Network Associates Loses Battle to Silence Reviewers

ajkessel writes "This article from today's New York Times covers a court ruling against Network Associates in a suit brought by the New York State Attorney General to invalidate Network Associate's shrink-wrap clause which states: 'The customer will not publish reviews of this product without prior consent from Network Associates Inc.' Network Associates has vowed to appeal." Reader SlashDotIDOne points to a CNET story which says "Network Associates could be forced to pay $0.50 for every license which included this draconian requirement: 'The customer will not publish reviews of this product without prior consent from Network Associates Inc.'"

Comments

Re:I hate Network Associates

[GigsVT]

Except that Network Solutions is a completely different company. Network Associates makes anti-virus software.

On a related note, I guess this means MS will take the "You can't publish benchmarks about .NET" clause out of that EULA. It would be hilarious to see MS forced to pay 50 cents to everyone who installed a recent servicepack with .NET.

Re:Good

[civilizedINTENSITY]

But is it 1st Amendment?

Last spring, Mr. Spitzer sued Network Associates, which has its headquarters in Santa Clara, Calif., asserting that the company's software included an unenforceable clause that effectively violated consumers' free speech. The clause, which appeared on software products and the company's Web site, read: "The customer will not publish reviews of this product without prior consent from Network Associates Inc."

http://www.canarsiecourier.com/News/2002/0221/Othe rNews/018.html
Spitzer's suit also alleges that the clauses infringe upon consumers' and the media's freedom of speech and fair use rights under copyright law. It contends that by informing software users that the speech restrictions are justified under existing "rules and regulations" - even though no such rules or regulations really exist -- the company also committed an unlawful deceptive practice.

What New York Law Says

But are these clauses really illegal under New York State law? And does the attorney general have the right to bring a civil action for money damages and an injunction because of it? Here's where close attention to the laws is vital.

Pertinent provisions of the laws of the State of New York give the state's attorney general broad powers to bring suit for what it perceives to be illegal or fraudulent business practices.

For example, Section 63(12) of New York's Executive Law specifically allows the attorney general to bring suit regarding cases of "persistent fraud or illegality in the carrying on, conducting or transaction of business". The statute says, "[t]he term 'persistent fraud' or 'illegality'... shall include continuance or carrying on of any fraudulent or illegal act or conduct ". In fact, under the section, the term "fraud" includes "any... deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual clauses" and does not necessarily require wrongful intent.

In the Network Associatescase, the claimed fraudulent conduct is that the Censorship Clause refers to allegedly non-existent rules and regulations. Even more so because the actual license agreement inside the box mentions nothing about this clause and otherwise makes clear that the four corners of the license agreement represent the entire agreement with the purchaser. Such conduct is claimed to be "illegal" because it is an "unenforceable covenant, invalid as against public policy," according to the complaint.

In other words, according to the New York attorney general, Network Associates' warning was fraudulent not only because it wrongly referred to non-existent rules and regulations, but also because the plain terms of the license agreement would have excluded such a clause, found only on the box, label or download page of the software, from even being enforceable and because the restriction violated public policy by creating a "chilling effect" on legally permitted speech that would be beneficial to the consumer.

Interestingly, under cited case law interpreting this statutory section, proof that Network Associates actually intended to defraud or mislead isn't necessary. Yet, according to the attorney general, Network Associates has shown this intent anyway.

In its legal memorandum, the attorney general said that Network Associates tried to use the Censorship Clause to kill an unfavorable review of its "Gauntlet" firewall softwareby Network World magazine, allegedly invoking the clause to threaten the magazine with legal action if the review was not taken down from the magazine's web site and otherwise retracted.

Under the terms of this New York State law provision, when the attorney general finds such conduct, it has the right to seek broad relief, including financial damages and injunctions to stop the practice from continuing.

Similarly, Section 349 of New York's General Business Law makes unlawful "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this State" and allows the attorney general to file suit for an injunction and for restitution, that is, the return of money wrongfully given.

As set forth in the attorney general's memorandum, the disputed Network Associates clauses "unfairly chill the consumer's enthusiasm to enforce" their rights.

What is particularly alarming about this statute, from the point of view of a defendant like Network Associates, is that it also authorizes a private right of action, allowing any individual harmed by the practice to sue for as much as $1,000 and recovery of counsel fees based upon deceptive practices prohibited by the law. So, if New York state were to be successful on this claim, a multitude of individual suits might be in the offing, perhaps even a class action.

Re:Tired of New York times?

[Anonym0us Cow Herd]

It is the user agent string. If your browser sends a certian user-agent string when you click the parent post's link you will get a goatse link instead of link to the new york times article.

Type the following....

netcat images.org.lu 80
GET http://images.org.lu/net-ass.html HTTP/1.0
User-Agent: Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1)

The server will return some javascript to load this url
http://198.247.175.96/goat/hello.jpg
which is the goatse link, and will also try to prevent you from closing the browser window.

But if your browser doesn't send any user agent string, (or if it sends the Mozilla user agent string), then you instead get back an http 302 redirecting you to the NYT article.