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OPTINREALBIG.COM, LLC v. IRONPORT SYSTEMS

June 25, 2004.

OPTINREALBIG.COM, LLC, Plaintiff,
v.
IRONPORT SYSTEMS, INC. and its wholly owned subsidiary, SPAMCOP.NET, INC., Defendants.



The opinion of the court was delivered by: SAUNDRA ARMSTRONG, District Judge

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

This matter comes before the Court on the motion for a preliminary injunction filed by plaintiff OPTINREALBIG.COM, LLC ("OptIn") to enjoin certain activities of defendant SPAMCOP.NET, Inc. ("SpamCop") a wholly owned subsidiary of IronPort Systems, Inc. Having read and considered the arguments presented by the parties in their moving papers, and at the May 18, 2004 hearing, the Court hereby DENIES OptIn's motion for preliminary injunction.

I. ADMINISTRATIVE ISSUES

  During the May 18, 2004 hearing, the Court specifically requested a supplemental declaration from SpamCop that explained technical issues regarding how SpamCop's software functions. The Court did not request the same from OptIn. Nevertheless, OptIn took the liberty of submitting not only supplemental declarations to bolster its arguments, but a supplemental brief regarding issues related to the Communications Decency Act. Notably, OptIn's submissions were filed on May 25, 2004, a week after the Court held oral argument. Such uninvited submissions are inappropriate and violate the notions of fairness that underlie the judicial process. OptIn should be aware that future abuses of the judicial process may result in sanctions.

  The Court GRANTS SpamCop's motion to strike the supplemental brief and declarations. [Docket No. 53]. Lest there be any doubt, even if the Court had considered the supplemental filings, they would not change the Court's determination regarding OptIn's motion for a preliminary injunction or the Court's reading of the Communications Decency Act. The supplemental declarations and briefing are not persuasive and, in fact, at some points actually bolster SpamCop's position.

  II. BACKGROUND

  At the center of this case is a debate about bulk commercial e-mails, whether they are legitimately solicited or unsolicited mail known as SPAM, about those who make a living sending bulk commercial emails, about those who make a living trying to destroy spam senders, and about how these two business can coexist. Plaintiff in this case, OptIn, is in the business of sending bulk commercial e-mails. Defendant, SpamCop, is in the business of collecting complaints from recipients of alleged spam and forwarding these complaints to Internet Service Providers ("ISPs") who supply internet bandwidth to the purported spammers. OptIn alleges that SpamCop has inflated the complaints against OptIn, which has in turn caused ISPs to curtail the bandwidth they allow OptIn, which in turn affects OptIn's ability to send out e-mails it is contractually obligated to send.

  A. What is Spam

  Spam is "unsolicited e-mail, often of a commercial nature, sent indiscriminately to multiple mailing lists, individuals, or newsgroups; junk e-mail." American Heritage Dictionary of the English Language, (4th ed. 2000). As much as 80 percent of the e-mail received through the nation's largest ISP, America Online, is spam. (Newby Decl., Exh. F.1, Newsday, Junk Mail Joust (June 22, 2003)) AOL filters 2.4 billion spams a day. (Id.) According to one consulting firm, coping with spam will cost U.S. companies more than $10 billion this year in cash wasted. (Id.) According to another research group, around $2 of the typical monthly Internet service bill goes toward fighting spam. (Id.)

  A representative for Sonic.Net, an ISP, has complained that, "Spam consumes system resources such [as] disk storage space, processor cycles and bandwidth, which slows delivery of normal communications . . . and consumes, and in most cases wastes, the time and energy of network administrative personnel and users." (Cummins Decl. ¶ 4.) Mr. Cummins describes spam as a "pernicious problem for ISPs . . . [as it is] relatively inexpensive for the sender to send compared to the costs of printing and mailing paper advertisements, and yet imposes a heavy cost on ISPs and their customers who do not wish to receive spam." (Id.) These costs include "[f]iltering incoming mail, protecting network security and clearing spam from users' email inboxes [which,] takes a significant amount of time and resources, including the time and energy of [an ISP's] staff of system administrators and purchase or development of spam filtering software tools." (Id.)

  In response to these growing concerns regarding spam, in December 2003, Congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act of 2003. Pub.L. 108-187 (Dec. 16, 2003) ("CAN-SPAM Act" or "the Act"). It took effect in January 2004. In enacting CAN-SPAM, Congress found that:
The convenience and efficiency of electronic mail are threatened by the extremely rapid growth in the volume of unsolicited commercial electronic mail. Unsolicited commercial electronic mail is currently estimated to account for over half of all electronic mail traffic, up from an estimated 7 percent in 2001, and the volume continues to rise. Most of these messages are fraudulent or deceptive in one or more respects.
CAN-SPAM Act, Pub.L. 108-187, § 2(a)(2).

