AOL v. Wrhel, et al.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

NATURE OF PLAINTIFF'S CLAIMS

1. Defendants and parties acting in concert with them have repeatedly bombarded AOL and its members with tens of thousands of deceptive, unsolicited, and unwanted Internet electronic mail ("e-mail") messages advertising pornographic CD-ROMs and cut-rate "virtual girlfriend" and "virtual boyfriend" software that allows purchasers to "Watch and participate in the hottest sexual activities available on computer," web sites where such materials are available, and directories of celebrities' home addresses. Defendants and their agents have indiscriminately transmitted their pornographic junk e-mail through the Internet to AOL without regard to the fact that many underage AOL members receive these unwanted advertisements for defendants' sexually explicit materials and web sites. Despite demands by AOL that they cease sending their unwanted and unsolicited junk e-mail, defendants have refused to stop these junk mass e-mailings and have persisted in using deceptive techniques designed to frustrate AOL's ability to detect and filter their junk e-mail messages. Among other things, the defendants forge "aol.com" within their e-mail messages so the messages falsely appear to originate from an AOL member. The use of "aol.com" creates the misperception among AOL members that AOL permits and condones the highly criticized and disfavored practice of sending unsolicited bulk e-mail. Defendants' junk e-mail has resulted in thousands of member complaints and clogs AOL's computers and computer system, co-opting valuable computer and staff resources needed to deliver authorized Internet e-mails.

2. Defendants' indiscriminate mass mailings and deceptive practices cause serious and irreparable injury to AOL by impairing the functioning of AOL's e-mail system and harming AOL's business reputation and goodwill among its members. Defendants have violated the Computer Fraud and Abuse Act (18 U.S.C. § 1030), the Lanham Act (15 U.S.C. § 1051 et seq.), the Washington State Unsolicited Commercial Electronic Mail Act, and trespassed upon and converted AOL's personal property in violation of California common law. Defendants have also been unjustly enriched at AOL's expense.

3. AOL has demanded that defendants stop their mass junk mailings and has tried to stop defendants' misappropriation of its computers and computer system through technical means, but its attempts at self-help have proven unsuccessful. By this action, AOL seeks an injunction to prevent further unlawful conduct, and compensatory and punitive damages. AOL also asks that a constructive trust be imposed in favor of AOL on all monies received by the defendants as a result of their bulk e-mail activities.

JURISDICTION AND VENUE

4. This is an action for violations of the Computer Fraud and Abuse Act (Id.) 18 U.S.C. § 1030), the Lanham Act (15 U.S.C. § 1051 et seq.), the Washington State Unsolicited Commercial Electronic Mail Act; trespass to chattels, conversion, civil conspiracy and unjust enrichment.

5. This Court has jurisdiction over the subject matter pursuant to 28 U.S.C. §§ 1331 and 1338, and supplemental jurisdiction over plaintiff's state law claims pursuant to 28 U.S.C. § 1367.

6. This Court also has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332, as this action is between citizens of different states, and the amount in controversy exceeds the sum or value of $75,000, exclusive of interest or costs.

7. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391(b) in that defendants reside in this judicial district and a substantial part of the events giving rise to the claims occurred in this judicial district.

AOL

8. Plaintiff AOL is a corporation organized and existing under the laws of the State of Delaware with its principal place of business at 22000 AOL Way, Dulles, Virginia 20166. AOL is an Internet service provider ("ISP") that provides a proprietary, content-based online service. AOL maintains computers and other devices that enable its members to obtain various services, including access to the Internet. Its central computer system, which includes specialized computers (called "servers") that process e-mail messages, is located in Reston, Virginia. E-mail sent to and from AOL members is processed through and stored on these computers. AOL's computers likewise provide the functionality for, and maintain the content of, the AOL service provided throughout the United States and abroad.

9. AOL has used as a trademark and as a service mark the initials "AOL," in various forms and styles, continuously in commerce to identify its products and services since October 1989. This mark has been registered as a trademark upon the Principal Register of the United States Patent and Trademark Office as United States Registration No. 1,984,337, registered July 2, 1996. The mark has been registered as a service mark upon the Principal Register of the United States Patent and Trademark Office as United States Registration No. 1,977,731, registered June 4, 1996. These registrations are attached at Exhibit A hereto.

10. AOL has invested substantial resources to promote and protect the AOL trademark and service mark in connection with the interstate and worldwide sale of its products and services.

11. AOL has registered the domain name "aol.com" with the InterNIC, the organization that assigns and maintains directories of Internet addresses. This domain name is used extensively in interstate commerce and is recognized worldwide as a source identifier of AOL's online services.

