America Online, Inc. v. IMS

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America Online v. IMS
Virginia-eastern.gif
Court United States District Court for the Eastern District of Virginia
Full case nameAmerica Online, Inc. v. IMS, et al.
DecidedOctober 29th, 1998
DefendantIMS et al.
ProsecutionAmerica Online, Inc.
Citation(s)24 F. Supp. 2d 548
Holding
The undisputed facts indicated that defendant committed a trespass to chattels against AOL's computer network, falsely designated the origin of his products and diluted AOL's trademark and service mark in violation of the Lanham Act. Therefore, summary judgment was granted.
Court membership
Judge(s) sitting Leonie M. Brinkema
Keywords
trespass to chattels, spamming, trademark infringement, trademark dilution

America Online, Inc. v. IMS, 24 F. Supp. 2d 548 (E.D. Va. 1998) was one of a series of legal battles America Online (hereafter "AOL") launched against junk e-mail (aka "spam" or "Email spam"). In this case, the court held that defendants' unauthorized mailing of unsolicited bulk e-mail constituted a trespass to chattels under Virginia state law. [1]

Contents

Besides, many of defendant's junk e-mail contained the letters "aol.com" in their headers, thereby creating a false designation. AOL subscribers were deceived into believing that AOL sponsored or approved of defendant’s bulk e-mailing activities. This caused damage to AOL. Therefore, the court ruled that defendants were in violation of the Lanham Act for false designation of origin. [1]

The court also found that the defendant diluted AOL's trademark and service mark in violation of Lanham Act. The court recognized that AOL owned the famous "AOL" mark and defendants' conducts had tarnished AOL's mark because AOL members made negative associations between AOL and defendants' junk e-mail practices. [1]

Background

AOL is one of the largest online service providers in the United States who had 10 million members at the time when this lawsuit was filed. Spammers kept targeting AOL members because they tended to be newer to the internet and more receptive to junk e-mail. Besides, their e-mail addresses were readily available by either plucking them off the service themselves, or buying one of the many lists of AOL members being sold. Junk e-mail senders found that it cost them nearly nothing to make money through spamming. All they needed was a handful of responses that the AOL members might make. As a result, AOL members who spent some time in AOL's chat rooms quickly found their e-mail boxes flooded with junk e-mail advertising, everything from get-rich-quick schemes to links to pornographic pages. [2]

While AOL had filters in place in an attempt to stop spam from reaching its members, spammers found some techniques to bypass those filters. [2] Since technical measures could not efficiently protect AOL from spammers, AOL then tried to combat the increased flood of spam with the help of the court system. [3] In the late 1997 and early 1998, AOL filed a series of lawsuits against a dozen of spammers, including Over The Air Equipment [3] , IMS [2] , Squeaky Clean Marketing and Cyber Services [3] , Prime Data Worldnet Systems [4] [5] , LCGM Incorporated [6] , Web Promo Incorporated [6] , and so on [7] .

Facts

Defendant Joseph J. Melle, Jr. ("Melle") is the creator and operator of defendants TSF Marketing and TSF Industries (collectively "TSF"). AOL alleged that Melle sent over 60 million e-mail messages over the course of 10 months to AOL subscribers. After being notified in writing by AOL to cease and desist, Melle continued his practice of sending unauthorized bulk e-mail. His activities caused AOL to spend technical resources and staff time to "defend" its computer system and its membership against this spam. In addition, Melle's messages damaged AOL's goodwill among its members. More than 50,000 members lodged complaints to AOL against Melle's junk e-mail. [1]

AOL sued six defendants, including IMS, Gulf Coast Marketing, TSF Marketing and TSF Industries, Melle, etc. [2] , under five causes of action. They are 1) false designation of origin under the Lanham Act; 2) dilution of interest in trademarks and service marks under the Lanham Act; 3) violation of the Computer Fraud and Abuse Act; 4) violation of the Virginia Computer Crimes Act; and 5) trespass to chattels under Virginia Common Law respectively. Of the six defendants, only Melle filed an answer to the complaint, and the Court found the other defendants to be in default. [1]

