September 07, 2006
Adware, Spam and Some of My Other Favorite Topics
By Eric Goldman
There has been a flurry of interesting legal developments in the last few days:
* The Battaglia v. DirectRevenue lawsuit, another of the putative class actions against adware vendors, has preliminarily settled. As David Fish points out, the settlement offers very little additional value for consumers beyond the settlement in the Sotelo case. Plaintiff's counsel gets $45,000--a pretty small payday for a case like this.
* The FTC case against Enternet Media has reached a stipulated order/settlement, including a $2M+ payment to the FTC. Enternet Media allegedly was one of the companies flashing banner/pop-up ads warning that your computer was infected and they would help; when users took advantage of their "help," they allegedly installed a bunch of harmful software onto users' computers.
* Jaynes v. Virginia, 2006 WL 2527678 (Va. App. Ct. Sept. 5, 2006). Virginia's intermediate appellate court upheld Virginia's harsh anti-spam law against both jurisdictional and First Amendment challenges. I believe Ethan Ackerman will guest-blog a more thorough analysis of this case soon. For now, Venkat has a thoughtful discussion. According to the Washington Post, Jeremy Jaynes will appeal the appellate ruling. If he can't overturn the ruling, he's facing an incredible 9 years in jail.
* Lands' End, Inc. v. Remy, 2006 WL 2521321 (W.D. Wis. Sept. 1, 2006). An affiliate registers some typosquatted domain names as a way of "diverting" consumers through those URLs to get the affiliate commission. The court denies the defendants SJ on the ACPA, fraud and breach of contract claims, but they do get SJ on the false advertising claim. Rebecca has the recap.
* According to Reuters, Bertelsmann is paying $60 million to settle Vivideni's lawsuit over Bertelsmann's investment in (and support of) Napster. (It's not clear how this settlement relates to Vivendi's acquisition of BMG). This lawsuit was particularly interesting because it tested the boundaries of investor liability for investing in copyright-infringing companies (a liability normally we expect to be precluded by the corporate veil). John O's discussion of some previous rulings in this case. Note that Bertelsmann was not the only investor-defendant in the case, so it may still be ongoing.
* The lawsuit over the fictional status of James Frey's putatively non-fiction book A Million Little Pieces has preliminarily settled. Buyers can get a full refund, but only if they jump through some significant hoops (like sending in an actual part of the book or packaging, plus a sworn statement that the purchaser would not have bought the book if they knew it was partially fiction). The publisher's liability is capped at $2.35M, which includes refunds, attorneys' fees and a donation to charity. Note that the publishers had offered rescission earlier in the case, but some plaintiffs were seeking compensation for their lost time/attention. It appears the publisher successfully limited its liability to rescission, and by making the barriers high enough, the publisher won't even have to make rescissions across-the-board.
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