April 26, 2004 5:25 PM PDT

Google fires back at Digital Envoy

Google has countersued Digital Envoy, which claims that the search leader misappropriated its geo-targeting technology to deliver sponsored results.

Mountain View, Calif.-based Google filed a complaint against Digital Envoy on April 16 in the Northern District Court of California, asking for declaratory judgment that it did not misuse its technology license. It also claims that Digital Envoy wrongly filed its suit in Georgia, where the geo-targeting software company is based.

Google was responding to a lawsuit filed by Digital Envoy--its longtime technology partner--only weeks ago. The lawsuit, filed in U.S. District Court in Atlanta, alleges that Google overstepped the bounds of its contract to use Digital Envoy's IP Intelligence, software that pinpoints Web surfers' physical location and is used to better deliver local search results and relevant ads.

Google has held a license for the technology since November 2000 for its popular search engine. But when Google expanded its search-related advertising network to third-party publishers and non-search Web pages, it failed to secure appropriate licenses, according to the complaint.

"Google's going on the offensive," said Timothy Kratz, an attorney representing Digital Envoy.

Google representative David Krane said the company believes that Digital Envoy's allegations lack merit. "We have always and continue to act fully within our rights under our agreement with Digital Envoy."

Google currently pays $8,000 a month for its use of the Digital Envoy technology and has offered to increase that amount by 50 percent, Kratz said. But he suspects that Google is making millions from syndicating its ads to third parties and that the court discovery process will determine just how much. That way, it can come to appropriate fees.

Google's complaint argues that the case is a contractual dispute, requiring that it be filed in the state where it is headquartered, California. But Kratz said that the complaint is not contractual and therefore can be decided in Georgia. He said it's not a breach-of-contract claim but rather tort claims that Google has engaged in unfair business practices and misuse of technology falling outside the contract.

 

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