January 17, 2003 1:32 PM PST
Court: Network Associates can't gag users
New York state Supreme Court Justice Marilyn Shafer issued a ruling, made public this week, prohibiting the security software specialist from trying to use its end-user license agreements to ban product reviews or benchmark tests.
The judge called the company's attempted ban "deceptive" because it implied consumers who conducted the reviews would be violating the law, when they would not. Shafer has not ruled on damages.
The New York attorney general's office began investigating the case after Network World Fusion magazine published an unfavorable review of the Santa Clara, Calif.-based company's "Gauntlet" firewall software in 1999. According to the ruling, Network Associates demanded a retraction and accused the magazine of violating its licensing agreement. At the time, the agreement stated that people could not review or test Network Associates products without prior approval from the company.
The attorney general's office filed suit last year, claiming the licensing agreement's language may cause people to believe that they're breaking the law by reviewing the product without consent.
"Such clauses censoring speech and criticism chill not only consumers' speech, but also prevent academics, consumer advocates and technology experts alike from openly and freely discussing software products," New York Attorney General Eliot Spitzer said in a statement. "Restrictions like these threaten to hinder the spirit of innovation and critical appraisal the public needs to keep software effective, efficient and safe."
Network Associates said it plans to appeal the ruling. "I just don't see how we've deceived anyone," said Kent Roberts, executive vice president and general counsel for Network Associates. "Our goal here was to actually increase the amount of information available to customers."
Roberts said the company inserted the phrasing in question into its agreements to help make sure reviews and benchmarks reflected the current version of the product.
He said the ruling would not affect the company operationally, because it has been in the process of changing the language of its contracts for nearly a year. But it could also affect other software makers who insert such terms into their agreements. "I think they should be quite interested in the case," he said.
Particularly, Roberts points to a part of the judge's ruling that requires Network Associates to notify the court within 30 days if it makes further changes to the disputed language.
End-user license agreements have become a hot-button issue in the tech industry as more and more companies try to forge increasingly restrictive contracts. Some companies have tried to ban class-action lawsuits, requests for damages or reverse engineering of their products.
The ruling in the Network Associates case is believed to be the first to prohibit bans on software reviews.
The case doesn't necessarily have any immediate legal impact outside of New York state, but it may force other technology companies to tone down their licensing agreements or risk running afoul of consumer protection or free-speech laws.
"It seems a very clear warning to software companies that these types of provisions are not a good idea," said Fred von Lohmann, an attorney with the Electronic Frontier Foundation (EFF. "The software industry is going to have to grow up and treat consumers with the same respect that other industries have been forced to."