AOL Wins Suit against Laetrile Spammer

Stephen Barrett, M.D.


In December 1998, as noted below, America Online (AOL) filed a suit charging that Jason Vale, doing business as Christian Brothers, had fraudulently generated junk e-mail using the AOL.com address and creating the false impression that the e-mails had either been sent or endorsed by AOL. In 1999 and 2000, after Vale chose to ignore the suit, the presiding judge issued a default judgment and adopted a magistrate's recommendations that (a) AOL be paid $17,940 for hardware-processing costs, triple damages of $389,020 for lost advertising revenue, $24,625 in attorney's fees, and $200,000 in punitive damages and (b) that Vale and his company be permanently enjoined from continuing to abuse AOL and its members. AOL has posted the court decisions.


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

AMERICA ONLINE, INC.,
Plaintiff,

v.
THE CHRISTIAN BROTHERS and JASON VALE,
Defendants.
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COMPLAINT
98 Civ. 8959

Plaintiff America Online, Inc. ("AOL"), through its undersigned counsel, Schlam Stone & Dolan, a Limited Liability Partnership, for its complaint against The Christian Brothers and Jason Vale, alleges as follows:

I. NATURE OF THE CASE

1. AOL is an online service that allows more than fourteen million subscribers to use their personal computers to, inter alia, exchange electronic mail messages ("e-mail") over the Internet with anyone in the world who has an Internet e-mail address. By this action, AOL seeks to enjoin, and recover damages caused by, Defendants' deceptive practices of transmitting unsolicited commercial bulk e-mail, commonly known as "spam," to AOL's subscribers ("AOL members" or "members").

2. Operating from Internet domains such as "laetrile.net" and "apricotsfromgod.com," Defendants have bombarded AOL and its members with millions of unsolicited Internet e-mail messages that advertise a purported "cancer cure" ­ specifically, the consumption of laetrille (apricot seeds) sold by Defendants. Despite demands by AOL that they cease sending this junk e-mail, Defendants have refused to stop their mass mailings and have persisted in using deceptive techniques designed to frustrate AOL's ability to detect and filter this e-mail "spam." Among other things, Defendants have created a fraudulent address with the designation "aol.com" within their e-mail messages so that the messages falsely appear to originate from AOL members. Defendants' mass e-mailing of "spam" has resulted in thousands of member complaints, members terminating their AOL service and has clogged AOL's computer systems, co-opting valuable computer staff resources needed to deliver legitimate internet e-mails.

3. Defendants' indiscriminate mass mailings and deceptive practices thus cause serious and irreparable injury to AOL by impairing the functioning of AOL's e-mail system and harming AOL's business reputation and goodwill among its members, who wrongly blame AOL for their receiving unwanted e-mail. Moreover, Defendants unauthorized use of the "aol.com" domain creates the misconception among AOL members that AOL condones or tolerates the highly criticized practice of unsolicited bulk e-mailing or endorses defendants' "cancer cure." This unlawful conduct also enables Defendants to unjustly enrich themselves at AOL's expense by avoiding the advertising expenses Defendants would otherwise have to pay, and instead forces AOL to bear the cost of transmitting the millions of pieces of Defendants' e-mail. Defendants' spamming violates, inter alia, the Computer Fraud And Abuse Act, the Lanham Act, the New York General Business Law §§ 349 and 350 and common law.

4. AOL has repeatedly demanded that Defendants stop their mass mailings and misuse of the "AOL.com" name and has tried through technical means to stop the misappropriation of AOL's computer resources, but these attempts have proven unsuccessful. By this action, AOL seeks compensatory and punitive damages and an injunction to prevent further unlawful conduct by Defendants. AOL also asks that a constructive trust be imposed in favor of AOL on all monies received by the Defendants as a result of their bulk e-mail activities.

II. THE PARTIES

5. AOL is a corporation organized and existing under the laws of the State of Delaware with its principal place of business at 22000 AOL Way, Dulles, Virginia 20166. AOL provides a proprietary, content-based online service. AOL owns and maintains computers and other devices that enable its over 14 million members ("AOL members") to obtain various services, including the ability to send and receive E-mail and other types of access to the Internet. AOL's central computer systems, which include specialized computers (called "servers") that process electronic messages, are located in the Commonwealth of Virginia. E-mail sent to and from AOL members is processed through and stored on these computers. AOL's computers in Virginia likewise provide the functionality for, and maintain the content of, the AOL service provided throughout the United States and abroad.

6. AOL has registered the domain name "aol.com" with the InterNIC, a consortium run by the National Science Foundation responsible for assigning the unique addresses used by computers to communicate through the Internet. AOL's domain name is used extensively in commerce and is recognized worldwide as a source identifier of AOL's online services.

7. AOL has used as a trademark and a service mark the initials "AOL," in various forms and styles, continuously in commerce to identify its products and services since October 1989. This mark has been registered as a trademark upon the Principal Register of the United States Patent and Trademark Office ("PTO"), as United States Registration No. 1,984,337, registered July 2, 1996. The mark has been registered as a service mark upon the Principal Register of the PTO as United States Registration No. 1,977,731, registered June 4, 1996.

8. Defendant The Christian Brothers ("TCB"), upon information and belief, is an unincorporated entity or association located and operating out of 15147 18th Avenue, Whitestone, New York 11357.

