Inc. , Egghead.com Inc. and Bertlemann AG`s CDNow.com. The suit also names U.K.-based Virgin Group Ltd.
Amazon declines to directly comment on the suit or its merits, saying it has a policy of not commenting on matters under litigation. The suit, which charges the retailers with infringing on four patents, was filed July 17 in U.S. District Court for the Northern District of Illinois.
Like other online retailers, Amazon uses personalization technology to present shoppers with merchandising displays and communication based on their shopping behavior, in effect customizing web sites for individual customers.
Pinpoint owns personalization technology patents issued in 1998 after applications were filed in 1994 and 1995, says president Daniel Henderson. Pinpoint was formed three years ago to take over patents on personalization and other technologies related to electronic content delivery, he says. It currently owns about 12 patents, he adds.
The original holders of Pinpoint`s patents on personalization technology maintain relationships with Pinpoint and one of them, Frederick Herz, is a major shareholder of Pinpoint, Henderson says. Henderson is also president and a principal of Phonetel Patent Services Inc., which provides patent management services for Pinpoint and other companies.
Jeetu Patel, executive vice president of Doculabs Inc., a Chicago research and analysis firm specializing in personalization and other forms of customer relationship management technology, says he doubts Pinpoint`s challenge will hold up in court. "Personalization is not something that`s new, so a patent on it is almost absurd," he says. "I think the court will either dismiss the case or it will be settled in short order."
Henderson declines to say how many other retail web sites Pinpoint checked for patent infringement, but says Pinpoint has no plans to litigate against other companies.