It looks like the brouhaha surrounding social-app moneymaker Offerpal Media is bigger than founder Anu Shukla's "sh*t, double sh*t, and bullsh*t" response to the accusation that its business is built on scamming consumers. It's got upcoming developments in two lawsuits, one in which it's the plaintiff and one in which Shukla is a defendant.
VentureBeat's Dean Takahashi reported Thursday that a lawsuit was filed in an Alameda County, Calif., superior court against Shukla and co-founder Michael Liu on behalf of Kevin Halpern, who alleges that he helped found the company and was then shut out. In a court complaint, Halpert says that in exchange for offering his social-networking expertise to what would become Offerpal, Shukla promised him a 15 to 20 percent stake in the company that never came to fruition.
The defendant's motion to dismiss the breach-of-contract suit is scheduled for November 24, according to public court documents. On Wednesday, Offerpal had announced that Shukla would be leaving her post as CEO and would be replaced by digital-ad veteran George Garrick.
But that's not the only legal dispute that Offerpal is in. There's a judicial settlement conference scheduled for Friday in the trademark infringement lawsuit that Offerpal filed against Kickflip, a former customer that went on to create a competing business, called Gambit, according to a person familiar with the court details. The suit was originally filed in April, and the status of a potential settlement is currently unclear because most of the events thus far, as well as Friday's scheduled meeting, have been behind closed doors.
But the reason why Offerpal has been in the news so much as of late has been because of Shukla's public altercation with TechCrunch's Michael Arrington at last month's Virtual Goods Summit in San Francisco. In response to Arrington's allegations that Offerpal's profitable business, used by many social-gaming companies as a way for users to earn virtual goods in-game, actually misleads players into signing up for paid offers and subscriptions.
Following the Arrington-Shukla spat, a number of high-profile names in the gaming and social-networking world came out against developer-app scams and misleading ads. Offerpal maintains that it runs a legitimate business. But it's clear that this company's issues run quite a bit deeper than a single PR fiasco.
One of the issues when you create something simple, easy to use, and phenomenally popular is that there will invariably be some folks who come along and say that it was their idea first.
Naturally, that's started to happen to Twitter. Earlier this month, a patent lawsuit was filed against Twitter on behalf of a Texas-based company called TechRadium, which has a patent to "allow a group administrator or 'message author' to originate a single message that will be delivered simultaneously via multiple communication gateways to members of a group of 'message subscribers' over e-mail, text message, or another platform.
More specifically, TechRadium's technology has been applied to a product called Iris, which is designed to be able to send out mass messages for emergency response purposes. The lawsuit claims that Twitter's service amounts to "offering for sale or use, or selling or using these products without license or authority from TechRadium."
TechRadium claims it has "suffered actual and consequential damages," the suit reads, but isn't very specific beyond that. "Plaintiff does not yet know the full extent of such infringement and such extent cannot be ascertained except by discovery and special accounting." As for damages, the company seeks "an amount not less than the maximum amount permitted by law."
I'm not really sure what TechRadium's aim is here, because, as Wired put it, similarities between the two companies seem like "a ridiculously obvious use of modern technology." Remember when "microblogging" wasn't just Twitter, but also Jaiku (sold to Google and effectively shelved), Pownce (sold to Six Apart and shut down), and Plurk (still around, but we haven't heard a peep out of it recently)? There have also been, in the mass-messaging space, Yahoo's , Google's ill-fated Dodgeball, and Microsoft's still-experimental Vine--which also has an emergency-management angle.
And beyond that, the concept of short, pithy messages is nothing new. (Telegraphs? The short-form diaries of John Quincy Adams? Those funny banners with short messages on them that you sometimes see flying behind propeller planes at the beach?) My guess is that TechRadium is hoping the language in its patent is vague enough so that, at the least, it can get some recognition or (less likely) compensation.
So it's no shock that Twitter is going to get slapped with repeated accusations of "hey, we got there first." The same thing happened to Facebook, a far more complicated and less open-ended service, when the founders of ConnectU, a failed social network that had originated around the same time at Harvard University, claimed Facebook founder Mark Zuckerberg had pilfered their business plan in creating his now-billion-dollar company.
And, as Wired points out, Twitter is well aware of this: leaked internal documents say that "We will be sued for patent infringement, repeatedly and often." Earlier this summer, the company hired its first general counsel right out of Google's legal ranks.