9. Defendant Jason Vale ("Vale"), upon information and belief, is the principal of The Christian Brothers, and is a citizen of New York, residing at 15147 18th Avenue, Whitestone, New York 11357.

10. Upon information and belief, Defendants operate and transact business, or have operated and transacted business, from numerous InterNIC-registered Internet domains, including the following: "laetrile.net"; "amygdalin.net"; "heavenlyhealing.com"; "christianbrothers.com"; "apricotsfromgod.com"; "canceranswer.com"; "naturalhealings.com"; and "juicenoni.net".

11. On information and belief, Defendants TCB and Vale jointly operate and transact business inside the aforementioned domains, acting in concert with one another and with third-party contractors and/or agents unknown to plaintiff AOL.

III. JURISDICTION AND VENUE

12. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331, as this action arises under the laws of the United States including the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and the Lanham Act, 15 U.S.C. §§ 1051 et seq.

13. This Court also has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1332, as there is complete diversity of citizenship between the parties, and the amount in controversy exceeds $75,000.00, exclusive of interest and costs.

14. This Court has supplemental jurisdiction of plaintiff AOL's state law claims pursuant to 28 U.S.C. § 1367.

15. Venue is proper in this district pursuant to 28 U.S.C. § 1391, because a substantial part of the events or omissions giving rise to AOL's claims occurred in this judicial district.

IV. BACKGROUND

A. How The Internet Works

16. Defendants committed the acts complained of herein through their use of the electronic messaging capabilities of the Internet. The Internet is a complex "network of networks" that interconnects innumerable smaller groups of linked computers. All of the networks comprising the Internet are connected in a manner that permits any computer on the Internet to communicate with any other computer on the Internet.

17. Among the internet services that AOL provides to its members is the ability to send and receive e-mail from all over the world.

18. E-mail consists of text messages sent electronically from one computer user to another over the Internet. The Internet makes it possible for a user rapidly to exchange e-mail messages with other Internet users in the United States and abroad. E-mail can be sent virtually instantaneously from one individual to another, or from an individual user to a large group of addresses. The Internet's e-mail functionality makes it possible for a sender simultaneously to transmit tens and even hundreds of thousands of copies of a single message.

19. The InterNIC, a consortium run by the National Science Foundation, is responsible for assigning the unique addresses used by computers to communicate through the Internet. These unique addresses are referred to as Internet Protocol addresses. Like the unique telephone numbers used by individuals and businesses for their telephone communications, IP addresses ensure orderly communications between computer networks on the Internet.

20. The InterNIC also assigns "domain" names to individuals, businesses, and organizations using the Internet. Domain names function as convenient shorthand for users of the Internet, giving Internet users the option of using readily understandable proper names to identify themselves and their communications, rather than cumbersome twelve-digit IP addresses. Businesses, for example, typically are assigned by the InterNIC domain names with the ".com" designation (e.g., "Brandy.com"), while educational and governmental organizations usually are assigned ".edu" and ".gov" domain names (e.g., "topuniversity.edu" and "federalagency.gov"). Because each domain name corresponds to a unique IP address, the InterNIC performs the important task of maintaining the directories that allow computers connected to the Internet to find the appropriate IP address for a particular domain name requested by a user.

21. An e-mail address, for example, "johnsmith@aol.com", consists of two components: the user name, and the domain name. The component before the symbol "@" is the account name and specifies the individual sending or receiving the message. The component after the "@" symbol is the Internet domain name, which indicates the e-mail provider used by the individual to transmit and receive messages (e.g., "jdoe@company.com").

22. E-mail messages contain "headers" generated by the sender's Internet Service Provider ("ISP"), which identifies the sender's return e-mail address, the message's "subject," and other information related to the transmission of the e-mail message (such as the date, time and routing information). AOL's system is configured such that these "headers" are excerpts at the beginning of each message and appear in full text at the conclusion of the message.

23. Like postal mail, e-mail messages contain a destination address (identifying the intended recipient) and a return address (identifying the sender of the message and the e-mail provider used by the sender to transmit the message).

24. The World Wide Web (the "Web") allows Internet users to visit "Web sites" using a communications interface—a "Web browser"—that enables the user to view the text and/or pictorial contents of each Web site.

25. Web sites bear unique domain names that enable Internet users to direct their browsers to the computer hosting the desired Web site. For example, an Internet user wishing to visit the Web site operated by Defendants at the "apricotsfromgod.dom" domain would enter the Web address for this domain "http://www.apricotsfromgod.com."

26. It is possible for an e-mail sender to override his or her computer's automatic system and deliberately change the information contained in the message's header. E-mail senders may also purchase various software programs whose function is to alter e-mail header information for them. Changing information in the header of an e-mail message can be used to disguise the true identity and location of the sender so that the recipient would believe that a different party and/or e-mail provider actually sent the message, and to otherwise circumvent filtering systems designed to block unwanted e-mail. Various "stealth" software programs, designed for and marketed to the senders of junk e-mail, facilitate the falsification of e-mail header information in mass mailings.

B. The AOL Service

27. AOL operates an online service. It allows its members to exchange e-mail messages over the Internet with any other e-mail user in the world who has an Internet e-mail address. Members can exchange e-mail messages at no additional charge. AOL has offered this service under its well-known service mark, trade name and trademark, "AOL." To become an AOL member, one installs a copy of AOL's proprietary software on one's personal computer and completes a demographic profile. Thereafter, members are allowed to use the AOL service according to the Service Agreement to which all new members must agree at the time they open a new account. AOL members either pay a flat monthly fee or a per-usage fee for AOL services.

