CompuServe Incorporated,
Plaintiff,
v.
Cyber Promotions, Inc. and Sanford Wallace,

Defendants.
Case No. C2-96-1070
February 3, 1997

MEMORANDUM OPINION AND ORDER

JUDGE GRAHAM:

This case presents novel issues regarding the commercial use of the Internet, specifically the right of an online computer service to prevent a commercial enterprise from sending unsolicited electronic mail advertising to its subscribers.

Plaintiff CompuServe Incorporated (“CompuServe”) is one of the major national commercial online computer services. It operates a computer communication service through a proprietary nationwide computer network. In addition to allowing access to the extensive content available within its own proprietary network, CompuServe also provides its subscribers with a link to the much larger resources of the Internet. This allows its subscribers to send and receive electronic messages, known as “e-mail,” by the Internet. Defendants Cyber Promotions, Inc. and its president Sanford Wallace are in the business of sending unsolicited e-mail advertisements on behalf of themselves and their clients to hundreds of thousands of Internet users, many of whom are CompuServe subscribers. CompuServe has notified defendants that they are prohibited from using its computer equipment to

PAGE 2

process and store the unsolicited e-mail and has requested that they terminate the practice. Instead, defendants have sent an increasing volume of e-mail solicitations to CompuServe subscribers. CompuServe has attempted to employ technological means to block the flow of defendants’ e-mail transmissions to its computer equipment, but to no avail.

This matter is before the Court on the application of CompuServe for a preliminary injunction which would extend the duration of the temporary restraining order issued by this Court on October 24, 1996 and which would in addition prevent defendant from sending unsolicited advertisements to CompuServe subscribers.

For the reasons which follow, this Court holds that where defendants engaged in a course of conduct of transmitting a substantial volume of electronic data in the form of unsolicited e-mail to plaintiff’s proprietary computer equipment, where defendants continued such practice after repeated demands to cease and desist, and where defendants deliberately evaded plaintiff’s affirmative efforts to protect its computer equipment from such use, plaintiff has a viable claim for trespass to personal property and is entitled to injunctive relief to protect its property.

I.

The Court will begin its analysis of the issues by acknowledging, for the purpose of providing a background, certain findings of fact recently made by another district court in a case involving the Internet:

1. The Internet is not a physical or tangible entity, but rather a giant network which interconnects innumerable smaller groups of linked computer networks. It is thus a network of networks. . . .

2. Some networks are “closed” networks, not linked to other computers or networks. Many networks, however, are connected to other networks, which are in turn connected to other networks in a manner which permits each computer in any network to communicate

PAGE 3

with computers on any other network in the system. This global Web of linked networks and computers is referred to as the Internet.

3. The nature of the Internet is such that it is very difficult, if not impossible, to determine its size at a given moment. It in indisputable, however, that the Internet has experienced extraordinary growth in recent years. . . . In all, reasonable estimates are that as many as 40 million people around the world can and do access the enormously flexible communication Internet medium. That figure is expected to grow to 200 million Internet users by the year 1999.

4. Some of the computers and computer networks that make up the network are owned by governmental and public institutions, some are owned by non-profit organizations, and some are privately owned. The resulting whole is a decentralized, global medium of communications–or “cyberspace”–that links people, institutions, corporations, and governments around the world. . . .
. . . .
11. No single entity-academic, corporate, governmental, or non-profit administers the Internet. It exists and functions as a result of the fact that hundreds of thousands of separate operators of computers and computer networks independently decided to use common data transfer protocols to exchange communications and information with other computers (which in turn exchange communications and information with still other computers). There is no centralized storage location, control point, or communications channel for the Internet, and it would not be technically feasible for a single entity to control all of the information conveyed on the Internet.

American Civil Liberties Union v. Reno, 929 F. Supp. 824, 830-832 (E.D. Pa. 1996). In 1994, one commentator noted that “advertisements on the current Internet computer network are not common because of the network’s not-for-profit origins.” Trotter Hardy, The Proper Legal Regime for “Cyberspace”, 55 U. Pitt. L. Rev. 993, 1027 (1994). In 1997, that statement is no longer true.

Internet users often pay a fee for Internet access. However there is no per-message charge to send electronic messages over the Internet and such messages usually reach their destination within minutes. Thus electronic mail provides an opportunity to reach a wide audience quickly and

PAGE 4

at almost no cost to the sender. It is not surprising therefore that some companies, like defendant Cyber Promotions, Inc., have begun using the Internet to distribute advertisements by sending the same unsolicited commercial message to hundreds of thousands of Internet users at once. Defendants refer to this as “bulk e-mail,” while plaintiff refers to it as “junk e-mail.” In the vernacular of the Internet, unsolicited e-mail advertising is sometimes referred to pejoratively as “spam.”[1]

CompuServe subscribers use CompuServe’s domain name “CompuServe.com” together with their own unique alphanumeric identifier to form a distinctive e-mail mailing address. That address may be used by the subscriber to exchange electronic mail with any one of tens of millions of other Internet users who have electronic mail capability. E-mail sent to CompuServe subscribers is processed and stored on CompuServe’s proprietary computer equipment. Thereafter, it becomes accessible to CompuServe’s subscribers, who can access CompuServe’s equipment and electronically retrieve those messages.

