In the Courts: Scareware, Facebook Trilogy and Double-Whammy and RIP Righthaven

Ascentive Settles Scareware Class Action for $9.6MM

Software vendor Ascentive, best known for its FinallyFast product, has agreed to pay $9.6 million to settle a class-action complaint that alleged it

tricked consumers into believing that their computers were underperforming by providing them with free ‘diagnostic scans’ that were designed to artificially report an exaggerated number of system ‘errors’ on the user’s computer to induce consumers into purchasing its software products

Ascentive had previously entered into a consent decree with the Washington Attorney General’s office.

More Info: Ascentive Agrees To $9.6M ‘Scareware’ Settlement, Online Media Daily

Court of Appeals Casts Doubt on Private Domain Use in Balsam Victory

In Balsam v Trancos (Cal. Ct. App. Nos. A128485, A129458 – February 24, 2012), the Court of Appeal affirmed the trial court’s $7,000 judgment in favor of notorious spamigator Dan Balsam under California’s anti-spam law (Business & Professions Code Section 17529 et seq.) It is the only case under the statute to actually go to trial (excluding Small Claims matters), but not the first to be heard on appeal.

The Appellate Court’s decision calls into question the continued use of private domain registrations for email marketing absent use of a domain that otherwise identifies the company sufficient to render it “traceable”.

The court held

that header information in a commercial e-mail is falsified or misrepresented for purposes of section 17529.5(a)(2) when it uses a sender domain name that neither identifies the actual sender on its face nor is readily traceable to the sender using a publicly available online database such as WHOIS.

Slip Op at 17-18.

MegaUpdate: Dotcom Seizure “Void” (for now) and Fake Demand Letters

A New Zealand court has held that the warrant seizing the assets of MegaUpload founder Kim Dotcom was “null and void” due to a procedural defect which may be remedied by a subsequent warrant. At the same, a non-existent German law firm called “Dr. Kroner & Kollegan,” purporting to act on behalf of copyright holders Universal, Sony, EMI, Warner, and Dreamworks. has been issuing demand letters to MegaUpload users offering to settle potential copyright infringement claims for 147 euros. claiming to actwhich claims to be acting on behalf of copyright holders Universal, Sony, EMI, Warner, and Dreamworks.

More Info: Wrong Paperwork Used to Seize MegaUpload Property,Judge Says, PC World, Criminals Target Megaupload Users With Fake Settlement Demands, TorrentFreak

Facebook Faces Dismissal of FacePorn TM Suit

A federal magistrate has recommended dismissal of Facebook’s trademark challenge against Faceporn of Norway, finding that “it alleges no facts to suggest that Faceporn has profited at all at Facebook’s expense.” The dismissal complete a trilogy of failed trademark strikes which also include Teachbook and Lamebook.

More Info: Eric Goldman Blog Post with decision.

Facebook Hit With Patent and Antitrust Suits

Yahoo! has filed a patent infringement lawsuit that claims

Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo!’s patented social networking technology.

The suit has been criticized some some as a pre-IPO shakedown, noting that Yahoo! filed a similar tactic with Google.

Facebook also has been hit with an antitrust suit by PageRage which helps users customize their Facebook page. PageRage claims that Facebook not only demanded that users remove PageRage skins from their profile pages but also organized an advertiser boycott.

More Info: Yahoo IP lawsuit: We patented “Facebook’s entire social network model”, Ars Technica; Yahoo Defriends Facebook With Patent Lawsuit–a Blatant Play for IPO Riches?, Forbes; Facebook Broke Antitrust Laws By Choking Ads Developer Says, Paid Content

Righthaven Stripped of All IP

A federal judge has ordered Righthaven to forfeit all of its intellectual property and intangible assets for auction by the court to pay attorneys fees and sanctions owed to Righthaven’s former opponents. Righthaven, which once sued blogs and others for posting excerpts of news articles seeking substantial statutory damages and domain seizures, has now had its domain seized and owes substantial sums to those it once sued. Righthaven has also created case law providing further protection for bloggers, as most recent a federal judge held that an five sentence excerpt of an article posted on the blog DemocraticUnderground was fair use.

More Info: Judge orders failed copyright troll to forfeit “all” copyrights, Ars Technica; Court Declares Newspaper Excerpt on Online Forum is a Non-Infringing Fair Use, EFF