Court's Opinion

Trespass to Chattels under Virginia Common Law

The court held that Melle committed a trespass to chattels in violation of Virginia Common Law. [1] It followed a precedent, CompuServe Inc. v. Cyber Promotions, Inc. , 962 F. Supp. 1015 (S.D. Ohio 1997), established by the United States District Court for the Southern District of Ohio. In that case, the defendant sent unsolicited e-mail advertisement to hundreds of thousands of Compuserve's subscribers. In addition, defendant concealed the origin of its messages by forging header information. And this cost Compuserve time and money and burdened its equipment. Compuserve received complaints from subscribers and the defendant, Cyber Promotion, did not stop sending message even after it was notified that the bulk e-mails was unauthorized. The court thus held Cyber Promotions liable for trespass to chattels. [8]

The United States District Court for the Eastern District of Virginia found that the facts of Compuserve were "strikingly" similar to AOL v. IMS. Furthermore, because the trespass law of Virginia was very close to that of Ohio, the court decided to rely on the reasoning of Compuserve. [1] In this case, defendant Melle intentionally sent bulk e-mail messages to AOL's subscribers without authorization. This conduct severely injured AOL's business goodwill and diminished the value of AOL's interest in its network. Therefore, there was no factual disputes as to whether Melle committed a trespass to chattels against AOL's computer network. As a result, AOL was entitled to summary judgment on this count. [1]

False Designation of Origin under the Lanham Act

The court held that Melle falsely designated the origin of his products in violation of the Lanham Act. According to 15 U.S.C.   § 1125(a)(1), in order to establish a false-designation violation under the Lanham Act, the plaintiff must show: (1) the alleged violator must employ a false designation; (2) the false designation must deceive as to origin, ownership or sponsorship; and (3) the plaintiff must believe that "he or she is or is likely to be damaged by such an act." [1]

In this case, most of Melle’s e-mail included the letters “aol.com” in their headers, thereby creating a false designation. Any recipient could reasonably infer that an e-mail containing the initial "aol.com" in the header would originate from AOL. Moreover, AOL members were deceived into thinking that AOL sponsored or approved of Melle’s bulk e-mailing activities. Further, Evidence showed that Melle’s false designation caused damage to AOL. Accordingly, AOL was entitled to summary judgment on this count. [1]

Dilution of Trade and Service Mark under the Lanham Act

The court held that Melle diluted AOL’s trademark and service mark in violation of the Lanham Act. According to 15 U.S.C.   § 1125(c), a dilution claim is established by showing that the plaintiff owns a distinctive famous mark and a likelihood of dilution exists either from blurring or from tarnishment. In this case, AOL obviously owned the distinctive "AOL" mark and the mark was used and recognized throughout the world in association with AOL's online products and services. Furthermore, records showed that Melle's conduct had tarnished AOL's mark. AOL received more than 10,000 complaints a day regarding spam generally and 50,000 complaints aimed at Melle's spamming. Therefore, AOL was entitled to summary judgment on this count. [1]

Damages and other relief awarded by the Court

The court granted permanent injunctions in favor of the AOL and against the defendants named in the complaint. The court also awarded actual, compensatory and punitive damages. But, the court declined to grant attorneys fees or costs of the case to AOL.

Further Development

Generally, courts were sympathetic to AOL and other online service providers' effort to fight against spam. They usually found in favor of AOL and other online service providers on their trespass to chattels claim, false designation of origin claim and dilution claim. [3] [9] Courts believed that AOL's efforts to block junk email, including its efforts to obtain a court order against mass e-mailers, were in the public interest. [4]

However, AOL's victories over spammers were not so decisive. On the one hand, there were some courts who did not buy the trespass to chattels theory in cyberspace. [9] On the other hand, even if courts ruled in favor of AOL at most times, the problem was that even as some junk emailers were kicked out of the game, others would jump into the business very soon, because there were few barriers to entry. Spammers tended to jump from one network to the next after violating the almost ubiquitous antispam rules. The war between online service providers and spammers will probably continue for quite a while. [6] And there were several battles launched by online service providers against spammers following America Online v. IMS. [10] [11] [12] [13] [14]

