T Com Paris, 5th of may 2004, Microsoft Corp. & AOL France vs Mr K.

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Publié le 5 mai 2004

TRIBUNAL DE COMMERCE OF PARISEight Chamber, Decision entered on wednesday, May 5, 2004Microsoft Corp. & AOL France vs Mr K.DOCKET NO: 200309450012/17/2003CASE OPPOSING: Microsoft Corporation, a US corporation having its registered office at One Microsoft Way, 98052, Redmond, Washington State, USA, electing domicile at the office of SCP DEBETZ, attorneys, located at 20 Quai de…

TRIBUNAL DE COMMERCE OF PARIS

Eight Chamber, Decision entered on wednesday, May 5, 2004

Microsoft Corp. & AOL France vs Mr K.

DOCKET NO: 2003094500
12/17/2003

CASE OPPOSING: Microsoft Corporation, a US corporation having its registered office at One Microsoft Way, 98052, Redmond, Washington State, USA, electing domicile at the office of SCP DEBETZ, attorneys, located at 20 Quai de la Mégisserie 75001 Paris,

PLAINTIFF, having for trial attorney Maître Horn, attorney (K35), and for procedural attorney SCP DEBETZ, attorneys.

TO: Mr K., residing at A., carrying out a commercial activity under the trade name « K. » (registered with the Registry of Trade and of Companies of A. (…),

DEFENDANT, appearing in person.

CASE JOINED TO AND JUDGED UNDER:
Docket number: 2003094492
12/17/2003

CASE OPPOSING: SNC AOL FRANCE, having its registered office at 115/123 avenue Charles de Gaulle, 92525 Neuilly-sur-Seine (registered with the Registry of Trade and of Companies of Nanterre under the identification number 402 192 777),

PLAINTIFF, having for trial attorney SCP SALANS & Associés, attorneys (P372), and for procedural attorney SCP LYONNET BIGOT & Associés, attorneys (P458).

TO: Mr K., residing at A., carrying out a commercial activity under the trade name « K. » (registered with the Registry of Trade and of Companies of A. (…),

DEFENDANT, appearing in person.

AFTER DELIBERATIONS

THE FACTS

Mr. K. is a merchant registered with the Registry of Trade and Companies of A., whose activity consists in mail-order sales of football-related products under the trade name K..  In the context of this activity, Mr. K. set up two Internet sites: K(…).com and ka(…).com.

He then created websites and carried out e-mailing advertising campaigns for his customers within the scope of the K-(…).comsite.  In this aim, he took out at least 2 Internet access subscriptions with the access provider AOL, under different pseudonyms, on March 31, 2002 for the first and on November 12, 2002 for the second.

Advertising campaigns were carried out from MSN Hotmail email addresses opened by Mr. K., via the Internet access subscription taken out with AOL.

The AOL services in charge of enforcing compliance by subscribers with AOL’s general terms of use suspended Mr. K.’s subscription on June 10, 2003, after complaints from users who had been « spammed »; phenomenon defined by the CNIL as consisting in “the bulk, and at times duplicative, sending of unsolicited e-mails to persons with whom the sender has never been in contact and whose e-mail address he has obtained through irregular means.”

Microsoft, owner and operator of the MSN Hotmail service, also received numerous complaints from users having received spam from different MSN Hotmail addresses promoting a range of products and services.

The person or persons sending these e-mails accessed the Internet through AOL.

In performance of the orders entered by the président of the Tribunal de Grande Instance of Nanterre on October 16, 2003, AOL communicated to Microsoft the information it had concerning the identity of the subscriber behind these disputed e-mails.

Today, Microsoft has identified Mr. K. as the author of the spams at the origin of the complaints from the users of its e-mail service and characterizes Mr. K.’s course of conduct as unlawful and contrary to the terms of use of the MSN Hotmail service.

Like Microsoft, AOL considers that by his acts Mr. K. has breached the terms of the subscription agreements concluded with it.