Defendants

12. On information and belief, defendant Christopher Mark Wrhel (a/k/a Mark Wrhel and Bruce Nichols), d/b/a Chris Mark Software, C & M Promotions, and SMD Inc., is an individual residing in Los Angeles County at 10500 Sherman Grove Avenue, Sunland, California.

13. On information and belief, defendant Barry Hale (a/k/a Bruce Nichols), d/b/a Big B Software and VR Horizon, is an individual residing in Los Angeles County at 10143 Plainview Avenue, Tujunga, California.

14. On information and belief, defendant Teresa Hale (a/k/a Teresita Hale), d/b/a Big B Software and VR Horizon, is an individual residing in Los Angeles County at 10143 Plainview Avenue, Tujunga, California.

15. On information and belief, defendant Sergio Hale (a/k/a Bruce Nichols), d/b/a Big B Software and VR Horizon, is an individual residing in Los Angeles County at 10043 Plainview Avenue, Tujunga, California.

16. On information and belief, defendant Ryan Hale (a/k/a Bruce Nichols), d/b/a Big B Software and VR Horizon, is an individual residing in Los Angeles County at 10043 Plainview Avenue, Tujunga, California.

17. On information and belief, defendant Jared Thorp (a/k/a Bruce Nichols), d/b/a SMD Inc., is an individual residing in Los Angeles County at 10710 Turnbow Drive, Sunland, California.

18. On information and belief, defendant Andrew D. Faulstich (a/k/a Bruce Nichols) d/b/a SMD Inc., is an individual residing in Los Angeles County at 10710 Turnbow Drive, Sunland, California.

19. On information and belief, the above-named defendants are acting in concert with one another and with other individuals in doing the acts alleged in this complaint. "Defendants" shall refer hereinafter to the above-named defendants and all individuals acting in concert with them.

The Internet

20. Defendants committed the acts complained of herein through the use of the electronic messaging capabilities of the Internet. The Internet is a complex "network of networks" that interconnects innumerable smaller groups of linked computers. All of the networks comprising the Internet are connected in a manner that permits any computer on the Internet to communicate with any other computer on the Internet. Some of the components of the Internet are owned by governmental organizations; however, AOL is a proprietary, content-based internet service provider ("ISP") that owns and operates a domain site consisting of computers and other devices that enable its members to gain access to the Internet and to send and receive e-mail over the Internet.

21. The Internet makes it possible for a user to exchange e-mail messages rapidly with other Internet users in the United States and abroad. E-mail can normally be sent virtually instantaneously from one individual to another, or from an individual user to a large group of addresses. The Internet's e-mail functionality makes it possible for a sender easily to transmit tens and even hundreds of thousands of copies of a single message.

22. The InterNIC, a consortium funded by the National Science Foundation, is responsible for assigning the unique addresses used by computers to communicate through the Internet. These unique addresses are referred to as Internet Protocol ("IP") addresses. Like the unique street addresses and telephone numbers used by individuals and businesses for their mail and telephone communications, IP addresses ensure orderly communications between computer networks on the Internet. An IP address consists of 4 sets of up to 3 numbers in the following format: 123.123.123.123.

23. The InterNIC also assigns "domain" names to individuals, businesses, and organizations using the Internet. Domain names function as convenient shorthand IP addresses, giving Internet users the option of using readily understandable proper names to identify themselves and their communications, rather than cumbersome twelve-digit IP addresses. Businesses are typically assigned domain names with the ".com" designation (e.g., "aol.com"), while educational and governmental organizations usually are assigned ".edu" and ".gov" domain names (e.g., "topuniversity.edu" and "federalagency.gov"). Because each domain name corresponds to a unique IP address, the InterNIC performs the important task of maintaining the directories that allow computers connected to the Internet to find the appropriate IP address for a particular domain requested by a user.

24. An e-mail address consists of a name corresponding to the individual user's account (the "user name") and the name of the domain within which the user's account is located, separated by the "@" symbol (e.g., "jdoe@company.com").

25. E-mail messages contain "headers," generated by the sender's ISP, which identify the sender's return e-mail address, the message's "subject," and other information related to the transmission of the e-mail message (such as the date, time, and routing information). AOL's system is configured such that these "headers" are excerpted at the beginning of each message and appear in full text at the conclusion of the message.

26. A sender who wishes to conceal his true identity and e-mail address can falsify the header information in his e-mail transmissions or manipulate the information used in the electronic header. Various "stealth" software programs, designed for and marketed to the senders of junk e-mail, facilitate the falsification of e-mail header information in mass mailings.

