The Mediation Is The Message: WPP's Kantar, TRA To Enter Arbitration
WPP's Kantar Media and TRA will sit down for their first mediation session next month to see if they can iron out differences related to a patent infringement dispute over similarities between TRA's 3-year-old TRAnalytics service and Kantar's RapidView offering which launched earlier this year. The dispute landed in court two months ago.
But the two sides, in a series of accusations and recriminations lobbed at each other over the past two weeks in court filings, continue to argue fiercely. The issue is a request by TRA to block Kantar from offering its service until after mediation -- or if that fails, a court trial.
The court papers reveal that WPP has invested $3.7 million over the last four years in TRA, in exchange for access to the inner workings of the firm and board representation. The briefs also indicate that on several occasions in 2010, TRA CEO Mark Lieberman proposed to high-level Kantar executives -- including CEO Eric Salama -- that TRA buy the Kantar subsidiary that developed and launched the RapidView service.
Lieberman's approaches were rebuffed, but Sheila Spence, Kantar's representative on the TRA board, suggested an alternative. The two sides negotiated a license fee to be paid by Kantar to TRA for the use of the latter's patented technique for a single-source research offering that links TV viewing levels to consumer purchasing behavior.
TRA rejected a simple license fee, but came back to Kantar last September with a more elaborate business plan intended to expand the relationship between the two companies. The TRA plan, now filed in court, proposed that Kantar license TRA patents for portions of its businesses in both the U.S. and Europe -- and that it become a U.S. sales representative that would pitch TRA services to TV networks. Under the proposal, Kantar Europe would also sell versions of TRA's offerings.
In addition to license fees, TRA proposed that Kantar help facilitate TRA access to DirecTV set-top-box data in the U.S. and BSKYB set-top-box data in Europe. The TRA business plan also proposed revenue sharing in both the U.S. and Europe.
According to the court papers, the TRA proposal led to in-depth due diligence on the part of both sides during which financial statements, customer lists and prospects, tech data, staff details and an array of patents, copyrights and other intellectual property was thoroughly examined in preparation for a possible deal.
TRA, it seemed, was confident -- or at least hopeful -- that a deal could be completed quickly. It even proposed getting the word out via press release specifically timed to Nielsen's IPO road show last fall.
But as it turned out, no deal was done. Kantar launched its competing service in March of this year, and the court fight ensued a short time later.
In its filing, Kantar asked New York District Court judge Shira Scheindlin to allow it to continue marketing its fledgling RapidView product throughout the course of litigation. The firm contended that TRA had not clearly shown it would be irreparably harmed in the marketplace unless RapidView was shut down at least for the duration of the case.
"If TRA is willing to accept payment in return for [Kantar's] alleged infringing behavior, than it certainly is not suffering irreparable harm," Kantar's brief stated.
Kantar also argued that the two services were not really head-to-head competitors because TRA focuses on ROI, while its own offering emphasizes future media planning and buying.
TRA disagreed, arguing that both services use the same methodology and vendors, target the same customers and provide the same services -- including helping networks and advertisers be more precise with planning, buying and ROI strategies.
TRA likened Kantar's service to "an inexpensive knockoff" of its own service, and one that Kantar is currently selling at a significantly lower price to customers.