Website analytics technology developer Digital Envoy has filed a lawsuit Monday against Google, charging the search-engine operator with abusing a licensing agreement between the two companies.
Digital Envoy sells a service that uses the IP addresses of website visitors to discern their demographic details. The company's customers can then use that data to target content and online ads more precisely to those accessing their websites.
Google signed on as a customer in November 2000 and pays Digital Envoy a $8,000 monthly fee for use of its technology. That agreement only allows Google to use Digital Envoy's technology on its own website, however, and not on third-party sites, as it began doing in August 2002.
Digital Envoy told Google in February that it considered the company's use of its technology on third-party sites to be a licensing violation, at which time Google "admitted to its conduct but refused to stop", according to the complaint.
Google offered to increase its monthly payment to $12,000, an offer Digital Envoy rejected as inadequate.
Digital Envoy is charging Google with misappropriation of trade secrets and unfair competition. The company is seeking unspecified damages for lost licensing revenue, along with punitive damages and all of Google's revenue from its allegedly improper use of Digital Envoy's technology.
Licensing disputes among technology partners are not uncommon, but this one comes at an inopportune time for Google as it positions itself for an expected initial public offering of its stock sometime this year. A Google spokesman declined to comment on the lawsuit.
Stacy Cowley writes for IDG News Service