In the academic community, there were also heated debate on whether courts should apply the century-old doctrine of trespass to chattels to the Internet in order to save online service providers from junk e-mail. [9] [15] [16] [17] [18]

Related Research Articles

<span class="mw-page-title-main">Spamming</span> Unsolicited electronic messages, especially advertisements

Spamming is the use of messaging systems to send multiple unsolicited messages (spam) to large numbers of recipients for the purpose of commercial advertising, for the purpose of non-commercial proselytizing, for any prohibited purpose, or simply repeatedly sending the same message to the same user. While the most widely recognized form of spam is email spam, the term is applied to similar abuses in other media: instant messaging spam, Usenet newsgroup spam, Web search engine spam, spam in blogs, wiki spam, online classified ads spam, mobile phone messaging spam, Internet forum spam, junk fax transmissions, social spam, spam mobile apps, television advertising and file sharing spam. It is named after Spam, a luncheon meat, by way of a Monty Python sketch about a restaurant that has Spam in almost every dish in which Vikings annoyingly sing "Spam" repeatedly.

Trespass is an area of tort law broadly divided into three groups: trespass to the person, trespass to chattels, and trespass to land.

<span class="mw-page-title-main">CAN-SPAM Act of 2003</span> American law to regulate bulk e-mail

The Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) Act of 2003 is a law passed in 2003 establishing the United States' first national standards for the sending of commercial e-mail. The law requires the Federal Trade Commission (FTC) to enforce its provisions. Introduced by Republican Conrad Burns, the act passed both the House and Senate during the 108th United States Congress and was signed into law by President George W. Bush in December 2003.

<span class="mw-page-title-main">Mobile phone spam</span> Unwanted communication through a mobile phone

Mobile phone spam is a form of spam, directed at the text messaging or other communications services of mobile phones or smartphones. As the popularity of mobile phones surged in the early 2000s, frequent users of text messaging began to see an increase in the number of unsolicited commercial advertisements being sent to their telephones through text messaging. This can be particularly annoying for the recipient because, unlike in email, some recipients may be charged a fee for every message received, including spam. Mobile phone spam is generally less pervasive than email spam, where in 2010 around 90% of email is spam. The amount of mobile spam varies widely from region to region. In North America, mobile spam steadily increased after 2008 and accounted for half of all mobile phone traffic by 2019. In parts of Asia up to 30% of messages were spam in 2012.

<span class="mw-page-title-main">Email spam</span> Unsolicited electronic advertising by e-mail

Email spam, also referred to as junk email, spam mail, or simply spam, is unsolicited messages sent in bulk by email (spamming). The name comes from a Monty Python sketch in which the name of the canned pork product Spam is ubiquitous, unavoidable, and repetitive. Email spam has steadily grown since the early 1990s, and by 2014 was estimated to account for around 90% of total email traffic.

Sanford 'Spamford' Wallace is an Internet spammer. He initially sent junk faxes before coming to notoriety in 1997, promoting himself as the original "Spam King". Wallace's prolific spamming has resulted in encounters with the United States government, anti-spam activists, and large corporations such as Facebook and MySpace.

This article addresses torts in United States law. As such, it covers primarily common law. Moreover, it provides general rules, as individual states all have separate civil codes. There are three general categories of torts: intentional torts, negligence, and strict liability torts.

Trespass to chattels is a tort whereby the infringing party has intentionally interfered with another person's lawful possession of a chattel. The interference can be any physical contact with the chattel in a quantifiable way, or any dispossession of the chattel. As opposed to the greater wrong of conversion, trespass to chattels is argued to be actionable per se.