27. The World Wide Web (the "Web") is an aspect of the Internet that allows Internet users to visit "web sites" where they can view text and/or pictorial content. A significant feature contributing to the Web's popularity among Internet users is its "linking" capability. E-mail messages may be embedded with "hypertext links" to web sites that allow Internet users to move quickly to and from web sites of interest through the single click of a computer mouse.

Unsolicited Junk E-Mail

28. It costs virtually nothing for an individual sender to transmit an e-mail message, regardless of the number of recipients. Considerable resources are expended by the ISP at the receiving end, however, storing, sorting, and delivering the e-mail.

29. Although the sender of junk mail sent through the postal system must pay the costs of delivery through the purchase of stamps, there are no stamps on the Internet. Instead, the costs of storing, sorting, and delivering junk e-mail are borne -- involuntarily -- by the recipient's ISP, and the recipients themselves. When computer and staff resources are consumed by massive batches of junk e-mail, known colloquially as "spam", the delivery of legitimate, authorized e-mail is often impaired.

30. Bulk e-mailers, or "spammers," engage in the practice precisely because the medium permits them to shift their marketing costs onto the recipients' ISPs, such as AOL. The ability to send junk e-mail from "throw away" Internet accounts or with falsified headers, and thereby avoid accountability to the consumer, has made junk e-mailing an irresistibly tempting marketing method for disreputable would-be entrepreneurs peddling get-rich schemes and dubious products and services.

31. The practice of unsolicited bulk e-mailing, or "spamming," is widely condemned in the Internet community. AOL's Terms of Service specifically prohibit AOL members from using their AOL accounts to send unsolicited bulk e-mail, and expressly reserve AOL's right to block unsolicited bulk e-mail sent to its members from the Internet. In addition, AOL's Terms of Service and E-Mail Policy prohibit members from harvesting or collecting the e-mail addresses of other AOL members.

Unsolicited Junk E-Mail Causes Substantial Harm to AOL's Computer Systems and Business Reputation

32. AOL's e-mail system was created solely for the benefit of AOL members, who pay prescribed fees and who agree to adhere to AOL's Terms of Service. The e-mail system is operated through dedicated servers that store and route e-mail messages between AOL's members. AOL permits its members to use the "aol.com" domain name, which when combined with a unique user name gives each member a distinctive e-mail address from which to exchange e-mail with Internet users (e.g., "member98@aol.com").

33. Any e-mail that is sent through the Internet to an AOL address is first received and sorted by AOL's mail servers. The AOL mail system has a finite capacity designed to accommodate the demands imposed by AOL's members. AOL's computers and computer system are not designed to accommodate, and are vulnerable to disruption by, defendants' and others' indiscriminate mass mailings of unsolicited e-mail. AOL has been forced to devote thousands of hours of staff time to address member complaints about this unsolicited e-mail and expend millions of dollars for new equipment to process the mass mailings.

34. The repeated transmission of massive batches of unsolicited e-mail messages by defendants and other junk e-mailers also degrades the performance of AOL's computers and computer system, forcing AOL to divert computer processing resources away from the handling of authorized e-mail for AOL members. The aggregation of time required to process these bulk e-mail transmissions slows the "delivery" of all e-mail to AOL members, and has at times resulted in significant delays in members' receipt of their e-mail from the Internet.

35. The transmission of unsolicited bulk e-mail by defendants and other junk e-mailers also results in a substantial quantity of mail sent to invalid e-mail addresses, which causes additional harm to the performance of AOL's computers and computer system. For each message that contains undeliverable recipients, AOL's computers must attempt to transmit a message back to the originating site of the e-mail message to inform it of the delivery failure. Attempts to send such "bounce" messages back to the sender's computers consume considerable processing resources within AOL's computers and computer system.

36. AOL has undertaken various technical efforts to permit its members to opt out of receiving messages from domains and IP addresses that are or have been the subject of member complaints regarding unsolicited bulk e-mail. These methods, however, rely on truthful e-mailing practices to be successful. When senders, such as defendants, mail from multiple and varying domains, employ random and varying user names, relay their messages through the servers of innocent third parties, or falsify the headers on their e-mails to indicate that their messages are from domains that AOL does not filter (e.g., "msn.com" or "aol.com"), AOL's computers and computer system cannot detect and filter the e-mail.