As for TechRadium, unless they can basically prove that Twitter's founders snuck into their offices and went hogwild with a photocopier and some stolen documents, this is one case that probably won't get off the ground.
A 17-year-old from Michigan has filed a lawsuit against e-commerce powerhouse Amazon after it deleted a book he had purchased for his Kindle device.
The high school student, Justin D. Gawronski, filed suit in a Seattle court along with California resident Antoine J. Bruguier, and they are seeking class action status.
Amazon forcibly (and ironically) recalled copies of George Orwell's "1984" and "Animal Farm" earlier this month after it was revealed that they were unauthorized. Justin Gawronski's complaint alleges that he was reading "1984" as summer reading for an advanced-placement class and had to turn in "reflections" on each hundred pages. With the loss of the digital book, Gawronski claims his page count was thrown off and his notes were "rendered useless because they no longer referenced the relevant parts of the book."
Amazon has declined to comment on the lawsuit, which appears was first reported late Thursday by The Wall Street Journal's Digits blog.
While buyers received refunds for the recalled copies of the Orwell books, the fact that no advance notice was given threw many customers off and created an uproar against Amazon. The lawsuit, for one, alleges that Amazon did not make it clear enough to customers that remote book deletions were a possibility. It also alleges, as do critics, that the company violated its own terms of use.
"The power to delete your books, movies, and music remotely is a power no one should have," the lawsuit quoted Slate's Farhad Manjoo as saying in an opinion piece following the book deletions.
Amazon founder Jeff Bezos put out a public apology shortly after the fiasco unfolded, but it's not clear how the company's policies will (or won't) change in the future.
Wouldn't the Burn Book have been even worse if it had been a blog?
(Credit: Paramount Pictures)You just can't make this stuff up.
Liskula Cohen, a Canadian model, has sued Google because of offensive remarks made about her on a blog hosted by its Blogger publishing service, according to the New York Daily News.
The 36-year-old Cohen, who appeared on the covers of W and Australian Vogue magazines in the early '90s, wants to know the identity of an anonymous blogger who called her "our #1 skanky superstar," among other lovely epithets.
The blog is called Skanks in NYC, and it is devoted more or less to ridiculing photographs of Cohen, all of which were posted on a single day: August 21, 2008. But Cohen has taken enough offense to pursue legal action against Google in a Manhattan court, demanding that the Internet giant expose the "Skanks" blogger's details.
"I'm tall, I'm blond, I've been modeling for many years, and people get jealous," she told the Daily News. "If I had to deal with everyone who is jealous, I wouldn't have time to do anything else." Her lawyer called the site "libelous" and "defamatory."
Meanwhile, the search terms "Liskula Cohen" and "Skanks in NYC" skyrocketed to the top of (ironically) Google Trends, earning "on fire" ratings. Hey, considering that I'd never heard of Liskula Cohen before, and I'm sure that I'm not the only one, this might've been the best thing that ever happened to her.
But is her claim against Google viable? Um, probably not.
A class action lawsuit filed earlier this week targets Facebook and eight of the participants in Beacon, its ill-fated advertising product that shared information about third-party site activity with the social network. The set of 20 plaintiffs, mostly residents of Texas, filed the suit in the U.S. District Court for the Northern District of California on Tuesday. Named as defendants are Facebook, as well as current or former Beacon participants Blockbuster, Fandango (owned by Comcast), Overstock.com, STA Travel, Zappos, Hotwire (owned by IAC/InterActiveCorp), and GameFly.
A Facebook representative told CNET News on Thursday that the company had not yet actually been served with the lawsuit, and that its legal team consequently did not have a formal statement at the time. STA Travel, Gamefly, and Overstock all declined to comment; none of the other defendants could be immediately reached.
"Until we're served, we're not being sued, so we don't have any comment," Overstock general counsel Mark Griffin told CNET News.
Beacon gained almost immediate notoriety when Facebook unveiled it as part of its Facebook Ads announcement last fall. Privacy advocates, most notably liberal activist group MoveOn.org, lambasted the program for not allowing users to disable it easily. Facebook has since modified the program and the controversy has wound down. But in the lawsuit, the plaintiffs point to the window of time before Facebook instituted the new controls--between November 7 and December 5 of last year--and claims that the social network still has access to a large amount of user data that was gathered in that period.