28. Under the Service Agreement, AOL members are specifically prohibited from sending unsolicited commercial bulk e-mail, or spam, and from using their membership to harvest or collect any information, including the user names or the e-mail addresses, of other AOL members. AOL will terminate the account of any AOL member who violates the Service Agreement. The Service Agreement expressly reserves AOL's right to block unsolicited e-mail sent to its members from the Internet, even if the mail is sent by non-members. In addition, AOL's Unsolicited Bulk E-Mail Policy—which is posted at AOL's website—expressly prohibits non-members from transmitting unsolicited e-mail through AOL's computers or to its members.

29. AOL's e-mail system was created solely for the benefit of AOL members, who pay the prescribed fees and who agree to adhere to AOL's terms of service. The e-mail system is operated through dedicated servers that store and route e-mail messages between AOL's members. AOL permits its members to use the "AOL.com" domain name which, when combined with a unique user name, gives each member a distinctive e-mail address from which to exchange e-mail with Internet users (e.g., "member98@aol.com").

C. Defendants' Bulk E-Mailing Practices

30. On information and belief, Defendants have unlawfully obtained vast mailing lists of AOL members' e-mail addresses and repeatedly transmitted, at virtually no cost to Defendants, tens of millions of messages—and up to hundreds of thousands of messages per hour—across the Internet through AOL's computers and computer networks to AOL's members.

31. Many of Defendants' promotional e-mails tout medical literature concerning a laetrile "cure" for cancer, and offer to sell laetrile itself. Copies of two such messages are attached hereto as Exhibits A and B, respectively. The e-mails often state, "If you would like to be brought to the most informative Web site on the Internet concerning cancer and the simple known answer, click on the following blue link." The e-mail then states "Click here and you'll automatically be brought to the Web site (See Exhibit A)

32. Another version of the unsolicited bulk e-mail states:

The answer to cancer has been know [sic] for years. This web site proves that eating inexpensive apple seeds and/or apricot seeds completely cure [sic] most cancers. The theory also states that by eating just a few seeds per day will 99.95% guarantee that you will never develop cancer.
click on the link below to be brought to the site.
www.vitaminb17.com
Sincerely, Jason (See Exhibit B)

33. A third variety of Defendants' bulk e-mail states:

The answer to cancer has been known for years. . . click below for more info. (See Exhibit C)

34. The header of these three variations of Defendants' e-mail state that e-mail was received from "Jason44321aol.com" or someone at "aol.com". These headers are completely fraudulent, as these e-mails were never generated by AOL or an AOL customer. Thus, these headers falsely attribute the transmission of these e-mails to AOL. Examples of other variations of Defendants' spam are annexed hereto as Exhibit D.

35. Defendants' promotional messages regarding their "cancer cures" typically direct recipients to a Web site where additional information regarding the product is located. Through that Web site the user is able to purchase, among other things, laetrile, a videotape and a book promoting Defendants' advice regarding cancer treatment. A copy of the text contained on Web site is annexed hereto as Exhibit E.

36. The transmission of unsolicited bulk e-mail messages, like those sent by Defendants, is a practice widely condemned in the Internet community. The receipt of unsolicited, unwanted e-mail is one of the principal complaints voiced by AOL members. AOL has received tens of thousands of complaints from its members respecting Defendants' spam. (Examples of some of these complaints are annexed hereto as Exhibit F)

37. Defendants have engaged in deceptive practices to frustrate AOL's and its members' ability to filter Defendants' junk mailings. Defendants have increased the number of their registered domains and employed a shifting combination of random user names, domains, and IP addresses from which to transmit their promotional messages for the purpose and with the effect of evading AOL's technical means of identifying incoming junk mail and blocking the messages before they are delivered.

38. Defendants also intentionally forge the headers in the electronic return addresses of their e-mail messages to conceal the domains from which they operate and transmit their e-mail. Often Defendants use the domain name "aol.com." The purpose and effect of these practices is to prevent AOL from using technical means to block the unsolicited e-mail messages before they are delivered.

39. When Defendants incorporate AOL's registered mark and domain name in the return addresses of their messages, it creates the false and damaging misconception among the AOL members who receipt these messages that AOL endorses or condones the Defendants' unsolicited bulk e-mail practices and the dubious cancer cure that they promote. Indeed, one of the member complaints annexed hereto states "I can't do anything about these spams coming from AOL" (See Exhibit F) (emphasis added). Moreover, the Defendants' use of forged "aol.com" header information is a misappropriation of AOL's domain name and registered mark.

40. Defendants' transmission of unsolicited bulk e-mail to AOL has damaged, and continues each day to damage, AOL's business, its goodwill, and its relationship with its members. AOL's valuable trademark and service mark and associated goodwill are diluted and damaged by their wrongful association with junk e-mail and junk e-mailers like Defendants.

41. After receiving thousands of complaints from its members, AOL sent Defendants a letter by Federal Express and e-mail on February 10, 1998, demanding that they cease and desist their unauthorized transmissions to and through AOL's proprietary computers and computer networks. Defendants, however, have continued the practice unabated.