37. The practice of sending unsolicited commercial e-mail through AOL's computers and computer system has the effect of unfairly shifting to AOL the costs of transmitting these promotional messages. It is AOL, rather than the junk e-mailer, that pays the costs of the additional computer and staff resources that must be devoted to the processing of the massive batches of e-mail that junk e-mailers transmit through AOL's computers and computer system. AOL members also pay for these unwanted bulk messages in time and effort wasted in opening, reading, and discarding the messages.

38. Junk e-mailers' activities have particularly adverse consequences for those AOL members who pay for their access to AOL's online services and e-mail capability in increments of time. Time spent by such a member accessing, reviewing, and discarding junk e-mail messages is paid for by the member according to the member's hourly billing rates. These AOL members thus end up paying twice for the activities of junk e-mailers, through the increased costs and delays in AOL's operations occasioned by the processing of mass quantities of e-mail, and through increased monthly billings for their connection time with AOL. The costs of member dissatisfaction ultimately are borne by AOL, in lost business and harm to its reputation and goodwill.

39. The receipt of unsolicited, unwanted e-mail is the number one complaint voiced by AOL members about the Internet e-mail system. AOL receives approximately up to one hundred thousand such complaints per day.

Defendants' Spamming Practices

40. In or before 1996, AOL members began receiving large volumes of unsolicited junk e-mail advertising pornographic CD-ROMs and "virtual girlfriend" and "virtual boyfriend" software from "Mark Wrhel," Big B Software, VR Horizon, and Bruce Nichols ("the senders" or "these senders"). Although they appear to come from different individuals or entities, the e-mail messages sent by these senders are virtually identical to one another. They offer virtual reality pornographic software at cut-rate prices and/or provide hypertext links to web sites offering the same or similar pornographic products.

41. On information and belief, "Mark Wrhel" is an alias for defendant Christopher Mark Wrhel.

42. On information and belief, Big B Software and VR Horizon are businesses of unknown form that are d/b/a's for defendants Barry Hale, Teresa Hale, Sergio Hale and Ryan Hale.

43. In or before 1997, AOL members began receiving large volumes of unsolicited junk e-mail from Jared Thorp advertising directories of celebrity addresses. In at least one version of his e-mail advertising for celebrity address directories, Jared Thorp directed recipients to make their checks payable to "SMD Inc."

44. On information and belief, SMD Inc. is a business of unknown form that is a d/b/a for defendants Christopher Mark Wrhel, Jared Thorp and Andrew D. Faulstich.

45. Hundreds of thousands of unsolicited junk e-mail messages from these senders have been sent to AOL members using the techniques described above -- randomized sender addresses and altered header information -- to elude AOL's filtering and blocking systems and to disguise the origin of the messages.

46. Messages from these senders have also included forged headers with addresses including the "aol.com" domain name on the "from" line.

47. AOL has received hundreds of thousands of complaints from its members about unsolicited e-mail messages from these senders.

48. On December 1, 1997, AOL sent a letter to defendant Sergio Hale and VR Horizon at 10143 Plainview Avenue, Tujunga, California 91042. AOL's letter notified Hale that his unsolicited e-mail transmissions were causing injury to AOL and had resulted in numerous complaints by AOL members. AOL demanded that Hale and his agents or representatives cease and desist from transmitting unsolicited bulk e-mail to AOL and its members, forging header information and making unauthorized use of AOL's trademarks, and prohibited Hale and any other person(s) working in concert with him or on his behalf from transmitting any e-mail through AOL's proprietary computers and computer networks. AOL did not receive any response.

49. On February 9, 1998, AOL sent a letter to "Mark Wrehl" at the post office box address listed in his e-mail messages to AOL members. AOL's letter notified Wrehl that his unsolicited e-mail transmissions were causing injury to AOL and had resulted in numerous complaints by AOL members. AOL demanded that Wrehl and his agents or representatives cease and desist from transmitting unsolicited bulk e-mail to AOL and its members, forging header information and making unauthorized use of AOL's trademarks, and prohibited Wrhel and any other person(s) working in concert with him or on his behalf from transmitting any e-mail through AOL's proprietary computers and computer networks. AOL did not receive any response.

50. On May 7, 1998, AOL sent a letter to VR Horizon, with attention to defendants Sergio and Ryan Hale at 10143 Plainview Avenue, Tujunga, California 91042. AOL's letter notified the Hales that their unsolicited e-mail transmissions were causing injury to AOL and had resulted in numerous complaints by AOL members. AOL demanded that the Hales and their agents or representatives cease and desist from transmitting unsolicited bulk e-mail to AOL and its members, forging header information and making unauthorized use of AOL's trademarks, and prohibited the Hales and any other person(s) working in concert with them or on their behalf from transmitting any e-mail through AOL. AOL did not receive any response.