<span class="mw-page-title-main">Jeremy Jaynes</span>

Jeremy Jaynes is an American entrepreneur and business consultant. Jaynes is best known for some of his earliest online ventures in 2004, that involved the act of e-mail spamming, broadcasting junk e-mail from his home in North Carolina, United States. Jaynes and his business partner, his sister Jessica DeGroot, were the first people in the world to be charged with "felony spam", i.e., sending spam without allegation of any accompanying illegal conduct such as theft, fraud, trespass, defamation, or obscenity.

Web scraping, web harvesting, or web data extraction is data scraping used for extracting data from websites. Web scraping software may directly access the World Wide Web using the Hypertext Transfer Protocol or a web browser. While web scraping can be done manually by a software user, the term typically refers to automated processes implemented using a bot or web crawler. It is a form of copying in which specific data is gathered and copied from the web, typically into a central local database or spreadsheet, for later retrieval or analysis.

Randall Boe is the former General Counsel for AOL and has been involved in several cases regarding internet law. He was named the commissioner of the Arena Football League in March 2018.

The history of email spam reaches back to the mid-1990s when commercial use of the internet first became possible - and marketers and publicists began to test what was possible.

In online advertising, contact scraping is the practice of obtaining access to a customer's e-mail account in order to retrieve contact information that is then used for marketing purposes.

<i>EBay v. Bidders Edge</i> Leading case

eBay v. Bidder's Edge, 100 F. Supp. 2d 1058, was a leading case applying the trespass to chattels doctrine to online activities. In 2000, eBay, an online auction company, successfully used the 'trespass to chattels' theory to obtain a preliminary injunction preventing Bidder's Edge, an auction data aggregator, from using a 'crawler' to gather data from eBay's website. The opinion was a leading case applying 'trespass to chattels' to online activities, although its analysis has been criticized in more recent jurisprudence.

<i>United States v. Kilbride</i>

United States v. Kilbride, 584 F.3d 1240 is a case from the United States Court of Appeals for the Ninth Circuit rejecting an appeal from two individuals convicted of violating the Can Spam Act and United States obscenity law. The defendants were appealing convictions on 8 counts from the District Court of Arizona for distributing pornographic spam via email. The second count which the defendants were found guilty of involved the falsification of the "From" field of email headers, which is illegal to do multiple times in commercial settings under 18 USC § 1037(a)(3). The case is particularly notable because of the majority opinion on obscenity, in which Judge Fletcher writes an argument endorsing the use of a national community obscenity standard for the internet.

<i>CompuServe Inc. v. Cyber Promotions, Inc.</i>

CompuServe Inc. v. Cyber Promotions, Inc. was a ruling by the United States District Court for the Southern District of Ohio in 1997 that set an early precedent for granting online service providers the right to prevent commercial enterprises from sending unsolicited email advertising – also known as spam – to its subscribers. It was one of the first cases to apply United States tort law to restrict spamming on computer networks. The court held that Cyber Promotions' intentional use of CompuServe's proprietary servers to send unsolicited email was an actionable trespass to chattels and granted a preliminary injunction preventing the spammer from sending unsolicited advertisements to any email address maintained by CompuServe.

<i>School of Visual Arts v. Kuprewicz</i>

School of Visual Arts v. Diane Kuprewicz, 771 N.Y.S.2d 804 (2003), is a New York Supreme Court case in which it was held that sending and/or directing "large volumes of unsolicited job applications and pornographic e-mails" by defendant to plaintiff if it depletes hard disk space, drains processing power, and negatively impacts other system resources of the plaintiff is sufficient to establish "a cause of action for trespass to chattels." The ruling has been followed and cited in a number of cases in different jurisdictions.