D. The Irreparable Harm Caused To AOL And Its Members

42. Any e-mail that is sent through the Internet to an AOL address must be transmitted to and sorted by AOL's mail servers. The AOL mail system has a finite capacity designed to accommodate the demands imposed by AOL members. The system is not designed to accommodate, and it is vulnerable to disruption by, indiscriminate mass mailings from Defendants and other senders of bulk commercial e-mail. AOL has been forced to devote thousands of hours of staff time and millions of dollars in new equipment to processing these mass mailings and addressing member complaints regarding unsolicited e-mail. In addition, AOL does not charge the sender or recipient to send e-mail and it is AOL which must pay the cost for transmitting each piece of the billions of pieces of unsolicited e-mail.

43. The repeated transmission of massive batches of unsolicited e-mail messages by Defendants and other junk e-mailers also degrades the performance of AOL's computers and computer system, forcing AOL to divert computer processing resources away from the handling of authorized e-mail for AOL members. The aggregation of time require to process these bulk e-mail transmissions slows the "delivery" of all e-mail to AOL members, and has at times resulted in significant delays in members' receipt of their e-mail from the Internet.

44. Defendants' practice of sending unsolicited commercial e-mail through AOL's mail system also has the effect of unfairly shifting to AOL the costs of transmitting Defendants' promotional messages. AOL, rather than Defendants, pays the costs of the additional computer and staff resources that must be devoted to the processing of the batches of e-mail that Defendants have transmitted through AOL's computer systems, and Defendants are unfairly spared the considerable expense of paying for their own advertising.

45. Defendants' activities have particularly adverse consequences with respect to the more than one million AOL members who pay for their access to AOL's services and e-mail capability in increments of time. Time spent by such a member accessing, reviewing, and discarding unsolicited e-mail messages is paid for by the member according to the member's hourly billing rates. These AOL members thus end up paying twice for Defendants' activities, both through the increased costs and delays in AOL's operations occasioned by the processing of mass quantities of e-mail, and through increased monthly billings for their connection time with AOL. The costs of member dissatisfaction ultimately are borne by AOL, in lost business and harm to its reputation and goodwill.

46. Defendants' transmissions of unsolicited commercial e-mail to AOL have caused damage, and continue each day to damage, AOL's business reputation and goodwill, and its relationship with its members. Moreover, Defendants' successful efforts to evade the filtering tools used by AOL to prevent the receipt of unsolicited commercial e-mail is likely to foster the erroneous impression amongst AOL members that AOL authorizes, endorses, or otherwise approves of Defendants' transmission of unsolicited promotional messages.

47. Defendants' transmission of batches of hundreds of thousands of unsolicited e-mail messages also results in a substantial quantity of mail sent to invalid e-mail addresses, which causes additional harm to the performance of AOL's mail systems. For each message that contains undeliverable addresses, AOL's computers must attempt to transmit a message back to the originating site of the e-mail message to inform it of the delivery failure. Attempts to send such "bounce" messages back to Defendants' computers consume considerable processing resources within AOL's e-mail systems. The problem is exacerbated by the Defendants' use of forged "reply to" lines in the header, because AOL's computer resources are expended on fruitless attempts to deliver the replies to fictitious e-mail addresses.

48. Finally, Defendants' dissemination of bulk e-mail advertising is particularly pernicious in this case because it wrongly implies that AOL endorses Defendants' claims for curing or preventing cancer and the supposed cures themselves.

49. AOL has undertaken various technical efforts to permit its members to opt out of receiving messages from domains and IP addresses that are or have been the subject of member complaints regarding unsolicited bulk e-mail. These methods, however, rely on truthful e-mailing practices to be successful. When senders such as Defendants mail from multiple and varying domains, employ random and varying user names, relay their messages through the servers of innocent third parties, or falsify the headers on their e-mails to indicate that their messages are from domains that AOL does not filter (e.g., "msn.com" or "aol.com"), AOL's computers and computer system cannot detect and filter the e-mail.

COUNT I
IMPAIRING COMPUTER FACILITIES IN VIOLATION
OF THE COMPUTER FRAUD AND ABUSE ACT
(18 U.S.C. § 1030 et seq.)

50. AOL repeats and realleges the allegations of paragraphs 1 through 49 of the Complaint.

51. In connection with the provision of online and Internet services to its members, the citizens of the State of New York, the Commonwealth of Virginia, the State of Washington and other states, AOL owns and maintains one or more "protected computers" as the term is defined in the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(e)(2)(B) through which e-mail transmissions are received, stored and disseminated in interstate and/or foreign commerce or communication ("AOL's Protected Computer Facilities").

52. In the year proceeding the date of the filing of this complaint, Defendants and their agents repeatedly transmitted to AOL's Protected Computer Facilities batches of unsolicited commercial e-mail messages without valid authorization. On each occasion on which Defendants and their agents transmitted these batches of unsolicited commercial e-mail messages, Defendants and their agents knew that the transmission of these e-mail messages would impair the operation of AOL's Protected Computer Facilities and AOL's provision of e-mail services to its members.

53. In transmitting these batches of hundreds of thousands of unsolicited commercial e-mail messages, Defendants and their agents knowingly falsified portions of the Internet "header" information and engaged in other deceptive practices, for the purpose of attempting to conceal from AOL and its members the point of origin of the transmission.

54. Defendants and their agents knowingly and intentionally caused the transmission of information to, and accessed, AOL's computer facilities without authorization, and as a result of such conduct caused damage, or recklessly caused damage in violation of 18 U.S.C. § 1030 (a)(5).

