Legal Battle Escalates Between Top
Free ISPs

The third and fourth largest dial-up providers in the nation, Juno and NetZero respectively, duke it out over delivering advertisements to free access subscribers.

by Jim Wagner of internetnews.com [January 8, 2001]

Federal courts Monday awarded NetZero, Inc. a temporary restraining order against Juno Online Services, Inc. and its use of patented ad banner technology.

NetZero officials believe Juno and other ISPs throughout the country are causing irreparable financial harm with continued use of its ZeroPort technology, patented just last month.

Mark G. Goldston, NetZero chairman, was pleased with the court's ruling.

"A temporary restraining order is a form of extraordinary relief which, as a matter of course, is not granted outside a strong showing of likelihood of success and infringement which is causing irreparable harm.

"We believe our patent is a powerful proprietary right which will provide us with a competitive advantage in our market," Goldston said. "We believe the court's order is further validation of our position. Other ISPs should take note of the court's ruling and carefully consider their use of similar ad banner windows."

It's uncertain whether NetZero has filed a restraining order against the other unnamed ISPs, or whether they are just targeting rival free provider, Juno. Officials were unavailable for comment.

However, Juno officials were not fazed with the restraining order handed out Monday.

Charles Ardai, Juno president and chief executive officer, said the technology is theirs and looks forward to pursuing it through legal channels, if necessary.

"It is our contention, however, that (this) form of advertising does not in fact infringe on any valid patent issued to NetZero," Ardai said. "For this reason, we still intend to vigorously contest the allegations made by NetZero in this lawsuit."

"Moreover, we continue to believe that NetZero is infringing on a valid patent issued to Juno, and look forward to pursuing, through appropriate legal channels, the resolution of both this lawsuit and the one we filed earlier against NetZero" Ardai added.

Juno, with approximately 12.8 million registered users, garners new customers with a free-to-pay acquisition model. Once customers are hooked on the free Juno service, many upgrade their service to the $9.95 access plan or more profitable broadband services.

NetZero, the fourth largest ISP in the nation with 7.2 million registered users, has been operating under a cloud of financial strain throughout 2000. Last week, it announced it would start charging usage fees to its heavy Internet users.

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