July 16, 2004 12:15 PM PDT

Microsoft awarded $4 million in spam suit

A federal court has ordered a California man to pay $4 million to Microsoft for allegedly using the software giant's product names fraudulently as part of a spam scheme.

Microsoft announced late Thursday that Judge Manuel Real of the U.S. Central District Court of California had issued a summary judgment against Daniel Khoshnood of Canoga Park, Calif., and his businesses, Pointcom and Joshuathan Investments.

In the suit, Redmond, Wash.-based Microsoft contended that Khoshnood was responsible for two different spam e-mail campaigns that attempted to lure recipients into downloading desktop toolbar software. Microsoft claims that in order to promote his e-mails, Khoshnood misrepresented himself as being associated with the update service for Microsoft's flagship Windows operating system.

Khoshnood could not be reached for comment on the ruling, which was handed down last week.

According to the suit, which was filed in June 2003, Khoshnood spammed users of Microsoft's MSN portal and Hotmail e-mail system with messages labeled "Windows security warning."

The messages allegedly directed people to a Web site operated by Khoshnood, www.windowsupdatenow.com, that informed visitors they should download the toolbar to update their Microsoft security patches. As a result, Microsoft sued Khoshnood for trademark infringement, false advertising and "cybersquatting," the practice of attempting to profit from the use of another entity's trademark using an Internet domain name.

Microsoft cited the judge's decision as a major victory in its battle to discourage spammers from pestering its customers and using its trademarks inappropriately. In addition to the financial reparations, Khoshnood was ordered to permanently forfeit a collection of domain names he had registered that closely resemble the names of Microsoft trademarks, including www.hottmail.com, www.microsoftc.com and www.wwmsn.com.

Aaron Kornblum, Internet safety enforcement attorney for Microsoft, said the judgment, which includes $352,000 in attorneys' fees, should stand as a lesson to other would-be spammers that they will be caught and prosecuted.

"This decision sends a message that engaging in this sort of activity carries real legal consequences," Kornblum said. "Forcing spammers to pay up is an important part of discouraging the practice in general, because one of the most attractive elements of spamming has been that it costs so little to do."

Since launching its antispam initiative in 2003, Microsoft has filed some 60 spam-related lawsuits in the United States, most of which have not been resolved yet. So far, the company has only had one suit dismissed, while garnering six default judgments, four settlements and last week's summary judgment.

Kornblum would not say exactly how many spam-oriented lawsuits Microsoft plans to file, but the attorney indicated that the company has at least several dozen other cases "in the pipeline."

Earlier this month, the Massachusetts attorney general's office filed suit against a Florida man suspected of sending spam e-mail to thousands of consumers, in what's considered to be the first claim brought by a state under the federal Can-Spam Act.

6 comments

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HEY MORON
Next time don't take on the richest man in the world with a stupid scam....

How stupid can you get?
Posted by itanalyst (10 comments )
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Microsoft should spend the money on.....
Microsoft should spend the money on getting there software out on time. Everyday there is another delay whether it is with XP SP2 or Longhorn.
Posted by (1 comment )
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with 4 million dollars?
Is that enough for Gate's weekend spending?
Posted by (12 comments )
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Felons to be: Take Note!
You spammers out there take note. Move offshore and join the third-world living conditions there and therefore spam to your hearts content or clean-up your act and become civilized and police oneself.
Posted by MoiMe (3 comments )
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Scammers Suck
Visit <a class="jive-link-external" href="http://www.stop-scammers.com/" target="_newWindow">http://www.stop-scammers.com/</a> for the
latest scoop
Posted by (2 comments )
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The judgment was granted at the time, but was later reversed. Daniel Khoshnood was only required to pay $150k in Microsoft legal fees, as is typical procedure. Microsoft dropped the summary judgment against Daniel Khoshnood. The suit was a misunderstanding.
Posted by mainstreamoneal (1 comment )
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