55. The damages suffered by AOL as a result of Defendants' and their agents' conduct include the impairment of the integrity and/or availability of data, programs, systems, and/or information in AOL's Protected Computer Facilities, and aggregate to at least $5,000 in value in the year proceeding the date of filing of this complaint.

56. Defendants and their agents threaten to continue to engage in the unlawful transmissions complained of herein, and unless restrained and enjoined will continue to do so, impairing the services provided to AOL members and causing AOL irreparable damage. It is difficult to ascertain the amount of compensation that could afford AOL adequate relief for Defendants and their agents continual and unlawful acts. AOL's remedy at law is inadequate to compensate for the injuries threatened.

COUNT II
EXCEEDING AUTHORIZED ACCESS IN VIOLATION OF
THE COMPUTER FRAUD AND ABUSE ACT
(18 U.S.C. § 1030 et seq.)

57. AOL repeats and realleges the allegations of paragraphs 1 through 56 of the complaint.58. In connection with the provision of online and Internet services to its members who are citizens of the State of New York, the Commonwealth of Virginia, the State of Washington and other states, AOL owns and maintains computers and a computer system that are "protected computers" as that term is defined in the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (e)(2)(B) because they are used in interstate commerce and communication.59. AOL's service agreement with its members and Bulk E-Mail Policy specifically prohibits AOL members from using their AOL accounts to harvest or collect the e-mail addresses of other AOL members.60. On information and belief, Defendants, either individually or through their agents, maintain or have maintained an AOL membership and have used that membership to harvest or collect the e-mail addresses of other AOL members, and have transmitted e-mails to AOL and its members without authorization.61. Defendants have intentionally "exceeded authorized access," as that term is defined in 18 U.S.C. § 1030 (e)(s), to AOL's protected computers by harvesting or collecting the e-mail addresses of other AOL members, have obtained information via interstate communication to which they are not entitled, and thereby have violated 18 U.S.C. § 1030 (a)(2). 62. By exceeding authorized access to AOL's protected computers, Defendants have caused AOL loss or damage aggregating at least $5,000 during a one-year period proceeding the filing of this complaint. 63. Defendants will continue to engage in the unlawful transmissions and access complained of herein unless restrained and enjoined from do so, causing AOL irreparable damage. The amount of compensation that would afford AOL adequate relief for such continuing acts is difficult to quantify. Moreover, AOL's members remain at risk of continued impairment of the services provided them by AOL. AOL's remedy at law is inadequate to compensate for the injuries threatened.

COUNT III
FALSE DESIGNATION OF ORIGIN
(18 U.S.C. § 1125(a))

64. AOL repeats and realleges the allegations of paragraphs 1 through 63 of the Complaint.

65. Defendants have engaged in acts of unfair competition by falsely and without authorization using AOL's domain name "aol.com" in their e-mail "headers," in connection with Defendants' sale, offering for sale, and distribution in commerce of Defendants' products. Defendants' use of AOL's domain name amounts to a false representation that AOL allows or condones their activities or endorses their products, in violation of 15 U.S.C. § 1125(a).

66. Particularly because "aol.com" incorporates and bears AOL's registered trade and service mark, Defendants' misappropriation of AOL's domain name is likely to cause confusion and to deceive AOL members and others into the erroneous belief that AOL is connected to, affiliated with, approves, or condones Defendant's indiscriminate, unsolicited e-mail practices, causing serious and irreparable damage to AOL in the form of lost good will and business reputation.

67. It is difficult to ascertain the amount of compensation that could afford AOL adequate relief for Defendants' continuing acts. AOL's remedy at law is inadequate to compensate it for the ongoing injuries caused by such acts.

COUNT IV
DILUTION OF INTEREST AND SERVICE MARKS
(18 U.S.C. § 1125 (c)(1))

68. AOL repeats and alleges the allegations of paragraphs 1 through 67 of the Complaint.

69. In connection with its provision of online and Internet services, AOL has registered and used extensively in interstate commerce the registered mark "AOL," which identifies its Internet and online services, and which qualifies as a "famous" mark within the meaning of 15 U.S.C. § 1125 (c)(1).

70. Defendants have knowingly and willfully, without AOL's consent or authorization reproduced, counterfeited, and used the registered mark "AOL" after this mark became famous in interstate commerce, in connection with Defendants' sale, offering for sale, and distribution of Defendants' services.

71. Defendants' intentional and unauthorized use of the "AOL" mark in connection with their unsolicited messages is likely to dilute AOL's interest in the registered "AOL" mark in violation of the Lanham Act, 15 U.S.C. § 1125(c)(1), by linking the "AOL" mark to the transmission of unsolicited bulk e-mail, a practice widely condemned by the Internet community and which AOL does not maintain, tolerate or condone. Defendants' intentional and unauthorized use of the "AOL" mark in connection with the unsolicited messages is also likely to dilute AOL's interest in the registered "AOL" mark in violation of the Lanham Act by linking the AOL mark to Defendants' dubious cancer cures and medical advice.

72. It is difficult to ascertain the amount of compensation that could afford AOL adequate relief for Defendants' continuing acts. AOL's remedy at law is inadequate to compensate it for the ongoing injuries caused by such acts.

