COURT RULES THAT GRADIENT ANALYTICS’ CROSS-COMPLAINT MAY PROCEED AGAINST OVERSTOCK.COM, INC. ON ALL COUNTS
AMENDED CLAIMS TO BE FILED AGAINST OVERSTOCK CEO PATRICK BYRNE

Scottsdale, July 10, 2008

Gradient Analytics, Inc. announced today that the Marin County Superior Court has ruled in the case of Overstock.com, Inc., v. Gradient that all of Gradient’s cross-claims against Overstock (NASDAQ:OSTK), including claims for defamation, intentional interference with prospective economic advantage, and unfair business practices, may proceed, thereby rejecting Overstock’s challenge to certain of those claims. Gradient has alleged that Overstock and its CEO Patrick Byrne, have waged a malicious smear campaign against it in retaliation for Gradient’s published opinions concerning the quality of Overstock’s earnings and other aspects of its business. Gradient is seeking compensatory and punitive damages against Overstock, as well as injunctive relief under its California Unfair Business Practices claim.

The court also ruled, in response to  Mr. Byrne’s statute of limitations challenges, that Gradient may amend its pleading to add recent instances of Byrne’s ongoing false and defamatory statements about the company and other wrongful conduct on his part. The court also rejected Byrne’s attempt to dismiss Gradient’s claim for tortious interference against Byrne. Gradient will be filing its amended cross-complaint in the next 20 days and fully expects to present its claims against Byrne and Overstock to a Marin County jury.

“We are very pleased with the court’s ruling,” stated Gradient’s CEO, Brad Forst, “and eagerly await the opportunity at trial to present all the evidence of Overstock’s and Byrne’s wrongdoing to a jury.”   Mr. Forst also noted that “back in April, Overstock’s chief legal officer tried to characterize Gradient’s cross-complaint as a ‘smoke screen,’ and vowed that Overstock ‘will simply turn on the fans and blow that smoke right back at them.’  Well it now seems those fans are headed straight back to Overstock’s Merchandise Returns Department.”

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