Mr. K. contests the allegation of « spamming » by Microsoft and AOL.

This is how this dispute arose.

PROCEDURAL HISTORY

By writ of November 20, 2003, Microsoft sued Mr. K. and requested the Tribunal to:

· Declare and hold that, by addressing on a repeated basis unsolicited commercial solicitation e-mails from e-mail addresses opened with the MSN Hotmail service, Mr. K. breached the provisions of the terms of use of the MSN Hotmail service;

· Declare and hold that the course of conduct of Mr. K. caused Microsoft, in addition to financial harm, harm resulting from the damage thus caused to the image of its MSN Hotmail service;

Accordingly,

· Order Mr. K. to pay to Microsoft the amount of 50,000 euros in damages, without distinction as to counts of harm;

· Prohibit Mr. K., subject to a penalty of 5,000 euros per non-compliance ascertained from the service of the decision to be entered, from issuing from any e-mail address opened with MSN Hotmail service any e-mails contrary to the provisions of the terms of use of the MSN Hotmail service and notably e-mails of a commercial nature;

· Order the interim enforcement of the decision to be entered, notwithstanding any appeal and without any security being required;

· Order the publication of the decision to be entered, in full or in part, in five print or on-line magazines or publications, at the choice of Microsoft and at the expense of Mr. K., within a limit of 5,000 euros per publication;

· Order the display, by Mr. K. and at his expense, of the holding section of the decision to be entered, upon service thereof, at the top of the home page – and on a surface area equal to at least 50% of it –  of Mr. K.’s ka(…).com and K-(…).com websites, as well as on all other websites that may be substituted thereto and this for a period of 6 months and subject to a penalty of 5,000 euros per day of continuing non-compliance by the website concerned;

· Order Mr. K. to pay to Microsoft the amount of 10,000 euros on the basis of Article 700 of the Code of Civil Procedure;

· Order Mr. K. to pay for all costs.

By act of November 21, 2003, AOL France became a voluntary intervener in the lawsuit brought by Microsoft and requested the Tribunal to:

· Accept AOL as a voluntary intervener in the lawsuit between Microsoft and Mr. K., and adjudicating both on the main claim and on its claims as an intervener;

· Declare and hold that, by addressing on a repeated basis unsolicited commercial solicitation e-mails via the AOL service, Mr. K. breached the provisions of AOL’s General Terms of Use, as well as the rules of on-line conduct;

· Declare and hold that the course of conduct of Mr. K. caused AOL, in addition to financial harm, harm resulting from the damage thus caused to the image of its service;

Accordingly,

· Order Mr. K. to pay to AOL the amount of 50,000 euros in damages, without distinction as to counts of harm;

· Prohibit Mr. K., subject to a penalty of 5,000 euros per non-compliance ascertained from the service of the decision to be entered, from issuing from any AOL account opened in his name or that of persons close to him any unsolicited e-mails of a commercial nature or otherwise which are contrary to the terms of use of AOL’s service;

· Order the interim enforcement of the decision to be entered, notwithstanding any appeal and without any security being required;

· Order the publication of the decision to be entered, in full or in part, in 5 print or on-line magazines or publications, at the choice of AOL and at the expense of Mr. K., within a limit of 5,000 euros per publication;

· Order the display, by Mr. K. and at his expense, of the holding section of the decision to be entered, upon service thereof, at the top of the home page – and on a surface area equal to at least 50% of it –  of Mr. K.’s ka(…).com and K-(…).com websites, as well as on all other websites that may be substituted thereto and this for a period of 6 months and subject to a penalty of 5,000 euros per day of continuing non-compliance by the website concerned;

· Order Mr. K. to pay to AOL the amount of 10,000 euros on the basis of Article 700 of the Code of Civil Procedure;

· Order Mr. K. to pay for all costs.

Mr. K. was present at the collegial hearing of February 11, 2004 and communicated a copy of his observations in defense which he dispatched to Microsoft and to AOL by registered letters with return notice on December 12, 2003 and February 2, 2004 by which he requests the dismissal of all of the claims made by both companies.