COUNT V
CONVERSION OR TRESPASS TO CHATTELS
UNDER THE COMMON LAW OF NEW YORK AND VIRGINIA

73. AOL repeats and realleges the allegations of paragraphs 1 through 72 of the complaint.

74. The computers, computer networks, and computer services that comprise AOL's e-mail system are the personal property of AOL.

75. Without valid authorization, Defendants have intentionally and repeatedly obtained access to, and made use of, AOL's proprietary computer equipment and e-mail system to transmit unauthorized and unsolicited commercial e-mail to AOL members for Defendants' own economic benefit.

76. Through their practice and pattern of repeatedly transmitting unsolicited commercial e-mail in high volume to AOL's proprietary computer equipment and e-mail system, Defendants have wrongfully exercised dominion over AOL's computers and e-mail system in derogation of AOL's rights to its property. Defendants' wrongful exercise of dominion over AOL's proprietary computer equipment and e-mail system has deprived AOL and its members of the legitimate use of this commercially valuable system, causing AOL and its members to suffer a loss difficult to calculate, but which certainly far exceeds $75,000, exclusive of interest and costs.

77. Under the common law of New York (where Defendants are located and these e-mails originate) and Virginia, (where AOL and its computers are located), Defendants' conduct constitutes trespass to AOL's chattels, or, alternatively, conversion of AOL's chattels.

78. As a result of Defendants' trespass to, or conversion of, AOL's chattels, AOL has suffered and will continue to suffer irreparable injury, loss of reputation and pecuniary damages. AOL's damages include not only pecuniary injury, but the loss of its members and the loss of the good will of its existing members. Unless enjoined by this court, Defendants will continue these acts of conversion and/or trespass, thereby causing AOL continuing and irreparable damage.

79. Defendants' acts of trespass and/or conversion have been undertaken intentionally with malice, oppression and fraud, justifying the imposition of punitive damages in amount sufficient to punish Defendants and deter Defendants and others from engaging in similar conduct.

COUNT VI
VIOLATIONS OF THE VIRGINIA COMPUTER CRIMES ACT
(Va. Code Ann. § 18.2-152.1 et seq.)

80. AOL repeats and realleges the allegations of paragraphs 1 through 79 of the complaint.

81. In connection with the provision of online and Internet computer services to its members who are citizens of the Commonwealth of Virginia and other states, AOL maintains in the Commonwealth of Virginia computers and computer networks that are "property" within the meaning of Va. Code Ann. § 18.2-152.2.

82. Without authority, Defendants have repeatedly transmitted batches of tens and hundreds of thousands of unsolicited commercial e-mail messages to and through AOL's computers and computer networks in the Commonwealth of Virginia.

83. In transmitting these batches of tens and hundreds of thousands of unsolicited commercial e-mail messages, Defendants knowingly used deceptive practices for the purpose of attempting to conceal from AOL the actual quantity of spams being sent and the sender of the transmission.

84. Without authority, Defendants have obtained access to and used AOL's computers and computer networks with the intent to obtain the use of AOL's property and services by false pretenses, in violation of Va. Code Ann. § 18.2-152.3.

85. The foregoing acts of Defendants have caused injury to AOL, its computers and computer networks, and to AOL's business relations, reputation and goodwill, in an amount difficult to calculate, but which certainly far exceeds $75,000, exclusive of interest and costs.

86. Defendants will continue to engage in the unlawful transmissions complained of herein unless restrained and enjoined from doing so, causing AOL irreparable damage. Moreover, AOL's members in the Commonwealth of Virginia remain at risk of continued impairment of the services provided them by AOL. AOL's remedy at law is, therefore, inadequate to compensate for the injuries threatened.

COUNT VII
MISAPPROPRIATION OF NAME AND IDENTITY

87. Plaintiff AOL repeats and realleges the allegations contained in paragraphs 1 through 86 of the complaint as if fully set forth herein.

88. Defendants knowingly used AOL's name and identity by placing false return addresses on the unsolicited bulk e-mail disseminated by Defendants by using AOL's name and domain name in the header and elsewhere in the e-mail, making it appear as though the e-mail originated from AOL.

89. The misappropriation of AOL's name and domain was used in commercial advertising traceable to Defendants and was to Defendants' commercial advantage because undeliverable e-mail was misdirected and sent to AOL, rather than to Defendants.

90. The misappropriation of AOL's name was also to the commercial advantage of Defendants because AOL, rather than Defendants, received the complaints and hostility associated with the e-mail, and because the origination of the e-mail and endorsement of Defendants' medical advice and supposed cancer cure was falsely attributed to AOL.

91. The misappropriation of AOL's name, identity and domain name was not authorized and was done without AOL's consent.

92. AOL was injured as a result of the misappropriation. Defendants were able to shift the cost of bounced-back e-mail and to misdirect recipient complaints and hostility away from themselves and onto AOL. Defendants also unjustly enriched themselves at AOL's expense by forcing AOL to bear the cost of transmitting advertising for their products and advice, and injured AOL's reputation and goodwill by making it appear that AOL endorses Defendants' products, medical advice and practice of spamming. Defendants further injured AOL by diluting the strength of its well-established name and mark.

93. AOL has been irreparably harmed by the misappropriation of its name, identity and domain name, and has no adequate remedy at law.

94. The misappropriation of AOL's name by Defendants is continuing. As a result, the value of AOL's business, reputation and substantial goodwill are being irreparably damaged. Because these damages cannot be readily ascertained—although they certainly far exceed $75,000—plaintiff lacks an adequate remedy at law.

