Source: http://www.jdsupra.com/legalnews/complaint-for-injunctive-relief-and-dama-37538/
Timestamp: 2015-08-29 23:42:50
Document Index: 449978560

Matched Legal Cases: ['§ 1030', '§ 19', '§ 19', '§ 1331', '§ 1030', '§ 1338', '§ 1391', '§ 1030', '§ 22', '§ 19']

Complaint for Injunctive Relief and Damages | Microsoft Corp. v. Eric Lam, et al. | Tyson B. Snow - JDSupra
Microsoft Corp. v. Eric Lam, et al.Complaint for Injunctive Relief and Damages
Microsoft's "click-fraud" complaint against the owners of http://www.WoWMine.com, a website that sells virtual gold for the online role-playing game World of Warcraft. The Complaint demands damages in excess of $750,000 and Microsoft is represented by K&L Gates (Seattle Office). Interesting legal theories and their relationship to search engine and keyword advertising and fraudulent clicks and other schemes to circumvent advertiser protections.
Download PDF Fi ETEllED 1 «E 2 '•*; JUN 15 20 P: 3 AT SEATTLE CLERK U.S. DISTRICT COURT WESTERN BY 45 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE 7 MICROSOFT CORPORATION 8 Civil Case No £$R Plaintiff, 9 COMPLAINT FOR INJUNCTIVE v. RELIEF AND DAMAGES 10 ERIC LAM A/K/A ERIC CHUEN LAM, 11 MELANIE SUEN A/K/A MELANIE MA LAN SUEN A/K/A MA LAN MELANIE 12 SUEN A/K/A/MA LAN SUEN, GORDON LAM, SUPER CONTINENTAL US LLC, 13 SUPER CONTINENTAL USA LLC, UMGE, and DOES 1 THROUGH 50, inclusive, 14 Defendants. 15 16 Plaintiff Microsoft Corporation ("Microsoft") brings this action against Defendants 17 seeking injunctive relief and damages and alleges as follows: 18 JURISDICTION AND VENUE 19 1. This is an action for breach of contract, breach of the implied covenant of good 20 faith and fair dealing, tortious interference with business relationship, fraudulent concealment, 21 fraudulent misrepresentation, civil conspiracy, and violations of 18 U.S.C. § 1030, Rev. Code 22 Wash. § 19.270.010 etseq., and Rev. Code Wash. § 19.86.020. Microsoft seeks damages and 23 injunctive relief to remedy Defendants' fraudulent conduct in perpetrating a massive "click 24 fraud" scheme on the online advertising network operated by Microsoft and to benefit all 25 legitimate advertisers by protecting the integrity of Microsoft's advertising network from the 26 unfair, deceptive, and fraudulent actions of Defendants. K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -1 SEATTLE, WA29S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\20001 D3\03194\20332 623-7580 DAB\20332P249U D FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 2. This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1332 2 and 18 U.S.C. § 1030, in that at least one cause of action arises under the laws of the United 3 States, there is diversity of citizenship among the parties, and the amount in controversy 4 exceeds $75,000. The Court also has jurisdiction over the state law claims under 28 U.S.C. 5 §§ 1338(b) and 1367(a), as well as under general principles of supplemental and pendent 6 jurisdiction, in that said claims are joined with a substantial and related claim under the laws 7. of the United States. 8 3. ' This Court has personal jurisdiction over Defendants because they 9 purposefully availed themselves of the privilege of conducting activities in this forum or 10 purposefully directed their activities towards this forum, causing harm to Microsot in this 11 forum; Microsot's claims arise rom Defendants' forum-related activities; Defendants 12 consented to jurisdiction in this forum; and the exercise of personal jurisdiction over 13 Defendants is reasonable. 14 4. Venue in this District is proper under 28 U.S.C. §§ 1391(b), in that a 15 substantial part of the events or omissions giving rise to the claims plead herein occurred in 16 the Western District of Washington and/or a substantial part of the property that is the subject 17 of the action is situated in this District. 18 THE PARTIES 19 5 Plaintiff Microsot is a Washington corporation with its principle place of 20 business in Redmond, Washington. 21 6. Defendant Eric Lam a/k/a/Eric Chuen Lam ("Lam") is an individual allegedly 22 born in Guangzhou, China in 1976, and believed to be a current resident of Vancouver, BC, 23 Canada, or Guangzhou, China. 