By recapitulative and responsive brief in reply of February 11, 2004, Microsoft and AOL reiterated their written pleadings, and added thereto:

– Microsoft also requests the Tribunal to order Mr. K., subject to a penalty of 1,000  euros per day of continuing non-compliance from the service of the decision to be entered, to show proof of his current address by producing any recent official documents.

– AOL requests the Tribunal to prohibit Mr. K., subject to a penalty of 5,000 euros per non-compliance ascertained from the service of the decision to be entered, from subscribing to an AOL account, in his own name or under a borrowed name.

The parties were all present and/or represented at the hearing held by the juge-rapporteur on March 24, 2004 when Mr. K. presented his latest observations, which he had previously communicated to the juge rapporteur by letter of March 11, 2004.  The trial phase was closed at this March 24, 2004 hearing.

ARGUMENTS OF THE PARTIES

Microsoft submits that:

Mr. K.’s course of conduct incurs his contractual liability under Article 1147 of the Civil Code as constituting a breach of the terms of use of its MSN Hotmail service and thus of the agreement concluded with Microsoft.

Indeed, Mr. K. is bound by the terms of use of the Hotmail service, acceptance of which is required to register for the service and obtain an e-mail address.

Mr. K., to create his Hotmail addresses, necessarily clicked on the acceptance button for the terms of use.

The terms of acceptance [of the MSN Hotmail service] are perfectly clear as to the prohibition of sending spam (unsolicited e-mail, unwanted or duplicative messages) from Hotmail addresses and as to the non-commercial use of this service.

It is thus prohibited to use the e-mail service for commercial purposes, notably to advertise any commercial activity, product or service whatsoever. 

By sending spams to Internet users from the Hotmail e-mail addresses t(…)@hotmail.com; t_(…)@hotmail.com; b(…)@hotmail.com and d(…)@hotmail.com and by using the service for commercial ends to promote various products or services such as mail-order sales of electric scooters or a method to improve one’s chances of winning in gambling games, Mr. K. flagrantly breached the terms of use of the Hotmail service.

AOL submits that:

Mr. K. deliberately and repeatedly breached the Internet access subscription agreement subscribed with it.

Subscription is formalized by an on-line acceptance of the terms of use of the service, which the user is required to read before validating his subscription.

Mr. K. is thus bound by these terms of use since their express acceptance was the condition for his registration.

The contractual terms prohibit use of his AOL account to sent bulk unsolicited e-mails.  Any breach of this obligation gives AOL a right of immediate termination, without notice.

Mr. K., who took out several AOL subscriptions, states in connection with the termination for material breach that friends used his account to send unsolicited e-mails without his authorization.  However, the terms of use expressly provide that the [account] holder is deemed responsible for all use of his account and that he may not grant other persons the right to use his account without AOL’s prior written authorization.

In addition, several affidavits from Internet users allow AOL to establish that several spams were sent by Mr. K. despite the warnings and notices given to him concerning the unlawful nature of his conduct.
Mr. K. contests any breach of contract whatsoever as well as the charges of spamming against him.

First, [he argues that] the contracts asserted by Microsoft and AOL are virtual as they do not require the signature of a written agreement.  Furthermore, the terms of use are intentionally long so as to dissuade the user from reading the document in full.  Mr. K. [submits that he] is therefore not bound by any valid contractual obligation.

Second, since a warning by the CNIL, the K-(…).com site has completely stopped any sending of advertising e-mails for commercial purposes since September 2003.  Messages sent subsequently were from persons in his circle who used his AOL account without his knowledge.  Indeed, it is possible to have up to 7 addresses with the same account, to log on using any telephone line and thus to share an account with 6 other persons.

AOL’s statement concerning the personal nature of the subscription is thus not substantiated and Mr. K.’s liability, in respect of e-mails he did not send, cannot be incurred.