51. On May 7, 1998, AOL sent a letter to "Bruce Nichols" at the address listed in his e-mail messages to AOL members. AOL's letter notified Nichols that his unsolicited e-mail transmissions were causing injury to AOL and had resulted in numerous complaints by AOL members. AOL demanded that Nichols and his agents or representatives cease and desist from transmitting unsolicited bulk e-mail to AOL and its members, forging header information and making unauthorized use of AOL's trademarks, and prohibited Nichols and any other person(s) working in concert with him or on his behalf from transmitting any e-mail through AOL. AOL did not receive any response.

52. Following the mailing of AOL's above-mentioned cease and desist letters, and as recently as November 1998, AOL members have continued to receive from "Mark Wrhel," Big B Software, VR Horizon, and Bruce Nichols large volumes of unsolicited e-mail messages advertising pornographic products. These senders have also continued to engage in deceitful practices such as randomizing sender addresses and altering header information to evade AOL's filtering and blocking systems, and making unauthorized use of AOL's trademarks and service marks.

53. On information and belief, the defendants named in this complaint maintain or have maintained one or more membership accounts with AOL, which accounts have been used to facilitate the collection or "harvesting" of AOL members' e-mail addresses.

54. AOL repeats and realleges paragraphs 1 through 53 of this complaint as if fully set forth herein.

55. In connection with its provision of online and Internet computer services to its members, who are citizens of California and other states, AOL maintains computers and a computer system that are "protected computers" as the term is defined in 18 U.S.C. § 1030(e)(2)(B) because they are used in interstate commerce and communication ("AOL's protected computer facilities").

56. Since at least as early as 1996, defendants have repeatedly transmitted to AOL's protected computer facilities millions of unsolicited commercial e-mail messages in batches of tens and hundreds of thousands without authorization.

57. On each occasion on which defendants transmitted large batches of unsolicited junk e-mail messages, defendants knew that their bulk mailings would impair the operation of AOL's protected computer facilities and AOL's ability to provide quality e-mail services to its members.

58. Defendants have engaged in deceptive practices for the purpose of attempting to conceal from AOL the actual quantity of junk mail being transmitted by defendants to AOL members, thereby frustrating AOL's efforts to protect its e-mail system from injury and shield its members from unwanted junk mail.

59. Defendants knowingly and intentionally caused the transmission of information to, and gained access to, AOL's protected computer facilities without authorization, and as a result of such conduct caused damage, or recklessly caused damage, in violation of 18 U.S.C. § 1030(a)(5).

60. As a result of defendants' conduct, AOL has suffered damages, including impairment of the integrity and/or availability of data, programs, systems, and/or information in AOL's protected computer facilities, in an amount to be determined at trial. AOL's damages aggregate to at least $5,000 in value in the year preceding the date of the filing of this complaint.

61. Defendants threaten to continue to engage in the unlawful actions alleged herein, and unless restrained and enjoined will continue to do so, causing irreparable harm to AOL and its members. It is difficult to ascertain the amount of compensation that could afford AOL adequate relief for defendants' continuing unlawful acts. AOL's remedy at law is, therefore, inadequate to compensate for the injuries threatened, and AOL is entitled to preliminary and permanent injunctive relief.

62. AOL repeats and realleges the allegations of paragraphs 1 through 61 of the Complaint as if fully set forth herein.

63. In connection with its provision of online and Internet computer services to its members, who are citizens of California and other states, AOL maintains computers and a computer system that are "protected computers" as the term is defined in 18 U.S.C. § 1030(e)(2)(B) because they are used in interstate commerce and communication.

64. AOL's Terms of Service and Bulk E-Mail Policy specifically prohibit AOL members from using their AOL accounts to "harvest" or collect the e-mail addresses of other AOL members.

65. On information and belief, defendants, either individually or through those acting in concert with them, maintain or have maintained one or more AOL membership accounts and have used those accounts to "harvest" or collect the e-mail addresses of other AOL members, and have transmitted e-mails to AOL and its members without authorization.

66. Defendants have intentionally "exceeded authorized access," as that term is defined in 18 U.S.C. § 1030(e)(6), to AOL's protected computers by harvesting or collecting the e-mail addresses of other AOL members, has obtained information via an interstate communication to which he was not entitled, and has thereby violated 18 U.S.C. §1030(a)(2).

