L.L. Bean Sues Claria Advertisers
The Freeport, ME, cataloger filed the complaints in Portland, ME, federal court against Nordstrom, JCPenney, Atkins and Gevalia. L.L. Bean alleges that each company violated its trademark rights by advertising through Claria. Claria, formerly known as Gator, serves pop-up ads tied to user Web behavior. Forty-three million computer users have its ad software, which is bundled with free software like file-sharing program KaZaA.
L.L. Bean alleges the ads violate L.L. Bean's trademarks and amount to an unfair business practice. The company also claims the pop-up ads confuse llbean.com visitors, who believe the ads come from its site.
A number of Web site owners object to Claria's business, saying it hijacks users from their sites in violation of their trademarks and copyrights. Claria asserts that users choose to download its ad software, which displays windows on their computer screens not unlike instant messaging programs, in return for free software.
L.L. Bean is one of at least nine companies with suits pending against Claria.
The latest legal salvos target Claria advertisers. The company boasts that more than 400 advertisers use its service, including NetFlix, FTD.com and Orbitz. Company representatives have pointed out that a number of companies now suing it were at one time advertisers.
In a statement, L.L. Bean CEO Chris McCormick said advertisers using Claria "cross the line of fair business practice." The company, like other Claria critics, contends that users are unaware they downloaded Claria's advertising software. Claria points out that half of its users uninstall its software within 30 days of downloading it, and each ad it serves carries labeling that it is from Claria.
Claria's business model has proven profitable. The company filed for an initial public offering last month that could raise up to $150 million. According to the filing, the company had net income of $34.8 million on $90.5 million in sales last year.