An e-mail was sent on Thursday to Facebook users who were members at the time that its controversial, now-defunct Beacon advertising program was operated: it's the official notice about the proposed settlement for the class-action lawsuit against Beacon. The terms of the settlement have been public since September, but the court-ordered summary notice is the last step in the process before final approval on February 26.
"This is not a settlement in which class members file claims to receive compensation," the notice explained (possibly crushing the hopes of any Facebook members who might have got excited that this would be an easy way to make some pizza money). "Under the proposed settlement, Facebook will terminate the Beacon program. In addition, Facebook will provide $9.5 million to establish an independent nonprofit foundation that will identify and fund projects and initiatives that promote the cause of online privacy, safety, and security."
A Web site has been set up to explain the terms of the settlement for the case Lane et al. vs. Facebook Inc. et al., which was originally filed last summer.
Beacon, an advertising program that shared members' activity on participating third-party sites on their Facebook profiles without much warning or notification, was a much-hyped part of the Facebook Ads initiative that debuted in the fall of 2007. But it was, unfortunately for Facebook, a complete public relations disaster.
Pressure from privacy and activist groups resulted in notable changes to the product and member controls thereof, but image repair proved to not be enough and Facebook let Beacon fade to black.
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.
Updated at 5:10 p.m. PDT with eBay comment.
Joltid, a peer-to-peer software company established by Skype's founders, filed a copyright suit against Skype Wednesday alleging Joltid's technology is being infringed on by Skype users "in the United States at least 100,000 times each day."
Just the latest in an ongoing license dispute between the popular VoIP service and its developers, the lawsuit, filed in Northern California U.S. District Court, seeks an injunction and damages, which Joltid "reasonably believes are amassing at a rate of $75 million daily," according to the suit.
Also listed as defendants are Skype's current owner eBay, as well as investors in a consortium that earlier this month signed a deal with eBay to acquire a 65 percent stake in Skype, with eBay retaining 35 percent.
"Skype has infringed Joltid's copyrights," a company spokesman said in a statement. "Joltid will vigorously enforce its copyrights and other intellectual property rights in all of the technologies it has innovated."
"Their allegations and claims are without merit and are founded on fundamental legal and factual errors," eBay spokesman John Pluhowski said in a statement.
The lawsuit has the potential to at least complicate the ongoing sale of Skype. In the past, however, eBay has said it's working on its own software to replace what it gets from Joltid.
In 2006, eBay bought Skype for $2.6 billion, but co-founders Janus Friis and Niklas Zennstrom retained the rights to Skype's key peer-to-peer technology--Global Index Software--via the Joltid company they formed.
Joltid terminated its license for the software after learning that Skype had allegedly acquired unauthorized versions of the source code, made unauthorized modifications, and disclosed the software to third persons, according to the lawsuit.
The two companies have been involved in a separate lawsuit in the U.K. over that license termination, but the case isn't set to go to trial until June 2010. Referring to that suit, eBay's SEC filing regarding the sale of Skype says "consummation of the deal was subject to 'no settlement of the pending litigation with Joltid Limited having been effected without the consent of the Buyer (subject to certain limitations).'"
The other defendants in the suit filed Wednesday are Silver Lake Partners, Index Ventures Management, Michaelangelo Volpi, Andreessen Horowitz, and the Canada Pension Plan Investment Board. This lawsuit was first reported Wednesday by The Wall Street Journal.
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.
A Dutch court has ruled in favor of antipiracy foundation BREIN, giving three of The Pirate Bay's co-founders 10 days to block traffic to and from the Netherlands, effectively revoking access to its residents.
According to blog TorrentFreak, the suit goes against The Pirate Bay founders Fredrik Neij, Peter Sunde, and Gottfrid Svartholm Warg, all of whom were reportedly not even aware of the case. As a response they sent back a letter to the court to get it dismissed, and are currently seeking an appeal with legal representation.
The ruling, which took place on Thursday, will put a hefty 3 million euro fine on the three if they choose not to comply, along with a 30,000 euro ($42,227) per day fine if access is still not shut off after that 10 days.
Back in mid-April, the three, along with Carl Lundstrom, who had been financing The Pirate Bay's operations, were found guilty by a Swedish court helping users commit copyright infringement. The four were ordered to pay $3.6 million in damages and serve a year in prison. Also, on Wednesday, the Motion Picture Association of America filed legal papers in a Swedish court saying that even after the April ruling, Neij, Svartholm Warg, and Pirate Bay spokesperson Peter Sunde Kolmisoppi continue to help people commit copyright infringement--a claim which Kolmisoppi and co. have vehemently denied.
Things have also become complicated with the potential sale of the site. Swedish company Global Gaming Factory announced plans to buy The Pirate Bay for a reported $7.8 million last month, although the latest negotiations have fizzled.
Microsoft is bringing out the big guns to combat instant message spam and phishing attacks done to users of its Live Messenger network. The Redmond, Wash.-based software giant filed a civil lawsuit Thursday in King County Superior Court in Seattle against Funmobile, Mobilefunster, and several individuals, who Microsoft says is responsible for the intentional misuse of the service to gain the personal information of its users.
