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Court Puts the Bite on Gator

Online marketing services firm The Gator Corp. was ordered last week to stop showing pop-up ads over certain Web publishers' pages without their permission pending resolution to a lawsuit accusing Gator of parasitic behavior.

The suit was filed June 25 by The Washington Post Co., The New York Times Co., Dow Jones & Co., Gannett Inc., Condenet Inc., Tribune Interactive Inc., Knight Ridder Digital and three other publishers.

The injunction delivered by Judge Claude Hilton in federal court in Alexandria, VA, on July 12 bars Redwood City, CA-based Gator from advertising on 16 Web sites. The publishers seek a permanent injunction and unspecified monetary damages.

Established in June 1999, Gator.com's first product was a virtual “smart companion” that automatically fills out online order forms and speeds shoppers through virtual checkouts. It claims 10 million users. Gator users also can opt into OfferCompanion, a service that delivers offers based on registration information and user behavior.

The publishers claim that by serving unauthorized pop-ups, Gator infringes on their copyrights and trademarks, depriving them of revenue.

What prompted the suit was some marketing literature Gator put out claiming it could place advertisements for competitors on those publishers' sites, according to the plaintiffs.

Gator, however, claims in a statement on its Web site that The New York Times has hired it to deliver just the type of advertising for which it is suing Gator.

“Specifically, the New York Times asked Gator to run its advertisements to consumers who viewed the WallStreetJournal.com, WashingtonPost.com, USAToday.com, and many other Web sites operated by most of the other plaintiffs in the lawsuit,” the statement said.

However, the Times in court documents claims that it used Gator unknowingly and only twice. In one instance, Gator signed up for the Times' home delivery affiliate advertising program, an open program under which any site can apply to market subscriptions and collect a bounty on them. In the second, Times ads were placed by Gator as part of a media plan created by ad agency Digitas, the Times claims. In both cases, according to the Times, as soon as it learned pop-ups were being placed on competitors' sites, it took steps to get them stopped.

Meanwhile, Gator claims the injunction barring its ads from the plaintiffs' sites will not affect its ability to provide services to consumers and its advertiser clients.

Plaintiffs' attorney Terence Ross, a partner with Gibson, Dunn & Crutcher LLP, Washington, said the injunction “sends a clear signal that the plaintiffs are likely to succeed on the merits of their claims against Gator.”

Gator has vowed to fight back.

“We are highly confident that once all the facts are presented … no court will issue a ruling eliminating a consumer's right to decide for themselves what is displayed on their own computer screens,” Gator CEO Jeff McFadden said in a statement. “Such a ruling would attack a consumer's right to use hundreds of popular software applications that automatically display separate windows while the consumer is surfing the Internet.”

This isn’t the first time Gator has come under fire from site owners. The Interactive Advertising Bureau last year threatened to sue Gator for obscuring publishers’ Web pages, but Gator filed a pre-emptive lawsuit. The two later settled their differences.

This latest suit reportedly will go to trial by the end of the year.

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