"If the user was not a member (of Facebook), Facebook still obtained the notification from the Facebook Beacon Activated Affiliate," the filing for Lane et al v. Facebook, Inc. read. "Information regarding user activities was sent in real time to a third party Web site--one which was not open or active in the user's browser, and one which, in many cases, the user may never even have visited or heard of."
There's one odd law that may make the plaintiffs' case stronger: the Video Privacy Protection Act of 1988. The law was passed amid the fracas surrounding Robert Bork's controversial nomination to the U.S. Supreme Court, when a journalist obtained Bork's movie rental record from a local video store and published it.
That's why there's already been a suit involving Beacon that specifically targeted Blockbuster for participating in such a program: a Texas woman filed suit against Blockbuster in April, claiming that the VPPA bars it from Beacon. Facebook was not named as a defendant in that suit, and though the plaintiff sought class action status for her case, she does not appear to have any involvement in this week's suit.
The defendants named in the suit don't encompass all of Facebook's original Beacon partners, but several of them could tie into VPPA protections: GameFly rents video games, Fandango sells movie tickets, Hotwire and STA deal with travel bookings, and Zappos and Overstock are both online retailers with a large scope (Overstock sells DVDs, for example). The suit also names the California Computer Crime Law and the Electronic Communications Privacy Act as grounds for the suit.
One of the plaintiffs, Sean Lane of Waltham, Mass., was immortalized in a Washington Post story about Beacon: He's the guy who bought his wife a diamond ring on Overstock.com, only to have her spot the purchase in a Facebook news feed, spoiling the surprise.
Guess he's still irritated.
You'd think the parent company of $1,500 Louis Vuitton handbags would be able to tolerate a few fakes on eBay. Not so.
And a French court agreed on Monday, ordering the online auction giant to pay $61 million (38.6 million euros) to luxury goods powerhouse LVMH, according to Reuters. LVMH, along with other luxury-brand groups like Tiffany & Co. and Hermes, has claimed that eBay isn't strict enough about policing the sale of counterfeit goods on its site.
eBay promptly appealed the court decision, saying that LVMH was simply trying to crack down on competition; eBay makes money off any LVMH goods sold on its site, real or fake, whereas LVMH itself does not.
LVMH has an impressive portfolio containing a whole lot of brands that Kanye West has probably name-dropped in multiple songs, like Louis Vuitton, Acqua di Parma, Thomas Pink, Dior, Givenchy, Moet & Chandon, De Beers, and Marc Jacobs.
Monday's ruling encompassed a number of individual cases brought by LVMH brands like Dior Couture, Guerlain, Givenchy, and Kenzo. The 38.6 million euros awarded fell short of the 50 million euros that the luxury goods house had claimed in damages.
Scandal fans, rejoice--the crimson-hued nastiness between ConnectU and Facebook ain't over yet!
Court documents filed on Wednesday reveal that the founders of ConnectU, who claim that Facebook czar Mark Zuckerberg pilfered their business plan and code, are touting new "smoking-gun" evidence against the 24-year-old billionaire.
Facebook settled ConnectU v. Facebook in April, but ConnectU founders Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra say a search for related documents has produced some results.
Forensic expert Jeff Parmet was commissioned by ConnectU to trawl through Facebook hard drives after a court order opened them up for discovery in September.
Under an agreement that he would not discuss anything with ConnectU except developer code, Parmet produced a collection of documents to Massachusetts district court judge Douglas P. Woodlock that included the aforementioned instant-messaging logs.
But Woodlock's response was one of skepticism, especially considering that ConnectU had already signed the paperwork to settle the longstanding lawsuit. The three founders, who attended Harvard University alongside Zuckerberg, have been engaged in legal action against Facebook since 2004.
Documents filed Monday reveal that ConnectU also hired a new lawyer, D. Michael Underhill of the Washington, D.C.-based law firm Boies, Schiller & Flexner. The settlement is set to be approved June 23 in a court in San Jose, Calif., which is dealing with Facebook's countersuit against ConnectU that alleged its founders hacked Facebook's code to mine its member directory.
Facebook representatives could not immediately be reached for comment.
