NETZERO UNABLE TO RESTRAIN JUNO.

Byline: Jesse Hiestand Staff Writer

WESTLAKE VILLAGE - NetZero Inc. has lost a bid to keep a rival free Internet service from advertising in a way NetZero claims to have patented.

Officials at Juno Online Services Inc. said Friday that U.S. District Court Judge Stephen V. Wilson has lifted a temporary restraining order issued in January in a patent infringement suit brought by NetZero.

The order prevented Juno from putting advertisements in the on-screen ``floating banner'' that computer users see when they access the Internet for free. Juno plans to resume the revenue-generating ads next week.

``We believe it's a very encouraging sign,'' said Gary Baker, a spokesman for New York-based Juno. ``We are not infringing on any valid patent held by NetZero.''

NetZero officials refused to comment on their lawsuit - or on the case in which they are being sued by Juno for allegedly infringing on one of its patents.

The two companies, along with Kmart Corp.'s BlueLight service, are the last to offer free dial-up Internet access after at least five competitors went out of business.

Economic pressures have forced NetZero, Juno and BlueLight to limit the number of hours people can use the Internet for free and begin charging for unlimited access.

Juno says 840,000 of its 4 million active users are now paying.

NetZero has not announced how many of its 4.4 million active subscribers have signed up since December, when it limited free access to no more than 40 hours a week.

The rivalry between the two companies goes beyond competition for customers.

Last year, Juno sued NetZero for allegedly infringing on a patent that enables advertisements to be shown when users are not connected to the Internet.

NetZero later sued Juno, claiming infringement on its patent to put advertisements in the on-screen banners.

NetZero was seeking to broaden the restraining order and extend it through the date of trial when Judge Wilson lifted the order entirely on Thursday, Baker said.

Because two-thirds of its revenue comes from subscribers, Juno was not sharply affected by losing the free service banner ads through most of the first quarter, Baker said. Those ads account for about 4 percent of its annual revenue.