Over the past several months, CompuServe has received many complaints from subscribers threatening to discontinue their subscription unless CompuServe prohibits electronic mass mailers from using its equipment to send unsolicited advertisements. CompuServe asserts that the volume of messages generated by such mass mailings places a significant burden on its equipment which has finite processing and storage capacity. CompuServe receives no payment from the mass mailers for processing their unsolicited advertising. However, CompuServe’s subscribers pay for their access to CompuServe’s services in increments of time and thus the process of accessing, reviewing and discarding unsolicited e-mail costs them money, which is one of the reasons for their complaints.

PAGE 5

CompuServe has notified defendants that they are prohibited from using its proprietary computer equipment to process and store unsolicited e-mail and has requested them to cease and desist from sending unsolicited e-mail to its subscribers. Nonetheless, defendants have sent an increasing volume of e-mail solicitations to CompuServe subscribers.

In an effort to shield its equipment from defendants’ bulk e-mail, CompuServe has implemented software programs designed to screen out the messages and block their receipt. In response, defendants have modified their equipment and the messages they send in such a fashion as to circumvent CompuServe’s screening software. Allegedly, defendants have been able to conceal the true origin of their messages by falsifying the point-of-origin information contained in the header of the electronic messages. Defendants have removed the “sender” information in the header of their messages and replaced it with another address. Also, defendants have developed the capability of configuring their computer servers to conceal their true domain name and appear on the Internet as another computer, further concealing the true origin of the messages. By manipulating this data, defendants have been able to continue sending messages to CompuServe’s equipment in spite of CompuServe’s protests and protective efforts.

Defendants assert that they possess the right to continue to send these communications to CompuServe subscribers. CompuServe contends that, in doing so, the defendants are trespassing upon its personal property.

II.

The grant or denial of a motion for preliminary injunction rests within the discretion of the trial court. Deckert v. Independence Shares Corp., 311 U.S. 282 (1940). In determining whether a motion for preliminary injunction should be granted, a court must consider and balance four factors:

PAGE 6

(1) the likelihood that the party seeking the preliminary injunction will succeed on the merits of the claim; (2) whether the party seeking the injunction will suffer irreparable harm without the grant of the extraordinary relief; (3) the probability that granting the injunction will cause substantial harm to others; and (4) whether the public interest is advanced by the issuance of the injunction. Washington v. Reno, 35 F.3d 1093, 1099 (6th Cir. 1994); International Longshoremen’s Assoc. v. Norfolk S. Corp., 927 F.2d 900, 903 (6th Cir. 1991). None of these individual factors constitute prerequisites that must be met for the issuance of a preliminary injunction, they are instead factors that are to be balanced. In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985). A preliminary injunction is customarily granted on the basis of procedures that are less formal and evidence that is less complete than in a full trial on the merits. Indeed, “[a] party. . . is not required to prove his case in full at a preliminary injunction hearings.” University of Texas v. Camenisch, 451 U.S. 390, 395 (1981).

III.

This court shall first address plaintiff’s motion as it relates to perpetuating the temporary restraining order filed on October 24, 1996. That order enjoins defendants from:
(i) Using CompuServe accounts or CompuServe’s equipment or support services to send or receive electronic mail or messages or in connection with the sending or receiving of electronic mail or messages;

(ii) Inserting any false reference to a CompuServe account or CompuServe account or equipment in any electronic message sent by Defendants; and

(iii) Falsely representing or causing their electronic mail or messages to bear the representation that any electronic mail or message sent by Defendants was sent by or originated from CompuServe or a CompuServe account.

PAGE 7

(Temporary Restraining Order at 4).

As a general matter, the findings of this Court enunciated in its temporary restraining order are applicable to the request for preliminary injunction now at issue. The behavior described in subsections (ii) and (iii) of the temporary restraining order would be actionable as false representations or descriptions under Section 43(a) of the Lanham Act, 15 U.S.C. Section 1125(a). Also, the same behavior is actionable under the Ohio Deceptive Trade Practices Act, Ohio Rev. Code Section 4165(B) and (D).

Defendants argue that the restrictions in the temporary restraining order are no longer necessary because defendants no longer have a CompuServe account. That being the case, a preliminary injunction perpetuating the prescribed activity articulated in subsection (i) of the temporary restraining order will present no hardship at all to defendants. Next, it does not appear that defendants would need to have a CompuServe account to perpetrate the prescribed acts articulated in subsections (ii) and (iii) of the temporary restraining order. Therefore, the fact that defendants no longer have an account with plaintiff does not vitiate the need which CompuServe has demonstrated for an injunction prescribing the acts set forth in those subsections.

For the foregoing reasons and the reasons articulated in the temporary restraining order issued by this Court, defendants Cyber Promotions, Inc. and its president Sanford Wallace are hereby enjoined from performing any of the acts therein described during the pendency of this litigation.

IV.

This Court will now address the second aspect of plaintiff’s motion in which it seeks to enjoin defendants Cyber Promotions, Inc. and its president Sanford Wallace from sending any unsolicited advertisements to any electronic mail address maintained by CompuServe.

PAGE 8

Click Here to Download Complete Document in pdf.