In the suit (which is embedded below), Microsoft cites a multitude of attacks including IMs that appear to be coming from users they know, as well as phishing attacks that mimic the look and feel of an outside service, or an official Microsoft support page.
Microsoft says that the successful use of these tactics has let third parties obtain these users' personal account information, then exploit it by sending mass spam and phishing messages to the contacts of users whose accounts have been breached.
In a post on Microsoft's security blog Microsoft on the Issues, Tim Cranton who is Microsoft's associate general counsel of Internet safety enforcement, said the company hopes the suit will accomplish three things. One is to stop companies and individuals from continuing the attacks through injunction. Microsoft also intends to "recover monetary damages," as well as send a message to other parties who would try similar tactics.
Microsoft counts the number of its Windows Live Messenger users at more than 320 million, although the suit makes no mention of how many of those users have been affected by the privacy attacks. However, it does say that the attacks have put a strain on the servers that run the service, as well as its security teams, which have to monitor and combat incoming attacks. In the meantime, the company is urging users of its Live Messenger service and other Live services not to give other people their log-in information.
Microsoft Corporation v. Funmobile, et. al." case number 09-2-21247-3
Google has been sued again by a company mad over the use of its trademarks as keywords, but this one comes with a twist.
Ascentive, the company behind those incessant "Finally Fast!" PC support ads, became the latest Google advertiser to sue the company for allowing advertisers to purchase ads using trademarks they do not own as search keywords. It will have to get in line behind Firepond, Rescuecom and several other companies challenging Google's policy, recently expanded to allow some companies to use trademarks they don't own in the text of their ads.
Ascentive takes its suit a step farther, however, also claiming that Google has unfairly removed some of Ascentive's Web sites from its search index. Ascentive's Finallyfast.com Web site and related software are designed to examine your computer for registry errors and spyware that are ostensibly slowing its performance, and the company has battled with StopBadware.org this year over whether its products should be considered a scam for its dire warnings about benign security threats on your computer that lead to an upsell pitch for Ascentive's services.
According to Ascentive, Google dropped it from search results following two warnings from StopBadware.org about its products. Still, even after StopBadware.org removed their warnings about Ascentive's products following some changes, a search for "finally fast" on Google does not return any Ascentive Web site. That search does, however, return a result for a company called "Finallyfast.us" which appears to offer a very similar product but does not appear to have any relationship with Ascentive.
Google declined to comment "on the individual reasons pages may be removed." Eric Goldman, a professor at Santa Clara University who tracks legal issues involving Internet law, doesn't think Ascentive's claims regarding the search results will get very far, according to his blog. "Indeed, as exciting as it would be to see some meaty discussion on the topic of Google's liability (or lack thereof) for deciding who gets into its search index, I'm guessing Google will beat this prong of the complaint quickly and completely," he wrote.
As far as the trademark part of the suit, Google had this to say:
"It's completely normal for a supermarket to stock different brands of cereal on the same shelf or for a magazine to run Ford ads opposite of an article about Toyota, so it doesn't make sense to limit competition online by restricting the number of choices available to users. Just as it's reasonable to expect a range of brands on any shelf in a grocery store, providing users on Google with more than one option when they search for a brand name or other trademark helps them to find the best product at the lowest price."
This post was updated at 5:53 p.m. PDT with details about an extension request of the May 5 deadline filed by seven authors.
Google said Monday it's seeking 60 more days to find authors and persuade them of what it believes are the merits of a settlement involving its online Book Search service.
The proposed settlement of the 2005 case filed by the Authors Guild and the American Association of Publishers involves Google's right to show information from books online--in particular "orphan" works that are still covered in copyright but that are in limbo, for example being out of print or written by authors who can't be located. Currently, authors must respond by a May 5 deadline to opt out, otherwise authors will be included in the settlement.
"The settlement is highly detailed, and we want to make sure rightsholders everywhere have enough time to think about it and make sure it's right for them. That's why we've asked the court for permission to extend the opt-out deadline for an extra 60 days," said Alexander Macgillivray, Google's associate general counsel for products and intellectual property, in a blog post Monday.
"It's pretty easy for credit card companies to contact their cardholders--they send bills to them all the time. The world's authors, publishers and their heirs are much more difficult to find," Macgillivray said. "So, as the New York Times recently reported, the plaintiffs hired notice campaign specialists Kinsella Media Group to tell them about this exciting settlement, and Google has devoted millions of dollars to fund this notice campaign. Kinsella started by launching a website for authors and publishers and a direct-mail effort. Beginning in January, Kinsella published ads in newspapers and other publications all over the world from Fiji to the Cook Islands to Greenland. And of course, they also placed ads right here at home in the U.S., in publications as diverse as Writer's Digest and USA Today."
Google is facing resistance to the settlement.
Seven authors last week requested a four-month extension (PDF) of the May 5 deadline due to the complexity of the proposed settlement, among other reasons.
"First, two months' time is insufficient to understand the implications of a settlement of this scope," the appeal letter reads. "Second, substantial defects in notice of the settlement undermine authors' ability to assess their rights; and third, more time is required simply to understand the complex terms of the agreement."
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.
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.
