Go2Net, Inc. v. CI Host, Inc.
| Decision Date | 13 January 2003 |
| Docket Number | No. 50119-4-I.,50119-4-I. |
| Citation | 60 P.3d 1245,115 Wash. App. 73,115 Wn. App. 73 |
| Court | Washington Court of Appeals |
| Parties | GO2NET, INC., a Delaware corporation, Respondent, v. C I HOST, INC., a Delaware corporation, Appellant. |
Charles P. Nemellini, Sharon E. Cates, Foster Pepper & Shefelman, Seattle, WA, for Appellant.
Karolyn A. Hicks, Carl J. Marquardt, Stokes Lawrence P.S., Seattle, WA, for Respondent.
This lawsuit involves a dispute over the meaning of "impressions," a key term in Internet advertising. C I Host twice contracted with Go2Net to post advertisements on its website. The agreements provided that Go2Net would charge C I Host based on the number of "impressions" recorded by Go2Net's ad engine count. C I Host refused to pay for the service, purportedly because it suspected that Go2Net was including visits by search engines and other "artificial intelligence" agents, as well as human viewers, in its count of impressions. Go2Net filed suit against C I Host to enforce the agreements, arguing that the agreements unambiguously allowed Go2Net to count impressions in this manner. The trial court granted summary judgment to Go2Net, and denied C I Host's motion for reconsideration based on what C I Host argued was newly discovered evidence. C I Host appeals. We affirm.
C I Host, Inc., is a Texas-based provider of web hosting and electronic commerce consulting services. Go2Net, Inc., d/b/a Infospace, is a Seattle-based Internet service company that owns and manages a variety of websites and provides advertising services on the web. On May 15 and July 7, 2000, respectively, C I Host entered into separate advertising agreements with Go2Net, Inc., under which Go2Net agreed to display advertisements for C I Host on websites within the Go2Net network, including a website called HyperMart.1
Both advertising agreements provided that Go2Net would deliver C I Host a certain number of "impressions." The parties dispute the precise meaning of this term. A Wall Street Journal article dated November 16, 2001, discusses problems in the Internet ad industry arising from the fact that Internet publishers "use many different methods to measure ad impressions." Clerk's Papers at 139. Some count the number of times an ad is sent to a computer screen, while others count only the number of times it actually shows up on the screen. And some companies count visits by automated web crawlers and search engines as ad impressions, even though the "visits" were not made by actual human consumers. The article stated that several Internet companies were in the process of developing a standardized "single method for counting online ad `impressions.'" Id. at 139. The Interactive Advertising Bureau, a group of online publishers that rely on ad revenue, recently defined the term "impression" as follows:
1) an ad which is served to a user's browser. Ads can be requested by the user's browser (referred to as pulled ads) or they can be pushed, such as emailed ads; 2) a measurement of responses from an ad delivery system to an ad request from the user's browser, which is filtered from robotic activity and is recorded at a point as late as possible in the process of delivery of the creative material to the user's browser—therefore closest to the actual opportunity to see by the user.
See http://www.interactive jargonguide.org/Glossary/Term/impression (accessed October 25, 2002).
The May advertising agreement contemplated a one-month advertising campaign commencing on May 30, 2000, in which Go2Net would deliver approximately 385,000 "total impressions" for $4,820. The July agreement contemplated a twelve-month campaign, commencing July 13, 2000, in which Go2Net would deliver 30,000,000 "total impressions" for $286,100. The agreements provided that Go2Net's equipment would count the number of impressions and would bill accordingly:
Clerk's Papers at 69. The agreements did not guarantee or provide for payment based on the number of "click-throughs," or times a viewer clicks on a banner advertisement and is routed to the advertiser's website. Rather, the agreements provided that:
Go2Net makes no representations or warranties relating to the results of Advertiser's advertising by means of the Internet, including without limitation, the number of page views or click-thrus such advertising will receive and any promotional effect thereof.
Clerk's Papers at 70. Term "impressions" was not explicitly defined in either agreement.
