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Online Affiliate Marketing Is Patented?

Written on
Oct 21, 2010 
Author
Gavin Dunaway  |

patent11.jpgADOTAS – Did you know Internet affiliate marketing is patented? It was news to me too, but Patent No. 6,804,660: “System Method and Article of Manufacture for Internet Based Affiliate Pooling” was initially filed in 2001 by “inventors” Michael Landau and Evan Horowitz and granted in Oct. 12, 2004, to assignee Essociate. It describes a method, system and computer program allowing virtual affiliates access to an existing affiliate system.

Facebook was recently granted a patent that seemed to cover location-based social networking, but many in the industry saw it as a potential bargaining chip when negotiating with competitors. However, Essociate isn’t negotiating — it’s going for the jugular.

In March 2010 Essociate filed a patent infringement suit against Blue Whaler Investments, W4, Blue Phoenix Media, Flexoffers.com, Max Bounty, Direct Roi, Shareasale.com, Synervation Global. This isn’t the fist time Essociate has gone the legal route — the company filed suit against Clickxchange, Roi Rocket, CX Digital Media and others in May 2009, but the suit was dismissed with prejudice in February 2010.

Though it’s not clear what happened, the dismissal buoys Digital Moses’ suggestion that Essociate is targeting “companies with just enough money to pay some settlement but who wouldn’t have the resources or desire to go to trial, a mid-to-high six-figure endeavor at the very least.” He also notes that there is no real connection between all of the companies in terms of methods or services used — just that they all participate in affiliate marketing.

But who the hell is Essociate? We’ve never covered them at Adotas, though they have been on the affiliate scene since 1998. AffiliatePaying.com has no reviews at all. Apparently adult video service Vivid Video signed with them in 1999 and SnapNames.com affiliate program switched over in November 2009. Here’s their Twitter account as well — um, interesting tweets.

Affiliate network ShareASale filed a complaint against Essociate for declaratory judgment of patent non-infringement and invalidity on June 28. I’m reaching out to affected parties to learn more about this whole matter — if you’ve got any insight, hit me up at editor@adotas.com.





Gavin Dunaway is Editor, U.S. at AdMonsters, a leading trade publication, event producer and service provider for the online advertising industry. Previously, he had been Senior Editor of Adotas, where he arrived after years of ping-ponging around various industry publications. This Washington, D.C. native and George Mason University graduate also enjoys playing electric guitar so loud that the walls shake.

Reader Comments.

They’re porn guys. Started the xpays affiliate program years ago.

Posted by whatever | 3:42 pm on October 21, 2010.

The people who approve patents have totally lost their common sense. Allowing anyone to patent technology that is already in wide use is as ridiculous as allowing seeds and genes to be patented.

Eventually there will have to be class action suits to force logic to prevail. I just hope it is possible to find impartial judges to rule properly by then.

Posted by Gail Gardner | 4:41 am on October 22, 2010.

Networks, stop paying these thugs six figure settlements! Join forces and take these guys out. What a shame. Any good IP lawyer could rip this vague patent (http://essociate.com/patents/US6804660.pdf) to shreds. Affiliates this affects you too. Take action. Encourage your network of choice to fight back.

Posted by Appalled | 7:18 pm on October 22, 2010.

You can’t do anything without some one wanting to sue anymore.

Posted by mike | 9:47 pm on October 24, 2010.

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