August 31st, 2005
Judge rules in class action against Direct Revenue
I’ve been following the lawsuit filed against Direct Revenue in April. (The PDF document of the complaint can be seen here.) Excerpt: "A class action lawsuit claims that the Defendants are involved in installing “spyware” on millions of computers without the computer owners’ consent, utilizing it to track the Internet browsing habits of the owners and then send them intrusive targeted “pop-up” ads."
In June, Direct Revenue filed a motion to dismiss blogged here. Additional court documents can be read here and here. Direct Revenue argued that the court ought to dismiss the case because Plaintiffs (i.e., the users) must have seen the End User License Agreement (EULA) and clicked through to agree to it, thus effectively telling a court of law that its software is always installed with the user’s full knowledge and consent, despite numerous statements indicating otherwise by users seeking help to remove it.
The judge, in fact, evidently did not agree. I heard from David Fish today about the decision.
The judge is permitting our lawsuit claims for trespass, negligence, consumer fraud, and computer tampering to go forward against DirectRevenue and BetterInternet. (but not DirectRevenue’s holding company since it is allegedly just a holding company). The judge also is permitting our trespass claim to go forward against two advertisers— one of which is an "ad-server" and the other is one whose pop-up ads were sent via DirectRevenue.
A few interesting comments from the judge: "many companies and computer users consider pop-up advertisements and Spyware an Internet scourge" (p. 17) and that the allegations in the lawsuit "reflect the frustration of many computer users" (p. 18).
In ruling that the lawsuit could proceed, the court recognized that trespass to personal property “has reemerged as a cause of action in Internet advertising” (p. 16). The court ruled that a trespass claim “may be asserted by an individual computer user who alleges unauthorized electronic contact with his computer system that causes harm, such as Spyware” (p. 16)
In response to an argument that individual advertisements can be easily closed, so they cannot cause a legal injury, the court ruled that this “ignores the reality of computer and Internet use, and plaintiff’s allegation that part of the injury is the cumulative harm caused by the volume and frequency of the advertisements. The fact that a computer user has the ability to close each pop-up advertisement as it appears does not necessarily mitigate the damages alleged by plaintiff, which include wasted time, computer security breaches, lost productivity, and additional burdens on the computer’s memory and display capabilities.” (p. 21).
The court document can be read in full at http://www.spywarewarrior.com/SCAN2854_000.pdf
This is certainly good news for computer users. It will be most interesting to see how the lawsuit proceeds from here. Stay tuned.