  Congress further found that "[t]he receipt of unsolicited commercial electronic mail may result in costs to recipients who cannot refuse to accept such mail and who incur costs for the storage of such mail, or for the time spent accessing, reviewing, and discarding such mail, or for both" and that spam "also decreases the convenience of electronic mail and creates a risk that wanted electronic mail messages, both commercial and noncommercial, will be lost, overlooked, or discarded amidst the larger volume of unwanted messages, thus reducing the reliability and usefulness of electronic mail to the recipient." CAN-SPAM Act, Pub.L. 108-187, § 2(a)(3)-(4).

  Accordingly, "[t]he growth in unsolicited commercial electronic mail imposes significant monetary costs on providers of Internet access services, businesses, and educational and nonprofit institutions that carry and receive such mail, as there is a finite volume of mail that such providers, businesses, and institutions can handle without further investment in infrastructure." CAN-SPAM Act, Pub.L. 108-187, § 2(a)(6).

  B. SpamCop SpamCop is an interactive Internet-based service whose mission is to reduce spam by reporting complaints to ISPs that provide Internet access to the senders of spam ("spammers"). (Haight Decl. ¶¶ 2-3). Whereas many anti-spam companies provide filtering services, which blocks an anti-spam customer from receiving spam, SpamCop goes one step further. It forwards complaints to ISPs to encourage ISPs to sanction spammers, including cutting off the spammers bandwidth (e.g. their access to the Internet). (Haight Decl. ¶¶ 4-6). SpamCop's founder, Julian Haight, has stated that he has helped close many spammers' e-mail accounts. (Piepmeir Decl., Exh. A, New York Times, To Protest Unwanted E-Mail, Spam Cop Goes to the Source (June 24, 1999)).

  1. How the SpamCop System Works

  SpamCop's registered users forward what they believe to be spam to SpamCop. SpamCop determines the ISPs from which the alleged spam was sent, including the ISPs supporting banner ads that accompanied the spam. (Haight Decl. ¶ 4.) Typically, spammers are able to disguise their identity by, for example, using fictitious e-mail addresses, or ones that are closed within a short time after mailing. CAN-SPAM Act, Pub.L. 108-187, § 2(a)(7). SpamCop addresses this issue by using a combination of Unix utilities (the utilities employed by most e-mail systems) to cross-check all the information in an e-mail header and find the e-mail address of the administrator on the network where the e-mail originated. (Haight Decl., Exh. A, SpamCop.net: What is this? How does it work? How do I Use it?).

  To find the originating ISP, SpamCop software breaks down the e-mail header into its component parts ("parsing"), and then runs a thorough search on the IP addresses to determine the originating network. (Haight Supp. Decl. ¶ 11.) A reported message may contain information in its headers indicating numerous potential sources. (Haight Supp. Decl. ¶ 12.) In some cases, the sender of bulk e-mails may send messages through multiple ISPs. (Id.) In those instances, SpamCop alleges that it is difficult to determine the exact originating ISP, and therefore, it forwards the complaint to all of the ISPs through which the message may have been sent. (Id.) Additionally, web site or banner advertisement links in the message may indicate the actual source that is responsible for the message. (Id.) For example, if a reported message contains a banner advertisement for "AcmeMortgages.com," it is possible that the entity that is ultimately responsible for the e-mail is AcmeMortgages.com. (Id.) In some circumstances, there are also red herring links to websites in a report message that the senders include in an apparent effort to make it difficult for recipients and software like SpamCop's to determine the true source of the message. (Id.)

  Once the IP addresses are parsed from the e-mails, SpamCop's system determines the address at an ISP to which the e-mail should be reported. (Haight Supp. Decl. ¶ 13.) SpamCop cross-checks the IP addresses in the message headers against numerous internal and online databases — including but not limited to SpamCop's internal database. (Id.) SpamCop uses a number of sources including default postmaster and abuse accounts maintained by the ISPs, a database maintained by Abuse.Net (an independent third party that tracks addresses at ISPs for the submission of e-mail abuse complaints), and routing information that SpamCop has gathered. (Id.) In addition, ISPs sometimes designate one or more individuals within their organization to whom complaints about spam may be directed. (Id.)

