Digital Impact Sues infoUSA Subsidiary Amid Tender Offer

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As Digital Impact and infoUSA continue to spar publicly over infoUSA's takeover attempt, Digital Impact has filed a lawsuit alleging that infoUSA-owned Yesmail is infringing on its e-mail technology patent.


The lawsuit was filed March 8 in the U.S. District Court Northern District of California San Francisco Division, the same day infoUSA responded to a recommendation by Digital Impact's board advising its stockholders to reject infoUSA's tender offer to buy their shares for $2 each.


The complaint alleges that e-mail marketing firm and competitor Yesmail infringed and continues to infringe on Digital Impact's patent, "Method and System for Remotely Sensing the File Formats Processed by an E-Mail Client." Yesmail, San Carlos, CA, is part of infoUSA's Donnelley Group. Digital Impact, San Mateo, CA, seeks damages to three times the amount adequate and legal fees.


In response to March 7 statements from Digital Impact regarding the attempt to buy stockholders' shares, infoUSA condemned the board for refusing to discuss its proposal and not looking out for stockholders' best interests.


Omaha, NE-based infoUSA commenced the offer for all outstanding shares of common stock Feb. 24 after an earlier offer to buy the company went unanswered. The offer was executed through DII Acquisition Corp., a wholly owned subsidiary of infoUSA, and is set to expire at midnight March 23, unless extended.


In its statement to stockholders, Digital Impact said it would be able to deliver long-term value in excess of infoUSA's offer.


Kevin Johnson, senior vice president of products and marketing at Digital Impact, said the lawsuit is not related to infoUSA's takeover bid.


"We first approached Yesmail regarding this issue in 2003," he said. "We have an obligation to vigorously protect our intellectual trade secrets from our competitors."


InfoUSA officials did not immediately return calls for comment yesterday.


Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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