COUNT VIII
VIOLATION OF NEW YORK GENERAL BUSINESS LAW
§§ 130, et seq, 349 AND 350

95. Plaintiff AOL repeats and realleges the allegations contained in paragraphs 1 through 94 of the complaint as if fully set forth herein.

96. Defendants knowingly used AOL's name and identity by placing false return addresses on the unsolicited bulk e-mail disseminated by Defendants by using AOL's name and domain name in the header and elsewhere in the e-mail, making it appear as though the e-mail originated from AOL.

97. The misappropriation of AOL's name and domain was used in commercial advertising traceable to Defendants and was to Defendants' commercial advantage because undeliverable e-mail was misdirected and sent to AOL, rather than to Defendants.

98. Particularly because "aol.com" incorporates and bears AOL's registered trade and service mark, Defendants' misappropriation of AOL's domain name is likely to cause confusion and to deceive AOL members and others into the erroneous belief that AOL is connected to, affiliated with, approves, or condones Defendants' indiscriminate, unsolicited e-mail practices, causing serious and irreparable damage to AOL in the form of lost good will and business reputation.

99. The misappropriation of AOL's name was also to the commercial advantage of Defendants because AOL, rather than Defendants, received the complaints and hostility associated with the unsolicited bulk e-mail.

100. The misappropriation of AOL's name, identity and domain name was not authorized and was done without AOL's consent.

101. AOL was injured as a result of the misappropriation. Defendants were able to: shift the cost of bounced-back bulk e-mail and to misdirect recipient complaints and hostility away from themselves and onto AOL; unjustly enrich themselves at AOL's expense by forcing AOL to carry Defendants' advertisements through AOL's computer system without its permission; and wrongly imply that AOL approves of Defendants' practice of spamming, their cancer cures, and their medical advice. In addition, Defendants diluted AOL's well-established name and mark.

102. AOL has been irreparably harmed by the misappropriation of its name, identity, domain name and services, and has no adequate remedy at law.

103. The misappropriation of AOL's name by Defendants is continuing. As a result, the value of AOL's business, reputation and substantial goodwill are being irreparably damaged. Because these damages cannot be readily ascertained ­ although they far exceed $75,000, exclusive of interest and costs—plaintiff lacks an adequate remedy at law.

COUNT IX
COMMON LAW FRAUD

104. Plaintiff AOL repeats and realleges the allegations contained in paragraphs 1 through 103 of the complaint as if fully set forth herein.

105. AOL has made a substantial investment of time, effort and money in the development of its business.

106. As a result of Defendants' misrepresentation of AOL's name, identity and domain name, AOL has suffered damages, and Defendants have earned profits in an amount to be proven at trial.

107. Defendants have acted with fraud, oppression and malice, and AOL is therefore entitled to punitive damages.

108. Defendants' acts of misrepresentation continue to damage AOL and Defendants continue to earn profits from this misrepresentation. As a result, the value of AOL's business, reputation and substantial goodwill are being irreparably damaged. Because these damages cannot be readily ascertained, plaintiff lacks an adequate remedy at law.

109. Defendants' conduct was deliberate and intentional. Defendants' attempts to conceal the identity and e-mail address of the sender of the spam was intended to deceive AOL and the recipients of the spam of its true origin.

110. AOL has been damaged by Defendants' fraud through the loss of members and revenue and damage to its business name and reputation. Although these damages cannot be readily ascertained, they far exceed $75,000, exclusive of interest and costs.

COUNT X
UNJUST ENRICHMENT

111. Plaintiff AOL repeats and realleges the allegations contained in paragraphs 1 through 110 of the complaint as if fully set forth herein.

112. Defendants have derived considerable economic benefit from their conduct of wrongfully implying that spam originated from AOL or an AOL account, and through their theft of AOL services and harvesting of AOL member names.

113. Defendants have also derived considerable economic benefit from their conduct by shifting the cost of undeliverable and bounced-back e-mail to AOL and the cost associated with responding to numerous customer complaints about spam.

114. Defendants have also derived considerable economic benefit from their conduct by not having to pay for their own advertising and instead causing AOL to incur the cost of delivering millions of pieces of unsolicited bulk e-mail.

115. AOL has not been compensated in any way by Defendants for the costs and damages associated with their unsolicited bulk e-mail, or for the advertising expenses avoided by Defendants.

116. AOL has been damaged by Defendants' conduct and it is entitled to an award of damages by means of (a) a constructive trust in favor of AOL on all monies received by Defendants as a result of their bulk e-mail activities, and (b) an award of damages of the expenses avoided by Defendants by reason of their spamming.

COUNT XI
NUISANCE

117. Plaintiff AOL repeats and realleges the allegations contained in paragraphs 1 through 116 of the complaint as if fully set forth herein.

118. Defendants' conduct in repeatedly transmitting millions of pieces of unsolicited bulk e-mail to AOL members burdens AOL's computer systems, shifts the cost of transmitting and tracking these e-mail to AOL injures AOL's reputation, causes AOL to lose members and revenues, caused AOL members to incur unnecessary and unwanted billing to AOL by being forced to spend time reading the unsolicited e-mail and constitutes a harassment of AOL's members.