24 7. Defendant Melanie Suen, a/k/a Melanie Ma Lan Suen a/k/a Ma Lan Melanie 25 Suen a/k/a Ma Lan Suen ("Suen") is an individual believed to be a current resident of 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -2 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 Vancouver, BC, Canada. On information and belief, Suen is the mother of Lam and is a 2 person working with Lam in the conduct at issue here. 3 8. Defendant Gordon Lam ("Gordon Lam") is an individual believed to be a 4 current resident of Vancouver, BC, Canada. On information and belief, Gordon Lam is the 5 brother of Lam and is a person working with Lam in the conduct at issue here. 6 9. Defendant Super Continental US LLC ("Super Continental US") is a Delaware 7 limited liability company with a registered address of 501 Silverside Road, Suite 105, 8 Wilmington, Delaware, 19809 and is believed to be owned and/or controlled by Defendants 9 Lam and Suen and is used by Lam and Suen to register online advertising accounts with 10 Microsot. Defendant Super Continental USA LLC ("Super Continental USA") is a Delaware 11 limited liability company with a registered address of 501 Silverside Road, Suite 105, 12 Wilmington, Delaware, 19809 and is believed to be owned and/or controlled by Defendants 13 Lam and Suen and is used by Lam and Suen to register online advertising accounts with 14 Microsot, (Super Continental US and Super Continental USA are collectively referred to as 15 "Super Continental".) On information and belief, the individual Defendants Lam, Suen, and 16 Gordon Lam so dominate and control both Super Continental US and Super Continental USA 17 that they should all be treated as one and the same. 18 10. Defendant UMGE is a Delaware limited liability company with a registered 19 address of 501 Silverside Road, Suite 105, Wilmington, Delaware, 19809 and is believed to 20 be owned and/or controlled by Defendant Lam and is used by Lam to register online 21 advertising accounts with Microsot. On information and belief, the individual Defendants 22 Lam, Suen, and Gordon Lam so dominate and control UMGE that they should be treated as 23 one and the same. 24 11. Microsot is unaware of the true names and capacities of Defendants sued 25 herein as John Does 1-50, inclusive, and therefore sues these Defendants by such fictitious 26 names. Microsot will amend this complaint to allege their true names and capacities when K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -3 SEATTLE, W2A9S0H0INGTON 98J0T4-EUL5E8PHONE: (206) K:\2000103\03194\2D332 623-7580 DAB\20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 ascertained. Microsoft is informed and believes and therefore alleges that each of the 2 fictitiously named Defendants is responsible in some manner for the occurrences alleged here, 3 and that Microsoft's injuries as herein alleged were proximately caused by such Defendants. 4 12. Each Defendant aided and abetted the actions of the other Defendants, in that 5 each Defendant had knowledge of those actions and, in whole or in part, provided assistance 6 and benefited from those actions. Each Defendant was the agent of each of the remaining 7 Defendants, and was acting within the course and scope of such agency and with the 8 permission and consent of each other Defendant with respect to the conduct alleged here. 9 THE PRESENT CONTROVERSY 10 13. As part of its business, Microsoft delivers online advertising using its 11 Microsot adCenter ("adCenter") platform. adCenter ads appear on the network of Internet —-w— 12 advertising channels operated by Microsot and Microsot's network of paticipating Web 13 sites and other distribution outlets, including Microsot Advertising and the Microsot Media 14 Network (collectively, the "Microsot Network"). This action seeks to stop, and to recover 15 damages caused by, illegal conduct perpetrated by Defendants that has sought to disrupt and 16 defraud the Microsot Network and its participating advertisers. By engaging in a widespread 17 scheme that generated invalid clicks on links to online ads that were displayed in response to 18 search requests on Microsot's network, Defendants disrupted the advertising campaigns of 19 their competitors, obtained increased user traffic for their own ads at a much lower cost than 20 they could have otherwise, and caused substantial damages to Microsot, which has lost 21 revenues and expended substantial money and resources to remedy the effects of Defendants' 22 conduct.. Accordingly, Microsot brings this action to protect the integrity of online 23 advertising for the beneit of all legitimate advertisers and to recover the damages caused by 24 Defendants' improper conduct. 25 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -4 SEATTLE, W2A9S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 A. Microsoft AdCenter 2 14. Through adCenter, Microsot provides advertisers with tools to help manage 3 their advertising campaigns on Microsot's search engine, known as Live Search. Advertisers 4 who use adCenter bid on keywords or keyword phrases relevant to their target market. For 5 example, an airline might bid on keywords such as "airline tickets," "cheap lights," and "last-6 minute lights." When a user types one of these keywords or keyword phrases, or a query that 7 is relevant to the bidded keyword, into Live Search, results, known as "sponsored sites" for 8 that advertiser appear on the top and right side of the page, next to unpaid, organic search 9 results. When users click on these sponsored sites, they are directed to an advertiser's Web 10 site. 11 15. In large part, keyword bidding by advertisers functions much like an auction. 