A Los Angeles-based law firm with a history of targeting online media companies for click fraud filed suit Tuesday against Citysearch, the directory site owned by IAC/InterActiveCorp, as well as Ticketmaster, the ticketing site that IAC is attempting to spin out into a separate publicly traded company.
"Citysearch.com is defrauding its advertising customers of millions of dollars by not only turning a blind eye to click fraud, but in fact encouraging it as well," a statement from the firm Kabateck Brown Kellner read. The class action suit encompasses anyone in the U.S. who paid for pay-per-click advertising space on Citysearch, but the named plaintiff is Tom Lambotte, who purchased ad space on Citysearch and then claimed that the number of clicks on his ads rose suspiciously.
Representatives from IAC and Citysearch were not immediately available for comment.
According to the complaint, filed in a California court, Lambotte first purchased Citysearch ads in late 2007, didn't see a gain in traffic to his site, and attempted to cancel his ad account. The cancellation process dragged out, he said, and in the meantime his ad clicks started to escalate suspiciously. He speculated that click fraud--in which clicks to ads are meant only to drive up the rate the advertiser pays and not to purchase the product--was at play.
Claims in click fraud lawsuits are sometimes questionable, and Kabateck Brown Kellner has extensive experience in the field that could raise a red flag: the plaintiff-only firm has won against both Yahoo and Google, and attorney Brian Kabateck recently went after Google's AdWords advertising program, claiming that it deceived customers.
Consequently, a suit against yet another (smaller) player in the search market could come across as an attempt to just filch more cash from big dot-coms. Or, as the suit goes forward, Lambotte's claims, as represented by Kabateck, could show a legitimate foundation.
Search companies, meanwhile, announced a coalition against click fraud nearly two years ago in conjunction with the Interactive Advertising Bureau (IAB) and Media Rating Council.
In a tiff over its 28.4 percent share in Craigslist, auction giant eBay has filed suit against the online classifieds site in a Delaware court of chancery. According to Reuters, eBay has accused Craigslist's board of directors of diluting its share.
The court confirmed that eBay filed its complaint Tuesday afternoon but could not provide further details, because the suit was filed under seal.
In a phone conversation, Craigslist founder Craig Newmark said, "We're still trying to digest it," and recommended contacting CEO Jim Buckmaster for further comment. Buckmaster did not immediately reply to an e-mail inquiry.
Newmark, Buckmaster, and the Craigslist company are reportedly named as defendants in the suit, the Reuters article asserts.
As if troubled movie rental company Blockbuster didn't have enough to deal with already: an angry Facebook user has taken issue with its participation in the social network's controversial Beacon advertising program, and is pursuing legal action.
Cathryn Elaine Harris, a Texas resident, filed a complaint in the U.S. District Court for eastern Texas on April 9, claiming that it's a violation of a federal statute for Blockbuster to participate in Beacon, which shares rental history on Facebook members' "news feeds" unless they manually opt out. She is seeking class-action status, hoping to eventually net $2,500 for each infringement.
Don't want anyone to know you rented this cinematic gem? One lawsuit in Texas says it feels your pain.
(Credit: New Line Cinema)Facebook is not included in the lawsuit.
In the suit, Harris claims that Blockbuster's sharing of her movie rental history through Beacon is in direct conflict with the Videotape Privacy Protection Act. The law was passed during the viciously contested nomination of judge Robert Bork to the U.S. Supreme Court in 1987, in the midst of which writer Michael Dolan went to a video store that Bork frequented and obtained a list of 146 videotapes his family had checked out.
Then Dolan reported on the not particularly scandalous list--no Debbie Does Dallas to be found--in an article in the Washington, D.C.-area City Paper. An analog-age privacy debate ensued, and the VPPA was passed in 1988.
Now, the Bork-era law has taken on a digital dimension: Harris vs. Blockbuster, addressing Facebook's "social advertising" program. The social network unveiled the Beacon ads in November, drawing criticism from activist groups like MoveOn.org for privacy violations until it modified the interface to allow for more user control.
A Blockbuster representative told MediaPost that adequate privacy protections are in place and that Blockbuster's legal team will "vigorously defend the company in this litigation."
Correction, Sept. 23, 2009: Michael Dolan has clarified that while he obtained and reported on Robert Bork's household's video rental history, he did not actually publish the list.