67. By exceeding authorized access to AOL's protected computers, defendants have caused AOL loss or damage in an amount to be determined at trial. AOL's damages aggregate to at least $5,000 during a one-year period preceding the filing of this complaint.

68. Defendants threaten to continue to engage in the unlawful actions alleged herein, and unless restrained and enjoined will continue to do so, causing irreparable harm to AOL and its members. It is difficult to ascertain the amount of compensation that could afford AOL adequate relief for defendants' continuing unlawful acts. AOL's remedy at law is, therefore, inadequate to compensate for the injuries threatened, and AOL is entitled to preliminary and permanent injunctive relief.

(Service Mark Infringement, 15 U.S.C. § 1114(1))

69. AOL repeats and realleges paragraphs 1 through 68 of this complaint as if fully set forth herein.

70. Defendants have used and are using domain name "aol.com" in connection with their advertising and selling pornographic materials in such a manner as to create a likelihood of confusion among prospective purchasers, thereby inducing purchasers and other to believe, contrary to fact, that the goods or services sold by defendants are rendered, sponsored, or otherwise approved by, or connected with AOL, which acts of defendants have damaged, impaired and diluted that part of AOL's goodwill symbolized by the well known name and mark "aol.com" to AOL's immediate and irreparable damage.

71. Defendants' use of the domain name "aol.com" in the manner alleged constitutes service mark infringement within the meaning of 15 U.S.C. § 1114(1).

72. Defendants had actual knowledge of AOL's rights in the service marks AMERICA ONLINE and AOL when they began using the name and marks complained of herein. Thus, defendants have willfully and deliberately infringed AOL's rights.

73. Defendants acts of infringement have caused AOL irreparable injury, loss of reputation and pecuniary damages. Unless enjoined by this court, defendants will continue these acts of infringement to AOL's immediate and irreparable damage.

(Service Mark Dilution, 15 U.S.C. § 1125(c))

74. AOL repeats and realleges paragraphs 1 through 73 of this complaint as if fully set forth herein.

75. Defendants have made commercial use of the domain name "aol.com" with the willful intent to trade on AOL's reputation or to cause dilution of the famous marks AMERICA ONLINE, AOL, and "aol.com."

76. Defendants' use of the domain name "aol.com" began long after AOL's marks had become well known and famous.

77. Defendants' use of the domain name "aol.com" causes dilution of the distinctive quality of AOL's famous marks AMERICA ONLINE, AOL, and "aol.com."

78. Defendants' use of the domain name "aol.com" lessens the capacity of AOL's famous marks AMERICA ONLINE, AOL and "aol.com" to identify and distinguish AOL's goods and services.

79. Defendants' activities complained of herein constitute service mark dilution within the meaning of Section 43(c) of the Trademark Act of 1946, 15 U.S.C. § 1125(c).

80. Defendants' conduct has caused AOL irreparable injury, loss of reputation and pecuniary damages. Unless enjoined by this court, defendants will continue to willfully dilute AOL's famous marks to the immediate and irreparable damage of AOL.

(False Designation of Origin, 15 U.S.C. § 1125(a))

81. AOL repeats and realleges paragraphs 1 through 80 of this complaint as if fully set forth herein.

82. Defendants have used and are using the domain name "aol.com," and defendants have made and are making false express or implied representations that their services originate with or are endorsed by AOL, in connection with the advertising of pornographic materials in such a manner as to create a likelihood of confusion among prospective purchasers, thereby inducing purchasers and others to believe, contrary to fact, that the goods or services sold by defendants are rendered, sponsored, or otherwise approved by, or connected with AOL. Such acts of defendants have damaged, impaired and diluted that part of AOL's goodwill symbolized by its names and marks to AOL's immediate and irreparable damage.

83. Defendants' use of trade names and marks that are confusingly similar to those used by AOL in connection with the advertising and sale of its goods or services constitutes use of a false designation of origin, and defendants' express or implied representations that their services originate with or are endorsed by AOL constitute a use of false descriptions or representations of fact, within the meaning of Section 43(a) of the Trademark Act of 1946, 15 U.S.C. § 1125(a).

84. Defendants' use of trade names and marks confusingly similar to those of AOL constitutes unfair competition, entitling AOL to remedies afforded pursuant to Section 43(a) of the Trademark Act of 1946, 15 U.S.C. § 1125(a).

85. Defendants' acts of false designation of origin and false advertising have caused AOL irreparable injury, loss of reputation and pecuniary damages. Unless enjoined by this court, defendants will continue the acts of unfair competition complained of herein to AOL's immediate and irreparable damage.