12 Advertisers bid the highest amount they are willing to pay for a particular keyword, and the 13 "winner" will pay one penny more than the next highest bidder. Hence, to simplify, if 14 advertiser #1 bid $30 for the keyword phrase "airline tickets" and the next highest bidder— 15 advertiser #2—bid $25 for that same keyword phrase, advertiser #1 would pay $25.01 for the 16 keyword phrase "airline tickets." This means that advertiser #1 would pay $25.01 each time 17 its sponsored site was offered up to an Internet user who enters the keyword phrase "airline 18 tickets" into Live Search, and the Internet user clicks on advertiser #l's sponsored site. 19 Additionally, the auction involves a variety of non-price-related performance factors, 20 including the ad's Click-Through-Rate ("CTR"), which is based on the number of times the 21 sponsored site was served (also referred to as the number of "impressions") relative to the 22 number of clicks on the sponsored site. 23 16. The placement of sponsored sites is critical for advertisers because the higher 24 the ranking, and thus the positioning on the results page, of a sponsored site, the higher 25 volume and higher quality the user traffic that clicks on the sponsored site, and the more 26 likely a conversion will occur—that is, that a user will click on the sponsored site and take a K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -5 SEATTLE, W2A9S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194V20332 623-7580 DAB\20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 desired action when directed to an ad, such as purchasing a product or registering for a 2 service. 3 17. adCenter uses a "Pay-Per-Click" ("PPC) payment model employed by most 4 major search engines. Under this model, an advertiser will allot a budget for a particular 5 advertising campaign—a set of related keywords—for a set period of time. While the 6 advertising campaign is active, the advertiser's sponsored site will appear in the Live Search 7 results when a user types in a query relevant to these keywords. Each time a user clicks on an 8 adCenter sponsored site, the advertiser pays for that click and the charge for that sponsored 9 site (determined on the auction basis described above) is deducted from the advertiser's 10 budget. Once the budget for the time period has been exhausted, the sponsored site will no 11 longer appear for searches of those keywords or relevant queries until a new budget cycle 12 begins. The price for each user click on a sponsored site is commonly known as Cost-Per-13 Click ("CPC"). CPC can range from five cents to hundreds of dollars, depending on the 14 competition among advertisers for particular keywords. 15 B. Click Fraud 16 18. The PPC advertising model, which is used by all major search engines, can be 17 subject to "pay-per-click fraud." Pay-per-click fraud is an industry term used to describe a 18 type of Internet crime that occurs in PPC online advertising when a person, automated script, 19 or computer program imitates a legitimate user of a Web browser by clicking on a sponsored 20 site for the purpose of generating a CPC without having actual interest in the target of the 21 sponsored site's link. Pay-per-click fraud is a subset of "invalid clicks," a broader term that 22 encompasses both proactive clicks generated with a fraudulent or deceptive purpose as well as 23 inadvertent or otherwise improper clicks. 24 19. One type of pay-per-click fraud is "competitor click raud." This type of click 25 raud occurs when a perpetrator repeatedly clicks on the sponsored site of its competitor in an 26 effort to exhaust or deplete the competitor's advertising budget and lower the placement of K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -6 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 the competitor's sponsored site, while simultaneously boosting the placement of the click 2 fraud perpetrator's own sponsored sites for the same keywords. Additionally, by exhausting 3 the ad budget or reducing the performance of sponsored sites for higher-bidding competitors, 4 competitor click fraud effectively lowers the cost of the targeted keyword when displayed to 5 legitimate users, meaning that the click fraud perpetrator's sponsored site will be displayed 6 with a higher ranking and at a lower price while raising the costs and lessening the value of 7 the competitors' advertising spend. For example, an advertiser in a particular industry such as 8 auto insurance that has a sponsored site appearing low on the results list could generate 9 repeated clicks on the higher-ranked sponsored sites of its competitors to the point that the 10 competitors' advertising budgets were exhausted or the performance of their sponsored sites 11 was dramatically lowered. This would cause the higher-ranking sponsored sites to drop off 12 the results page or decrease in the rankings, and the perpetrator's lower-ranking sponsored 13 site to rise to a higher position in the sponsored site list. This improved sponsored site 14 positioning would lead to increased and better quality traffic (and presumably greater 15 revenue) for the click fraud perpetrator—without the perpetrator paying a higher bid price for 16 keywords. 