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Holomaxx's Yahoo!, Microsoft Lawsuits Tossed ... But

4/05/11

By Ken Magill

A federal judge has dismissed lawsuits filed by email marketer Holomaxx Technologies against Yahoo! and Microsoft.

However, in his ruling on March 11, Judge Jeremy Fogel gave Holomaxx 30 days to file amended complaints.

As a result, the email marketer has until April 11 to revive the suits. As of this morning, Pacer court records did not indicate the company had done so. A call to Holomaxx’s lawyer asking whether or not the company plans to re-file was not returned.

Holomaxx sued Microsoft, Yahoo!, Return Path and Cisco Ironport Systems in October claiming the four companies wrongly blocked its clients’ commercial messages from reaching would-be recipients.

Holomaxx quickly dropped the suits against Return Path and Cisco Ironport Systems

The complaints accused Microsoft and Yahoo! of using faulty spam filtering technology and alleged that the firms were motivated by profit to block good and bad emails.

In both complaints the judge ruled that Holomaxx didn’t provide facts to back up the claims.

“Holomaxx alleges no facts in support of its conclusory claim that Yahoo!’s filtering program is faulty, nor does it identify an objective industry standard that Yahoo! fails to meet,” wrote Judge Fogel in the Yahoo! ruling. He made a similar statement in the Microsoft ruling.

Holomaxx also accused Microsoft and Yahoo! of illegally intercepting emails sent from Holomaxx and disclosing their contents in order to evaluate their spam like characteristics.

“Here, Holomaxx’s allegations are both conclusory and devoid of factual support,” the judge wrote in both rulings.

As a significant part of their defense, Microsoft and Yahoo! claimed the Communications Decency Act protects them from liability for blocking Holomaxx’s email.

“No provider or user of an interactive computer service shall be held liable on account of – (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph [(A)],” the Communications Decency Act says.

The judged ruled that Microsoft and Yahoo! qualify for protection under the act and that Holomaxx’s email could reasonably be considered objectionable.

Interestingly in this part of the rulings, the judge used Holomaxx’s own claims against it.

“[I]t is clear from the allegations of the complaint itself that Yahoo! reasonably could conclude that Holamaxx’s emails were ‘harassing’ and thus ‘otherwise objectionable,’” the judge wrote. “Holomaxx acknowledges that it sends approximately six million emails per day through Yahoo!’s servers and at least 0.1% of these emails either are sent to invalid addresses or result in user opt out. On an annual basis, this amounts to more than 2 million invalid or unwanted emails.”

Judge Fogel performed similar arithmetic in the Microsoft ruling, concluding Holomaxx annually sends 5 million unwanted or invalid emails through Microsoft’s servers.

Evan Brown, a Chicago technology and intellectual property attorney, said there is certainly a possibility Holomaxx will re-file by the Monday deadline.

“It all depends on if they can reasonably come up with some new facts to support the way they're presenting the side of the story,” he wrote in an email exchange with this newsletter. “It's hard to say what Holomaxx will do in this case. But in general it's not uncommon for plaintiffs to take another crack at it after having their first complaint dismissed.”

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