(Violation of Washington State's Unsolicited Commercial Electronic Mail Act)

86. AOL repeats and realleges the allegations of paragraphs 1 through 85 of the complaint as if fully set forth herein.

87. AOL maintains computer facilities that provide and enable computer access by multiple users to its computer servers and provide access to the Internet and thereby qualifies as an "Interactive computer service" as that term is defined by the Washington State Unsolicited Commercial Electronic Mail Act (the "Act").

88. Defendants have initiated the transmission of numerous commercial electronic mail messages to numerous electronic mail addresses belonging to AOL members that the defendants knew, or had reason to know, were held by Washington residents.

89. The commercial electronic mail messages sent by defendants used a third party's Internet domain name without permission of the third party, misrepresented information identifying the point of origin or transmission path of the commercial electronic mail message, and/or contained false or misleading information in the subject line.

90. Defendants transmitted these commercial electronic mail messages after the effective date of the Act.

91. Defendants' actions constitute numerous violations of the Act and, as provided by the Act, are also unfair and deceptive acts in trade or commerce and an unfair method of competition in violation of 19.86 RCW (1997), the Washington Consumer Protection Act.

92. By virtue of defendants' violations of the Act and 19.86 RCW (1997), AOL is entitled to liquidated damages in the amount provided by the Act, and/or any other remedies provided by 19.86 RCW (1997), including reasonable attorney's fees.

93. Defendants threaten to engage in unlawful actions alleged herein, and unless restrained and enjoined will continue to do so, causing irreparable harm to AOL.

(Trespass To Chattels)

94. AOL repeats and realleges paragraphs 1 through 93 of this complaint as if fully set forth herein.

95. The computers, computer networks, and computer services that comprise AOL's e-mail system are the personal property of AOL.

96. Without valid authorization, defendants have intentionally and repeatedly obtained access to, and made use of, AOL's proprietary computer equipment and e-mail system to facilitate defendants' spamming operation for defendants' own economic benefit.

97. Through defendants' practice and pattern of repeatedly causing the transmission of unsolicited commercial e-mail to tens and hundreds of thousands of AOL users, and the resulting transmission of a substantial number of bounced back messages and complaints in response to defendants' messages, defendants have wrongfully exercised dominion over AOL's computers and e-mail system in denial of AOL's own rights to that property, and thereby deprived AOL and its members of legitimate use of this commercially valuable system.

98. Under the common law of California, defendants' conduct constitutes trespass to AOL's chattels.

99. As a result of defendants' trespass, AOL has been damaged, including loss of goodwill and customers and damage to business reputation, among other damages, in an amount to be determined at trial. Because these damages cannot be readily ascertained, AOL lacks an adequate remedy at law and is entitled to preliminary and permanent injunctive relief.

100. The conduct of defendants alleged above was intentional, wanton, willful, oppressive and in conscious disregard of the rights of AOL. Accordingly, AOL is entitled to exemplary and/or punitive damages in an amount sufficient to punish defendants and deter defendants and others from engaging in similar conduct.

(Conversion)

101. AOL repeats and realleges paragraphs 1 through 100 of this complaint as if fully set forth herein.

102. Defendants, without authorization, have intentionally used AOL's proprietary computer and e-mail system for their own commercial benefit. This unauthorized use by defendants have deprived AOL and its customers of the legitimate use of this commercially valuable proprietary system.

103. Defendants' conversion of AOL's commercial property has caused and continues to cause AOL to suffer irreparable injury, loss of reputation, and pecuniary damages in an amount to be determined at trial.

104. Defendants committed the acts described above intentionally, maliciously, in an oppressive manner, and in conscious disregard of AOL's rights. Accordingly, AOL is entitled to punitive damages in an amount sufficient to punish defendants and deter defendants and others from engaging in similar conduct.

(Common Law Conspiracy to Commit Trespass to Chattels, Convert AOL's Property, and Violate State and Federal Statutes)

105. AOL repeats and realleges the allegations of paragraphs 1 through 104 of the complaint as if fully set forth herein.

106. On information and belief, defendants have conspired and combined with one another and with third parties to send unauthorized bulk e-mails to and through AOL's computers and computer system to AOL members, using false pretenses for the purpose of concealing from AOL the source and actual quantity of messages sent, and causing damage by impairing the operation of AOL's computers and computer systems and impairing AOL's provision of e-mail services to its members in violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(5).

107. On information and belief, defendants have conspired and combined with one another and with third parties to use AOL membership accounts to harvest AOL members' e-mail addresses, thereby exceeding their authorized access to AOL's computers and computer system in violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(2).