<span class="mw-page-title-main">Microsoft Digital Crimes Unit</span>

The Microsoft Digital Crimes Unit (DCU) is a Microsoft sponsored team of international legal and internet security experts employing the latest tools and technologies to stop or interfere with cyber crime and cyber threats. The Microsoft Digital Crimes Unit was assembled in 2008. In 2013, a Cybercrime center for the DCU was opened in Redmond, Washington. There are about 100 members of the DCU stationed just in Redmond, Washington at the original Cybercrime Center. Members of the DCU include lawyers, data scientists, investigators, forensic analysts, and engineers. The DCU has international offices located in major cities such as: Beijing, Berlin, Bogota, Delhi, Dublin, Hong Kong, Sydney, and Washington, D.C. The DCU's main focuses are child protection, copyright infringement and malware crimes. The DCU must work closely with law enforcement to ensure the perpetrators are punished to the full extent of the law. The DCU has taken down many major botnets such as the Citadel, Rustock, and Zeus. Around the world malware has cost users about $113 billion and the DCU's jobs is to shut them down in accordance with the law.

<i>Omega World Travel, Inc. v. Mummagraphics, Inc.</i>

Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348, is a case in the United States Court of Appeals for the Fourth Circuit in which Mummagraphics, Inc. is sued by Omega World Travel, Inc. (Omega) and Cruise.com after Mummagraphic alleged that they received 11 commercial e-mail messages in violation of the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003 as well as Oklahoma state law. In the initial filing, the United States District Court for the Eastern District of Virginia had awarded summary judgment to Omega on all of Mummagraphics' claims finding that the commercial emails from Omega did not violate the CAN-SPAM Act, and that the CAN-SPAM Act preempted Oklahoma state law. The Court of Appeals affirmed.

References

  1. 1 2 3 4 5 6 7 8 9 10 11 America Online v. IMS, 24F. Supp. 2d549 (E.D.Va.1998).
  2. 1 2 3 4 Kornblum, Janet (1998), AOL sues more spammers, CNET News, retrieved February 28, 2014
  3. 1 2 3 4 Pelline, Jeff (1997), AOL wins latest spam battle, CNET News, retrieved February 28, 2014
  4. 1 2 Luening, Erich (1997), Judge backs AOL antispam efforts, CNET News, retrieved February 28, 2014
  5. ↑ Kornblum, Janet (1997), AOL sues junk emailer, CNET News, retrieved February 28, 2014
  6. 1 2 3 Kornblum, Janet (1998), AOL sues porn spammers, CNET News, retrieved February 28, 2014
  7. ↑ Hu, Jim (1998), AOL throws the book at spammers, CNET News, retrieved February 28, 2014
  8. ↑ CompuServe Inc. v. Cyber Promotions, Inc. , 962F. Supp.1015 (S.D.Ohio1997).
  9. 1 2 3 Sinrod, Eric (2007), A cyberspace update for hoary legal doctrine, Duane Morris LLP: CNET News, retrieved April 4, 2014
  10. ↑ Krigel, Beth (1998), Hotmail sues spammers, CNET, retrieved February 28, 2014
  11. ↑ McGuire, David (2004), "AOL, E-Mail Companies Sue Spammers", Washington Post, retrieved February 28, 2014
  12. ↑ Gross, Grant (2004), AOL, Earthlink Sue Spammers, PC World, retrieved February 28, 2014
  13. ↑ Gross, Grant (2004), Major ISPs Team Up to Sue Spammers, PC World, retrieved February 28, 2014
  14. ↑ Orlando (2004), AOL sues Florida company accused of helping spammers, The Associated Press, retrieved February 28, 2014
  15. ↑ Balganesh, Shyamkrishna (2006), Common Law Property Metaphors on the Internet: The Real Problem with the Doctrine of Cybertrespass, Penn Law: Legal Scholarship Repository, p. 265, retrieved February 28, 2014
  16. ↑ Burk, Dan (2000), The Trouble With Trespass, 4 J. Small & Emerging Bus. L., p. 27, SSRN   223513
  17. ↑ Hardy, Trotter (1996), The Ancient Doctrine of Trespass to Web Sites, William & Mary Law School Scholarship Repository, p. 1, retrieved February 28, 2014
  18. ↑ Samuelson, Pamela (2003), Unsolicited Communications as Trespass? (PDF), COMMUNICATIONS OF THE ACM, p. 15, retrieved February 28, 2014
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