CrakMedia, ClickBooth Win Legal Fight Over Affiliate Program Patent

LOS ANGELES — In a ruling of particular interest to companies offering affiliate programs, a federal judge on Wednesday sided with defendants CrakMedia.com and ClickBooth.com, which were both hit with a patent infringement suit over systems used for configuring an existing affiliate network to receive “virtual affiliates” from an affiliate pooling network.

The patent suit, waged by San Francisco-based Essociate, alleged that adult entertainment company CrakMedia and ClickBooth, a mainstream affiliate marketing company, violated U.S. Patent No. 6,804,660.

But on Tuesday, U.S. District Court Judge James Selna handed the defendant companies — as well as other affiliate programs that might find themselves defending against the patent — a huge victory.

Selna granted the defendants motion for judgment on the pleadings, ruling that Essociate’s claims asserted against them were “patent ineligible” and therefore invalid.

Essociate, led by co-founders Evan Horowitz and Michael Landau, sued the companies in December over how a merchant can gain access to customers from a referring entity without having to compete with other merchants for those same customers. 

The suit was another in a number of patent infringement claims filed by Essociate against numerous affiliate networks dating back to 2009.

U.S. Patent No. 6,804,660’s process allows a merchant to avoid or reduce competition while also allowing it to track which and how many customers the referring entity directs to the merchant.

However, Selna, noting that “mathematical algorithms, including those executed on a generic computer, are abstract ideas,” rejected Essociate’s contentions that its patent was valid.

Implementing an abstract idea on a generic computer is not patentable.

Selna, in his decision, agreed with CrakMedia and ClickBooth’s contention that the steps in the underlying patent simply embody the fundamental economic practice of receiving and tracking referrals from referral sources, and providing incentives to those referral sources — both concepts that involve the “mere formation and manipulation of economic relations.”

Selna further ruled that Essociate’s patent does nothing more than seek to limit the use of the abstract idea of receiving and tracking referrals from referral sources to the technological environment of an existing affiliate system. 

“The fact that the two affiliate systems that existed prior to the ‘660 patent—the standalone system and the affiliate hub system — also received and tracked referrals further demonstrates how this concept is a fundamental economic practice,” Selna wrote in the ruling.

Late Wednesday, Essociate counsel Derek A. Newman filed an appeal to the U.S. District Court of Appeals for the Federal Circuit in Washington over Selna’s order on the motion for judgment on the pleadings as to patent ineligibility.

Crakmedia’s CEOs and co-founders, Nicolas Chretien and Xavier Farooghi, in a release this afternoon, said: “Crakmedia respects and believes in intellectual property rights. But we were determined not to give in to a frivolous lawsuit. We did not infringe Essociate’s patent and we never believed Essociate should have been allowed to patent the concept of affiliate pooling.”

View ruling

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

AV in Focus: A Guide to Unlocking Compliance With Clarity

The age verification era isn’t coming — it’s here. Laws are already on the books in numerous U.S. states, as well as in the U.K., France and beyond.

Canadian Privacy Commissioner Endorses National AV Bill

Philippe Dufresne, privacy commissioner of Canada, has voiced support for a bill that would impose fines of up to $500,000 on adult sites that do not implement age verification for Canadian viewers.

Ricky Johnson Launches 'Ricky's Resort' Through YourPaysitePartner

Ricky's Room studio honcho Ricky Johnson has launched his latest site, RickysResort.com, through YourPaysitePartner (YPP).

Industry Attorney Paul Cambria Retires After 50 Years of Practicing Law

After more than a half-century in practice, during which he provided the defense in some of the adult industry's most notable legal cases, attorney Paul Cambria has retired.

2026 XMA Nominations Party Set for Nov. 19 in Hollywood

The 2026 XMA nominations reveal party will take place at Keys on the Sunset Strip on Wednesday, Nov. 19, with red-carpet arrivals starting at 8 p.m.

New VR Membership Site 'DeepInSex.com' Launches

The new 8K VR membership site DeepInSex has officially launched.

NATS Launches Integrated Content Management System

Too Much Media (TMM) has rolled out an integrated, no-charge Content Management System (CMS) to its NATS platform.

AEBN Reveals Avery Lust as Top Trans Star for Q3 of 2025

AEBN has published its top trans stars list for the third quarter of 2025, with Avery Lust landing atop the leaderboard.

FSC: California's Device-Based AV Law Does Not Apply to Adult

The Free Speech Coalition (FSC) put out an advisory today explaining that California's new device-based age verification law does not apply to adult websites.

Reena Sky Launches New Paysite

Reena Sky has launched her new official paysite, ILoveReenaSky.com.

Show More