ComScore's Lawsuit Against Three Startups Is Pretty Deplorable
The news broke over a week ago but the tech world hasn't quite picked up on it: ComScore launched a patent infringement lawsuit against several competing ad-tech startups, claiming they violate eight ComScore patents on viewability.
The lucky chosen ones are AdSafe, DoubleVerify and Moat, three startups which help publishers determine if a digital ad has been served.
From what I can tell, it's ridiculous for a very simple reason, and deplorable for a whole host of reasons.
First, the ridiculous: Three of the eight patents in question are 15 years old. The others were filed in the early 2000s and finally issued in 2006 and 2008. (View here, here, here, here, here; credit to Adweek for pulling the links.) The claims are so broad that they basically encompass any monitoring of content online.
When a company is suing based on these grounds, it's not about protecting IP, it's about protecting one's own ass. ComScore's stock has been in a steady decline since it reported a loss in March. In its latest quarterly earnings report last week, the company's loss widened to $6.6 million, and it lowered its revenue outlook for the full year. The company is struggling and this move reeks of desperation. (A ComScore rep wasn't immediately available for comment.)
So there's that silliness. Beyond that, the move is deplorable for a whole host of reasons.
For one, ComScore has chosen to sue the small guys instead of competing fairly. At the crux of the lawsuit is ad viewability. It's a big deal because even though a webpage may load, outside forces like ad blockers, mobile sites, or outdated browsers can prevent an ad from being seen by users, and advertisers don't want to pay for those missed connections. The three startups have been in the market with their solutions to this problem for several years now.
But guess what? So has Google. The company earlier this year rolled out Active View, which is its own viewability measurement system. So is IAB--the industry bureau has been pushing for an industry standard. And so are a whole host of less-funded startups like C3 metrics or Adometry. It's not hard to figure out why ComScore isn't suing Google or any of the smaller guys--Google's army of lawyers would pummel them and any tiny startup wouldn't be worth the trouble. AdSafe, DoubleVerify, and Moat have raised $80.3 million in venture backing between them. ComScore's goal is to get these startups to either give up or enter into pricey partnerships with them.
I doubt the strategy will win ComScore any pity from Silicon Valley. Yahoo's patent lawsuit against Facebook didn't win it any positive sentiment, and that was at least a slightly more even playing field. Facebook was no longer a small, capital and resource-constrained company trying to take on the big guys. Even today Facebook is bigger, market cap-wise, than Yahoo. So that was at least somewhat of a battle of equals, and almost nobody supported Yahoo. The weight classes are even more lopsided in this instance.
Secondly, ComScore didn't even develop this technology to begin with. They won it as part of a lawsuit with Nielsen. The company sued ComScore for patent infringement in 2011; the suit ended in December with ComScore shelling out $7.8 million over the suit and in the process acquiring seven of the patents in question from Nielsen.
This might not classify their actions deplorable in some peoples' eyes, but I see it as a revenge lawsuit. ComScore got dragged into a messy patent battle and emerged unprofitable with a bunch of vague patents, which it has decided to use for evil, in my opinion.
Three, ComScore's own claims to viewability technology are a little loose. The company recently made the bold claim that it was the first and only audited and accredited service provider to have solved the problem of the "unfriendly, cross-domain iframe." This is apparently a huge pain point in ad verification and no one has figured out how to do it. According to ComScore:
More than once, we were met with skepticism and disbelief; it was as if we’d just said we’ve killed Sasquatch! The challenge of the unfriendly iframe had truly assumed almost mythic proportions. To this day, there are skeptics in the industry who do not believe that the thing we claim to do — to see into the unfriendly iframe — is possible. That’s a big reason why this MRC accreditation is especially gratifying. Because now you don’t have to take our word that we can, indeed, see into the cross-domain iframe; you can take theirs.*The asterisk was added later. It carries a disclaimer that says, well actually, this accreditation for Sasquatch-killing innovation doesn't technically work in Chrome, the number one browser, or Safari, or any WebKit browsers. Minor technicality.