Lastly, [he submits that] Microsoft and AOL’s allegation of spamming is false as Mr. K. used a customer list which was sold to him by Optima, of the « opt in » type, and which only contains the addresses of persons having accepted to receive e-mails.

These persons could at all times have refused new e-mails by answering « STOP » to the message sent.

In response to Microsoft’s request, Mr. K. states that both his personal and his professional address is that of his father, Mr. G. K., at A. (…).

IN RESPECT OF WHICH, the TRIBUNAL

On the joining of the proceedings by AOL as a voluntary intervener

Whereas AOL’s claims have a sufficient connection with those of Microsoft, the Tribunal shall thus accept AOL’s motion to act as a voluntary intervener and adjudicate on its claims at the same time as those of Microsoft.

On the domicile of Mr. K.

The Tribunal shall take due note of the statements by Mr. K. and shall declare that any service of process to be made shall be duly served at the domicile of his father, Mr. Mr. G. K., at A. (…)

On Mr. K.’s contractual liability

Whereas Microsoft establishes having received, in September 2003, numerous complaints from Internet users having received spams from several Hotmail addresses accessing the Internet via AOL; whereas it establishes that these addresses were opened by Mr. K. and by persons close to him thanks to the analysis of information communicated by AOL in performance of the orders rendered by the président of the Tribunal de Grande Instance of Nanterre on October 16, 2003; whereas Mr. K. himself recognizes, in his letter of December 15, 2003, having sent spams from his AOL and Hotmail accounts;

Whereas the agreements, as much that of Microsoft as of AOL, expressly reserve the services provided for personal use and prohibit commercial use as well as spamming (pages 2 and 3 of MSN’s Terms of Use, clauses « Personal and non-commercial use” and « Use of services »; and section 5-4 of AOL’s Terms of Use).  Mr. K. cannot claim not being bound by these provisions which he necessarily accepted by subscribing to the on-line agreements; these agreements were indeed passed in writing within the meaning of Articles 1316 et seq. of the Civil Code;

Whereas AOL also establishes having received numerous complaints from Internet users having received spams from addresses opened by Mr. K. under various pseudonyms. Section 2-2 of the General Terms of the agreement provides that the pseudonyms are personally granted to the account holder, who cannot assign its use without AOL’s prior authorization.  Mr. K. is therefore responsible for the use of his account, whether such use is made by him or by third parties, as he submits was partially the case.

Whereas AOL proceeded to close the accounts opened by him or by his mother, Mrs. K., in accordance with the contractual provisions, section 10-2 of the General Terms allowing it the possibility of unilateral termination, without notice or warning, in case of serious breach by the account holder;

The Tribunal will declare that Mr. K. breached the contractual provisions binding him to Microsoft and to AOL.

On the claim for damages

Whereas Microsoft and AOL request that Mr. K. be ordered to pay each of them the amount of 50,000 euros in damages, of which 15,000 euros on the basis of the financial and human resources they have had to deploy to fight spamming and 35,000 euros in compensation for the damage to their reputation.

Whereas neither of the two companies has provided any element allowing assessing their financial injury which cannot, nevertheless, be excluded.

Whereas, moreover, Mr. K.’s acts of spamming damage the image of the services provided by Microsoft and AOL, notably the credibility of the [anti-spam] measures put in place by the plaintiffs as well as their reputation concerning the efficiency of the measures taken to enforce compliance with their general terms of use.

The Tribunal, using its discretionary power, shall order Mr. K. to pay each of the plaintiffs the amount of 5,000 euros in damages for all of the damage caused.

On the accessory claims

Whereas the accessory claims for injunctive relief and publication of the decision to be entered appear warranted in principle in view of the facts of the case, the Tribunal shall grant them pursuant the terms of its holding below and reject any claim beyond this.

On the claim for interim enforcement

Whereas interim enforcement is requested for all of the provisions of this decision, as specified by Microsoft and AOL’s attorneys at the hearing on March 24, 2004 by the juge rapporteur.

