Augme alleges Velti infringed patents related to targeting mobile content

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Augme is suing Velti over targeted mobile marketing

In a new lawsuit, Augme Technologies Inc. alleges that Velti USA is infringing several of its patents related to delivering targeted ads to mobile users on their devices.

Augme claims Velti is infringing three different patents related to delivering targeted content via the Internet on a mobile device. The company is seeking an injunction against Velti to prevent it from using or selling the technology and is seeking monetary damages.

The complaint was just filed on Thursday and we are in the initial stages of analyzing the allegations,” said aspokesman for Velti USA, New York. “We understand that Augme has filed similar complaints against a number of other companies, including Yahoo, AOL and others.”

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Augme did not respond to a request for comment by the press deadline.

Competitive jockeying
The patents in the suit are related to methods for customizing content that is provided over the Internet based on the end users computing environment, connectivity, bandwidth level, geographic location, gender, age or other targeting criteria. This could include content such as advertisements, music and videos.

The example provided by Augme in its filing for the suit is a Web page about Texas cooking that airs relevant commercials for related food items, antacids and barbecues.

It is yet another example of where, regardless of pricing or advertising or sales, patents can be thrown into the competitive environment, said Jonathan Ezor, counsel at Olshan Grundman Frome Rosenzweig Wolosky LLP, New York, and assistant professor of law at Touro College Jacob D. Fuchsberg Law Center.

I would anticipate that Velti would challenge Augmes patents validity and possibly countersue based on their own patents, he said.

In the filing, Augme points to Veltis 5ML platform and mGage SDK as providing content targeting technologies to create advertisements for mobile Web pages.

The suit was filed in the U.S. District Court of Delaware. The patents in question were issued in 2003, 2007 and 2010.

According to Mr. Ezor, Velti has been issued five patents regarding online advertising, suggesting the company may respond with its own suit.

The first move by Velti is likely to be a counter claim that the patents are invalid and should not have been issued in the first place, Mr. Ezor said.

It is unclear if Augme will want to or even be able to extend the suit to Veltis customers who are using the technologies in question to deliver targeted content to mobile users.

It would depend on whether the marketers were actively accessing these technologies or simply using them, Mr. Ezor said.

With the mobile industry growing so quickly and involved parties constantly jockeying for a bigger role, patent infringement lawsuits have become commonplace as a way to gain a competitive edge.

Mobile marketing technology
While many of lawsuits in this area have focused on mobile hardware such as smartphones and tablets, there have also been a few key suits targeting marketing technology.

For example, Helferich Patent Licensing is alleging in a suit that NBA Properties Inc., the National Basketball Association, the New York Times, CBS and others infringed its patents by sending a series of messages and content to fans via SMS messaging and various social media sites (see story).

Additionally, Maxim Integrated Products Inc. recently sued Starbucks, Expedia, Capital One and Bank of the West, alleging these companies infringed several patents with their mobile payment apps (see story).

What differentiates these types of patents from device patents is that many of them – and I do not know if this pertains to Augmes patents is that many have appeared to observers to have been issued without a real understanding of what else was out there, Mr. Ezor said.

That these are patents for what people believe many others had done before or that are not truly unique, he said. This has as much to do with a lack of understanding or a lack of resources in the trademark office.

Both companies are competing along with other companies to grab a bigger piece of the rapidly growing mobile marketing space that enables brands to reach consumers via their mobile devices.

Augme claims it provides the only patented end-to-end mobile marketing platform and i n Aug. 2011, Augme agreed to buy Hipcricket, a mobile marketing company focused on SMS, 2D/QR codes, MMS, mobile Web sites, advertising networks, social media and branded applications.

Velti is a global provider of mobile marketing and advertising solutions and i n Sept. 2011, Velti agreed to acquire Air2Web, a leading mobile CRM solution as it looks to help brands and marketers improve their mobile marketing results.

The broader message for marketers is that patents are so hard to know about in advance and so diverse that this type of thing could happen to almost any company providing services, Mr. Ezor said.

Companies that are marketing services and buying them have to be ready for that, it has to be part of the contingency planning, including in their contracts and their insurance, he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

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