January 27, 2003
Hollywood, Florida – Hollywood-based MetroGuide.com, Inc. (MetroGuide) filed suit Monday against Dallas-based Hotels.com (NASDAQ:ROOM) and its president, Robert H. Diener, alleging violations of federal copyright and unfair competition laws. The action was filed in the Southern District of Florida: MetroGuide.com, Inc. vs. Hotel Reservations Network, Inc. d/b/a Hotels.com and Robert Diener, Case No. 03-20170, CIV-SEITZ.
A longstanding business partner of Hotels.com, MetroGuide alleges that its intellectual property has been misappropriated by Hotels.com, which provides the reservations back-end to MetroGuide's HotelGuide Network website. The suit contends that Diener personally directed marketing activity at Hotels.com, utilizing predatory advertising to cause "pop-up" ads to appear over MetroGuide's websites. Hotels.com also rewarded competing affiliates who stole MetroGuide's copyrighted content.
"Disputes of this sort are normally seen between competing entities that have no business relationship," observed James A. Gale and Samuel A. Lewis, both of Feldman, Gale & Weber, P.A., which represents MetroGuide in the suit. "To the best of our knowledge, of the number of Gator advertising-related lawsuits out there, ours is the only suit alleging that a business partner has been caught using predatory advertising to steal away customers from one of its own business partners."
Some customers, while trying to book a hotel on the HotelGuide service, saw a Hotels.com ad, unauthorized by MetroGuide, appear on top of the HotelGuide website. These "pop ups," samples of which are reproduced in graphic detail in the lawsuit, obscured the HotelGuide brand and content underneath them, enticing the customer to book the room directly with Hotels.com.
"Predatory advertising was part of a series of deliberate and specific actions taken by Hotels.com to unfairly derive income from MetroGuide's copyrighted work," said Mark Metz, MetroGuide CEO.
"It's been a stunning betrayal," said Metz. "We've worked for years to build a content-rich family of websites and have vigorously pursued those who infringe on the content and goodwill we have generated. But in this case we have been forced to take action to recover losses from a company that was supposed to be on our side."
The lawsuit also alleges that Hotels.com is liable for vicarious copyright infringement for the de-facto financing of multiple Hotels.com affiliates engaged in the wholesale theft of MetroGuide copyrighted work. "Copyright infringement has hurt our company tremendously," said Metz. "We have seen various affiliates of Hotels.com receive financially lucrative placements in search engines resulting in part from copying our content onto their websites."
"Hotels.com receives monetary benefit when any of its other affiliated companies makes a sale, and some of those sales have been clearly tainted by the theft of our content," said Metz. "I can't help but conclude that, despite the many times we notified them of violations, financial gain is the ultimate reason for Hotels.com's deaf ear to our requests for rectification.
"The most difficult thing for me over the past few years has been to watch people do things online that would be absolutely shocking if done off-line," said Metz. He observed that because it is the Internet, people don't seem to take otherwise tortious actions as seriously as they would if they were done in the real world. "I can attest that the money amounts involved are quite real. I watch my business being disassembled, brick by brick, byte by byte, not by those competing fairly in an open marketplace, but by companies operating as if normal business rules and ethics don't apply.
"Having spent much of the last year in battle fighting Internet pirates who stole our content, I am well aware of the toll of the litigation process even when one is one-hundred percent in the right. I choose litigation in this matter only as a last resort," Metz said. "The Internet is still young, and what we do now sets the stage for its future."
MetroGuide, located at http://metroguide.com/, is among the largest Internet providers of global travel information and reservations. Incorporated in 1996 and privately held, MetroGuide's network of websites attracts more than two million unique visitors monthly to its quarter-million-plus pages of travel related e-commerce sites. MetroGuide stands at the forefront of the battle to combat digital copyright piracy, with multiple recent court awards.
For more information contact Scott Rogers, (954) 981-5850.