Whereas the Tribunal only considers the claim for injunctive relief prohibiting Mr. K. from sending new spam to be necessary.

The Tribunal shall accordingly order interim enforcement on this count only.


On application of Article 700 of the Code of Civil Procedure and the costs

Article 700 claim by Microsoft

Whereas Microsoft has had, in view of having its rights recognized, to incur expenses, not included in the costs, which it would be inequitable to leave at its charge.

Whereas it is warranted to award it, in application of Article 700 of the Code of Civil Procedure, an indemnity of 3,000 euros, and reject any claim for a higher amount.

Article 700 claim by AOL

Whereas AOL has had, in view of having its rights recognized, to incur expenses, not included in the costs, which it would be inequitable to leave at its charge.

Whereas it is warranted to award it, in application of Article 700 of the Code of Civil Procedure, an indemnity of 3,000 euros, and reject any claim for a higher amount.

Costs

Mr. K. shall be ordered to pay for the costs.

FOR THESE REASONS

The Tribunal, ruling in open court, in the first instance, in a single decision in adversarial proceedings:

– Orders the joinder of the cases.

– Accepts SNC AOL France’s motion to act as voluntary intervener.

– Takes note of Mr. K.’s statements concerning his personal and professional domicile, and declares that any service of process in connection with this decision shall be validly served at the address of Mr. G. K., A..

– Declares that the main claims by Microsoft Corporation and SNC AOL France are warranted in part.

– Orders Mr K. to pay 5,000 euros in damages to Microsoft Corporation and 5,000 euros in damages to SNC AOL France; and dismisses any claims beyond this amount.

– Issues an injunction against Mr K., subject to a penalty of 1,000 euros per non-compliance ascertained from the service of this decision:

* From issuing from any e-mail address opened with the MSN Hotmail service any e-mails contrary to the provisions of the terms of use of the MSN Hotmail service and in particular e-mails of a commercial nature;
 
* From subscribing, in his own name or under a borrowed name, an AOL account;

* From issuing, from any AOL account opened in his name or that of persons close to him unsolicited e-mails, of a commercial nature or otherwise, which are contrary to the terms of use of the AOL service.

– Orders the publication of this decision, in full or in part, in three magazines or newspapers, in paper or on-line format, at the choice of Microsoft Corporation and AOL France and at the expense of Mr. K. within the limit of 1,500 euros per publication;

– Orders the publication by Mr K. and at his expense of the holding section of this decision at the top of the welcome page of the Ka(…).com and K.c.com Internet sites for a period of three months;

– Dismisses any more ample or contrary claims respectively made by the parties;

– Orders interim enforcement of this decision, solely as concerns the injunction against Mr K. from issuing e-mails of a commercial nature;

– Orders Mr K. to pay for all costs, including those payable to the court registry, liquidated in the amount of 41.35 euros inclusive of tax (VAT: 6.15 euros), as well as to pay to SA Microsoft Corporation and to SNC AOL France the amount of 3,000 euros each on the basis of Article 700 of the Code of Civil Procedure.

Case entrusted at the hearing of February 25, 2004 to Mrs. Felaco, in her capacity as Juge-Rapporteur.

Case placed in deliberation on March 24, 2004.

Deliberated by Mrs. Felaco, Messrs. Laubie, Fraiberger and decision pronounced in open court, with in attendance:

Mrs. Robert, Président, Mrs. Leprovost and Mr. Fraiberger, Judges, assisted by Mrs. Lelievre, Clerk, following due notification to the parties.

The original copy of this decision is signed by the Président and by the Clerk.

Accordingly, the Republic of France mandates and orders all Official Process-Servers, upon this requisition, to enforce this decision, all Procureurs Généraux and Procureurs de la République of all Tribunaux de Grande Instance to provide their assistance, and all Police Commanders and Officers to provide their assistance, when legally required to do so.

Certified true copy for SERVICE
Enforceable Order

[s/illegible]

Copy delivered on: Thursday, May 13, 2004