  SpamCop's registered users who report purported spam may add comments to the report. (Haight Decl. ¶ 4.) When SpamCop forwards the user's complaint, it does not add any comments or criticism of its own. Instead, it states: "This message is brief for your comfort. Please follow links for details." (Haight Supp. Decl. ¶ 14.) An ISP administrator who clicks on the links will be sent to a page on SpamCop's website. On that page SpamCop explains to ISPs that it has tracked the source of purported spam to the ISP. While it encourages the ISP to take action against the spammer, it also cautions, "Please be careful when taking action. It is possible (though unlikely) that the account is what we call `an innocent bystander.'" (Haight Decl., Exh. C, SpamCop.net: Introduction — What is this thing? How does it work?) SpamCop also states, "SpamCop administrators do not, and cannot verify the claims made by it's [sic] users. Not only are there simply far too many reports filed for anyone to manually review them, but even if it were to, there is no way for us to know whether a user actually did or did not solicit a message prior to reporting it as spam." (Id.) It also gives ISPs the option of not receiving these unsolicited reports.

  2. Removal of the Registered User's Names

  When it forwards the report to the ISPs, SpamCop removes the e-mail address of the registered user. (Haight Decl. ¶ 9.) Its purpose in doing so is to protect the privacy of the registered user. (Id.) SpamCop believes that if it did not remove the registered user's e-mail address, the registered user could be subjected to retaliatory actions, including hacking attacks or being flooded with spam. (Id.) Registered users also prefer that their names be removed. (Block Decl. ¶ 10.)

  SpamCop also admits, however, that it removes the names to preserve the efficacy of its business by preventing spammers form "list washing." (Id.) List washing is a process whereby spammers remove the very small percentage of people on their bulk lists that actually report spam. SpamCop believes that if spammers could target and selectively remove those persons reporting spam, they could evade detection and continue to send unsolicited bulk e-mail messages to other recipients. (Id.)

  C. OptIn

  OptIn states that it is not a spammer, but rather a sender of bulk commercial e-mails in compliance with federal laws. (Richter Decl. ¶ 2.) OptIn provides "opt-outs" on e-mails it sends, and it sends e-mails only to those Internet users who have directly opted-in, or indirectly opted-in by visiting a particular website. (Id.) OptIn contracts with ISPs to provide OptIn bandwidth so that it may meet its contractual terms to send e-mail advertisements on behalf of OptIn and its customers. (Richter Decl. ¶ 3.) It needs a great deal of bandwidth because it sends "millions" of e-mails each day. (Richter Decl. ¶ 2.)

  OptIn is, however, the target of parallel suits by the Attorney General's Office of the State of New York and Microsoft Corporation for sending what these two plaintiffs describes as spam. (Newby Decl., Exh. C.) OptIn's founder, Scott Richter, has been described in various press reports as "the world's third-largest spammer." (Newby Decl., Exh. D.) Numerous other articles submitted by SpamCop also describe Mr. Richter and OptIn as spammers, responsible for billions of unsolicited bulk commercial e-mails. (Newby Decl. Exh. F.) In other words, SpamCop is not the only entity describing OptIn as a spammer.

  OptIn's principle ISP is a company called Optigate. On or about April 29, 2004, Optigate informed Mr. Richter that its upstream provider, Above.net, had terminated some of Optigate's bandwidth because of OptIn's violations of Above.net's "Acceptable Use Policy" (which prohibits spamming). (Richter Decl. ¶ 10.) Above.net did not specifically state that the violations came to its attention through reports from SpamCop.

  OptIn has been informed by Optigate that if it, or Above.net, continue to receive SpamCop reports regarding OptIn, they will be forced to terminate OptIn's bandwidth entirely. (Wolfe Decl. ¶ 4.) Other ISPs who provide OptIn with bandwidth have informed OptIn of the same. (Morrison Decl. ¶ 5.) D. The Dispute Between SpamCop and Optin

  OptIn alleges that SpamCop sends multiple copies of the same reports to ISPs, which inflates the actual number of reports against OptIn. In other words, one complaint becomes multiple complaints that cannot be distinguished because SpamCop has removed the registered user's e-mail address from the reports. (Wolfe Decl. ¶ 3.)

  Officially, SpamCop discourages individuals from submitting more than one complaint regarding a single spam. (Haight Decl. ¶ 8.) SpamCop attempts to remove duplicative submissions and states that it takes corrective action against individuals who submit duplicate requests, up to and including banning complaints from individuals engaged in this practice. (Id.)

  SpamCop further explains that it does not intentionally send multiple copies of the same complaint to the same ISP. Its software is not designed to do so. (Haight Supp. Decl. ¶ 20.) If the multiple copies are being sent, it is for one of three reasons. First, it may be because the ISP has directed that complaints be sent to more than one recipient within its system. (Haight Supp. Decl. ¶ 13.) Second, if the ISP supported both the e-mail and the banner ad, then SpamCop may report two issues, one that the purported spam passed through the ISP's network, and two that the ISP hosted a banner ad appearing in the purported ...


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