108.On information and belief, defendants have conspired and combined with one another and with third parties to send unauthorized bulk e-mails to and through AOL's computers and computer system to AOL members, wrongfully exercising dominion over AOL's computers and computer system, and depriving AOL and its members of the legitimate use of this commercially valuable system, and thereby committing trespass to chattels under California common law, and converting AOL's property for their own use.

109. The effectuation of these conspiracies through the transmission by defendants and their co-conspirators of unauthorized bulk e-mail to and through AOL's computers and computer system has damaged AOL and its protected computer systems and has damaged AOL's business relations, reputation, and goodwill among its members in an amount to be determined at trial.

110. Defendants and those acting in concert with them committed the acts described above intentionally, maliciously, in an oppressive manner, and in conscious disregard of AOL's rights. Accordingly, AOL is entitled to punitive damages in an amount sufficient to punish defendants and deter defendants and others from engaging in similar conduct.

(Unjust Enrichment and Imposition of a Constructive Trust)

111. AOL repeats and realleges paragraphs 1 through 110 of this complaint as if fully set forth herein.

112. Defendants have unjustly derived considerable economic benefit from the unauthorized use of AOL's proprietary computer system and other resources.

113. Defendants have also unjustly derived considerable economic benefit from the conduct described above by shifting the costs associated with receiving, sorting, storing and responding to customer complaints about unsolicited junk e-mail, and with processing undeliverable messages from defendants' lists. AOL has not been compensated in any way by defendants for these costs.

114. Any and all profits made by defendants as a result of their spamming and harvesting practices described herein constitute unjust enrichment.

115. AOL has been damaged by defendants' conduct and is entitled to an award of damages in an amount to be determined at trial, and/or is entitled to a constructive trust to be imposed on all profits made by defendants as a result of the practices described above.

WHEREFORE, plaintiff America Online Incorporated seeks entry of judgment in its favor and against defendants as follows:

A. Granting preliminary and permanent injunctive relief against defendants and all persons acting in concert or participating with them, enjoining them from:

1. Sending, transmitting, or otherwise facilitating the transmission of any unsolicited electronic mail message, or any electronic communication of any kind, to AOL or its members;

2. Sending, transmitting, or otherwise facilitating the transmission of any electronic mail message, or any electronic communication of any kind, to or through AOL's proprietary computer network or to AOL members, which message or communication bears any reference to or hypertext link to any Web domain registered to or used by defendants, or to any product or service sold or marketed by defendants or any person acting in concert or participating with them;

3. Sending, transmitting, or otherwise facilitating the transmission of any electronic mail message, or any electronic communication of any kind, to or through AOL's proprietary computer network or to AOL members, which message or communication bears any false, fraudulent, anonymous, inactive, deceptive or invalid header information, or otherwise uses any other artifice, scheme or method of transmission that would prevent or impede the automatic return of undeliverable electronic mail to its original and true point of origin;

4. Causing their electronic mail, web sites or messages to bear any AOL-registered trade or service mark or other symbol or representation falsely indicating that AOL has endorsed their products or services, that AOL is affiliated in any way with the defendants, or that any mail or message from them originated from, or was in any way transmitted through or by, AOL or any of its members;

5. Obtaining and/or using membership with AOL;

6. Acquiring, transferring or compiling AOL member addresses for the purpose of transmitting unsolicited e-mail to those AOL members or engaging in any other actions that result in the receipt of any unwanted mail by AOL and its members.

B. Awarding AOL compensatory damages, in an amount to be proven at trial, caused by defendants' violation of the Lanham Act (15 U.S.C. § 1051 et seq.), Computer Fraud and Abuse Act (18 U.S.C. § 1030), the Washington State Unsolicited Commercial Electronic Mail Act, and California common law;

C. Awarding AOL punitive damages against defendants, in an amount sufficient to punish and deter these defendants and others from similar malicious, oppressive, and fraudulent conduct in the future;

D. Imposing a constructive trust in favor of AOL on all monies received by the defendants as a result of their bulk e-mailing activities;

E. Awarding AOL and its attorneys its costs and attorneys' fees in prosecuting this action; and

/ / /

F. Granting AOL such other or additional relief as this court deems just and proper under the circumstances.

STEINHART & FALCONER LLP
ANDREW J. BERMAN (State Bar No. 146200)
LISA M. SITKIN (State Bar No. 194127)
333 Market Street, 32nd Floor
San Francisco, California 94105-2150
Telephone: (415) 777-3999
Attorneys for Plaintiff
AMERICA ONLINE INCORPORATED