119. As a result, Defendants' actions constitute a nuisance.

120. This nuisance is continuing. As a result, the value of AOL's business, reputation and substantial goodwill are being irreparably damaged, and AOL's enjoyment and the value of its property has been diminished. In addition, the enjoyment and the value of the AOL members' interest in their "license" to use AOL has been severely and irreparably diminished by this nuisance.

121. Because these damages cannot be readily ascertained, and are irreparable, plaintiff lacks an adequate remedy at law.

122. These damages, as outlined above, also constitute special damages.

COUNT XII
VIOLATION OF THE WASHINGTON STATE
UNSOLICITED COMMERCIAL ELECTRONIC MAIL ACT

123. AOL repeats and realleges the allegations in paragraphs 1 through 122 of the Complaint.

124. AOL has hundreds of thousands of members who are residents of the State of Washington.

125. AOL maintains computer facilities that provide and enable computer access by multiple users to its computer service and provide access to the internet and thereby qualifying it as an "interactive computer service" within the meaning of the Washington State Unsolicited Commercial Electronic Mail Act (the "Act").

126. Defendants' unsolicited bulk e-mail is a "commercial electronic mail message" within the meaning of the Act, and "aol.com" is an "Internet domain name" within the meaning of the Act.

127. Defendants have intentionally initiated the transmission of electronic mail messages that (a) use AOL's Internet domain name without the permission of AOL and (b) misrepresented information in identifying the point of origin of the transmission path of the unsolicited bulk e-mail messages sent by defendants.

128. Defendants transmitted these electronic messages to residents of Washington State after the effective date of the Act.

129. Defendants did so knowing, or having reason to know, that the recipients were Washington residents.

130. Defendants actions consitute various violations of the Act, and, as provided by the Act, are also unfair and deceptive acts in trade or commerce and as an unfair method of competition in violation of 19.86 RCW (1997), the Washington Consumer Protection Act.

131. By virtue of Defendants' violations of the Act and 19.86 RCW (1997), AOL is entitled to an award of compensatory damages, as provided for in the Act, in an amount to be determined at trial but which in no event is less than $1,000 per e-mail message sent to each AOL member in the State of Washington by Defendants since the effective date of the Act.

132. Defendants threaten to engage in the unlawful action alleged herein, and unless restrained and enjoined will continue to do so, causing irreparable harm to AOL.

WHEREFORE, Plaintiff AOL requests entry of judgment in its favor and against Defendants TCB and Jason Vale as follows:

a. Awarding AOL compensatory and punitive damages against Defendants, jointly and severally, in an amount sufficient to punish and deter these Defendants and others from similar malicious, oppressive, and fraudulent conduct in the future; and

b. Granting preliminary and permanent injunctive relief against Defendants, their agents, and all persons acting in concert or participating with them, enjoining them from:

(i) (Sending, transmitting, directing, aiding, or conspiring with others to send or transmit, or otherwise facilitating the transmission of, any unsolicited electronic mail message, or any electronic communication of any kind, to AOL or its members;

(ii)(Using, directing, aiding, conspiring with others to use, or facilitating the use of AOL's computers or computer networks in any manner in connection with the transmission or transfer of any form of electronic information across the Internet;

(iii) (Sending, transmitting, or otherwise facilitating the transmission of, any electronic mail message, or any electronic communication of any kind, to or through Aol's proprietary computer network or to AOL members, which message or communication bears any reference to or hypertext link to any Web domain registered to or used by the Defendants, or any product or service sold or marketed by the Defendants;

(iv) (Sending, transmitting, directing, aiding, or conspiring with others to send or transmit, or otherwise facilitating the transmission of, any electronic mail message or any electronic communications of any kind, to or through AOL's proprietary computer network or to AOL members, which message or communication bears any false, fraudulent, anonymous, inactive, deceptive, or invalid header information, or otherwise uses any other artifice, scheme or method of transmission that would prevent or impede the automatic return of undeliverable electronic mail to its original and true point of origin;

(v) (Causing their electronic mail, web sites or messages to bear any AOL-registered trade or service mark or other symbol or representation falsely indicating that AOL has endorsed their products or services, that AOL is affiliated in any way with the Defendants, or that any mail or message from them originated from, or was in any way transmitted through or by, AOL or any of its members;

(vi) (Obtaining and/or using, or directing, aiding, or conspiring with others to obtain and/or use membership of AOL;

(vii) (Acquiring, transferring or compiling AOL member addresses for the purpose of transmitting unsolicited e-mail to those AOL members or engaging in any other actions that result in the receipt of any unwanted mail by AOL and its members; and

c. Imposing a constructive trust in favor of AOL on all monies received, or saved through expenses avoided, by the Defendants as a result of their bulk e-mail activities; and

d. Awarding AOL and its attorneys its costs and attorneys' fees in prosecuting this action; and

e. Granting AOL such other or additional relief as this court deems just and proper under the circumstances.

Dated: New York, New York
December 18, 1998

SCHLAM STONE & DOLAN
A Limited Liability Partnership
By:
Jeffrey M. Eilender (JME 8250)
John J.D. McFerrin-Clancy (JMC 6937)
26 Broadway
New York, New York 10004
(212) 344-5400
Attorneys for Plaintiff
OF COUNSEL: America Online, Inc.
Randall J. Boe, Esq.
Charles D. Curran, Esq.
America Online, Inc.
22000 AOL Way
Dulles, Virginia 21066-9323
(703) 265-1428

This article was posted on January 8, 2004.

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