Hartford House, Ltd. v. Microsoft Corporation, et al.
Case No. CV 778550 (Sup. Ct. Ca., December 8, 1998)
Plaintiff, which does business under the name Blue Mountain Arts ("Blue Mountain"), operates a web site at which it makes available for free to the general public greeting cards for transmission via e-mail. To send a card, according to plaintiff's complaint, a visitor to plaintiff's site selects and personalizes the card she wishes to send, supplies both her e-mail address and that of the recipient, and clicks on the site's send button. This causes Blue Mountain to send an e-mail containing the selected card to the designated recipient that indicates it is from the user and not Blue Mountain.
According to Blue Mountain, it profits from this endeavor by displaying various advertisements to those in the process of sending its greeting cards, for which it receives compensation from third parties. Plaintiff's complaint alleged that in or about November 1998, defendant Microsoft Corporation ("Microsoft") opened a competing greeting card web site. At approximately the same time, Microsoft released a beta version of its popular Internet Explorer browser that was bundled with an e-mail program named "Outlook Express." Prior to the release of this software, individuals using the e-mail products Microsoft bundled together with Internet Explorer had no difficulty receiving Blue Mountain greeting cards. According to plaintiff, such was not the case, however, for those using the beta versions of the software in question. This version of Outlook Express contains an e-mail filter which relegates certain e-mail to a junk mail folder for immediate discard, including, according to Blue Mountain, e-mail containing its greeting cards. The complaint alleged that Microsoft caused Outlook Express to treat Blue Mountain greeting cards as junk mail "... with the specific intent to interfere with and disrupt Blue Mountain's ability to attract and serve its customers [and] to perform its agreements ...". Blue Mountain alleged that defendant Microsoft's conduct constituted unfair competition in violation of both California Business and Professions Code Section 17200 and common law, intentional interference with contract and prospective economic advantage and trade libel.
Plaintiff moved for a temporary restraining order to stop this disruption of its service. In the brief submitted in support of this motion, plaintiff elaborated on its unfair competition claim. Under Section 17200, "unfair competition shall mean and include any unlawful, unfair or fraudulent business practice or act ...". According to plaintiff "unfair simply means any practice whose harm to the victim outweighs its benefits." Plaintiff argued that "'breaking' a competitor's product, or relegating legitimate commerce and personal correspondence to a 'junk folder,' is simply unfair to Blue Mountain and its customers" and therefore constitutes impermissible unfair competition in violation of Section 17200.
Without explaining its reasoning, the court issued the injunctive relief sought by plaintiff. The court's Order grants a temporary restraining order mandating that Microsoft: (1) provide Blue Mountain with sufficient information to permit it to design its greeting cards so that they are received by the intended recipient in their standard e-mail in-box and are not relegated to a junk mail folder; and (2) post a notice warning users that Outlook Express contains a junk e-mail filter that may place legitimate e-mail such as greeting cards in a junk mail folder.