Christopher Faulkner, CEO of C I Host, executed both agreements on behalf of C I Host. Each agreement contained an integration clause specifying that "[t]his Agreement supercedes and replaces any existing written or oral agreements between Go2Net and Advertiser and may be modified only in writing signed by both parties." Clerk's Papers at 57; 61; 70. Go2Net provided Faulkner with an Internet link and password so that he could monitor the C I Host campaign.
On June 27, 2000, Go2Net employee Claire Elias sent an e-mail to Christopher Faulkner regarding the performance of the one-month May advertising campaign. Attached to the e-mail was a Go2Net "Accipiter AdManager" report, which showed how many "ad requests" the C I Host ad campaign had generated, along with the number of "clicks" and the "click rate."2 The report defined the term "ad request" as follows:
The request of an advertising element as a direct result of a visitor's action, as recorded by the advertisement server software. This metric is independent of content and what is actually being displayed to the visitor. An ad request does not guarantee that a visitor actually viewed an ad, it only measures the opportunity for an ad to have been delivered to the visitor. This means that an ad request will be considered valid regardless of the visitor's ability to view graphics, and whether or not the HTML document containing the ad loads to completion. In practice an ad request will be recorded when a Web server or Ad server engages in the technical process of an advertisement insertion.
Clerk's Papers at 371. Later that same day, Faulkner sent a reply e-mail to Claire Elias at Go2Net, informing her that "[w]e are very pleased with the campaigns." Clerk's Papers at 366.
The record also contains a Go2Net "Engage AdManager" report, generated on August 23, 2001. This report is similar to the previous Accipiter AdManager report in most respects. However, whereas the Accipiter report referred to "ad requests," the Engage report referred to "impressions," and contained a definition of "impression" that was identical to the definition of "ad request" in the Accipiter report. Clerk's Papers at 96-100.
C I Host's computer network system possesses the capability to automatically track and monitor all persons visiting C I Host websites. Therefore, C I Host is able to create daily, weekly, and monthly reports that reveal the number of persons that have visited a C I Host website by clicking on a particular ad carried by a particular website. However, C I Host's monitoring system does not monitor or track visits by non-human entities such as web crawlers or search engines, also known as "artificial intelligence." At some point during the advertising campaign, C I Host audited its traffic activity reports and discovered that the number of persons who had accessed the C I Host website by "clicking through" from ads on Go2Net websites was lower than its typical average for this type of advertising. This purportedly caused C I Host to believe that Go2Net was not delivering the number of impressions for which C I Host was being billed.
On August 7, 2000, Faulkner sent an e-mail informing Go2Net that C I Host was canceling its advertising campaign:
We saw a huge drop in traffic to the site, the ads are not performing well ... the CTR are pathetic ... marketing is pulling the budget and moving it ... I am not sure if its not a good fit or what ... but we are pulling the campaign. Let me know immediately when it can be stopped as from August 7 on we are no longer wanting any of our ads to show up on any of the go2 networks.
Clerk's Papers at 412; 433.
Go2Net nevertheless continued to provide advertising services under the July agreement until October 2000, when it ceased to do so. C I Host had never paid a single billing, either under the May contract or the July contract. C I Host stated that it refused to pay because it disputed the number of impressions for which it was billed.
On December 21, 2000, Go2Net filed a complaint against C I Host to collect money due under the agreements. The parties commenced discovery. On August 22, 2000, C I Host submitted document requests to Go2Net. Go2Net responded by producing documents on September 25, 2001. However, Go2Net informed C I Host that one of its servers had crashed and was in the process of being rebuilt, and that Go2Net would supplement its responses if it found relevant documents on the rebuilt server.
On December 7, 2001, Go2Net filed a motion for summary judgment. The summary judgment hearing was scheduled for January 4, 2002. At the time Go2Net filed its motion for summary judgment, C I Host had provided written responses and objections to Go2Net's discovery requests, but still had not produced any documents. On December 28, 2001, C I Host produced some of the requested documents.
On December 31, 2001, counsel for C I Host faxed a letter to Go2Net's counsel noting that Go2Net's production did not include e-mails between May and July 11, 2000, and inquiring about the status of Go2Net's crashed server. C I Host also requested a CR 37 conference.
On January 2, 2002, counsel for the...
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