Target and Toys R Us posted overall sales declines during the holidays.
Amazon’s use of personalization technology is being challenged in court, under a lawsuit by a company that owns and manages some 12 technology patents related to electronic content delivery.
Some of the biggest names in online retailing have used web site personalization to differentiate their online shopping experience from their competitors’, none more so than Amazon.com Inc.
Now Amazon’s use of the technology is being challenged in court, under a lawsuit filed by Pinpoint Inc., a Fort Worth, Texas, company that owns and manages some 12 technology patents related to electronic content delivery.
Pinpoint is seeking royalties from Amazon and six other retailers under a lawsuit in which Pinpoint charges them with infringing on four 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 Bertelsmann 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 was filed July 17 in U.S. District Court for Northern Illinois. Pinpoint, which was formed three years ago to take over technology patents, owns personalization technology patents issued in 1998 after applications were filed in 1994 and 1995, says Daniel Henderson, president of Pinpoint.
But Pinpoint’s challenge faces an uphill battle, since personalization has become so commonly used, analysts say. “Personalization is not something that’s new, so a patent on it is almost absurd,” says 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. “I think the court will either dismiss the case or it will be settled in short order.”