17 20. For simpliication, the generic term "click raud" is used here to refer to 18 competitor click fraud occurring in a PPC advertising model. This type of click raud can be 19 accomplished through a variety of methods, including the use of what are commonly referred 20 to as "click farms," where workers are hired to repeatedly click on sponsored sites, as well as 21 through automated tools that use robot technology, malicious code, spiders, and networks of 22 computers known as "botnets" to repeatedly click on sponsored sites. Microsot devotes 23 signiicant resources and efforts to address click fraud on its network, both proactively and 24 reactively, and has dedicated trafic quality teams focused on combating click raud to protect 25 advertisers on the Microsot Network. 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -7 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103M33194V20332 623-7580 DABA20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 c. Auto Insurance And World Of Warcraft ("WoW") Verticals 2 21. adCenter sponsored sites can be grouped into different "verticals," which are 3 made up of the set of sponsored sites relating to a particular product or industry. For example, 4 sponsored sites related to auto insurance—such as sponsored sites for auto insurance 5 companies and auto insurance lead companies (companies that essentially act as a broker by 6 identifying customers interested in purchasing insurance and selling that "lead" to companies 7 selling auto insurance)—constitute the auto insurance vertical on adCenter. 8 22. World of Warcraft ("WoW) is another vertical on adCenter. WoW is a 9 subscription service for an online game in the category known as "massively multiplayer 10 online role-playing games" ("MMORPG"). On information and belief, the game is played by 11 over eleven-and-a-half million subscribers worldwide. Internet users interested in playing and 12 learning more about WoW use WoW-related keywords to ind relevant Web sites. For 13 example, users may type various WoW-related keywords to ind information about strategies 14 for playing WoW or about the "gold" currency used in WoW ("WoW gold"). Like 15 advertisers in other industries, advertisers of WoW-related items bid on relevant keywords 16 and place sponsored sites that appear on Live Search when Internet users search for terms 17 relevant to these keywords. Because of the time and effort required to earn WoW gold as 18 well as to gather weapons within the game, a real world economy has developed for these 19 items. Companies selling WoW gold—including companies believed to be owned by 20 Defendants—advertise the sale of WoW gold for real currency by bidding on keywords using 21 adCenter and the Microsot Network (as well as other online advertising networks). 22 D. Defendants' Misconduct 23 23. This action arises out of Defendants' breach of the Microsot adCenter Terms 24 and Conditions ("Terms and Conditions") and general abuse of the adCenter online service. 25 24. Defendants have registered at least seven accounts on adCenter using the 26 names, Super Continental US LLC (USA) and UMGE. Each of the seven times Defendants K&L GATES LLP 925 FOURTH COMPLAINT FOR INJUNCTIVE AVENSUUEITE RELIEF AND DAMAGES -8 SEATTLE, WA29S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 registered these accounts, Defendants consented to the adCenter Terms and Conditions. 2 Specifically, three adCenter accounts for which Lam is the credit card holder were created on 3 July 14,2007, November 19, 2007, and December 10, 2007, with Lam or one of the other 4 Defendants accepting and agreeing to the Terms and Conditions of each account. In addition, 5 four adCenter accounts for which Suen is the credit card holder were created on August 16, 6 2007, August 29, 2007, March 29, 2008, and January 13, 2009, with Suen or one of the other 7 Defendants accepting and agreeing to the Terms and Conditions of each account. 8 25. Included in the Terms and Conditions is the representation and warranty; 9 "You will not, and will not authorize any third party to, use any automated means, including, 10 without limitation, agents, robots, scripts or spiders ... to interfere with the proper working of 11 Microsot or the Microsot Advertising Network and will not generate automated or 12 fraudulent impressions or clicks of advertisements on the Microsot Advertising Network." 13 See Appendix A, Microsot adCenter Terms and Conditions (November 26, 2007 update), at f 14 5.c; Appendix B, Microsot adCenter Terms and Conditions (July 28, 2006 update), at % 5.b. 15 Defendants repeatedly violated both the plain terms and spirit of the Terms and Conditions by 16 engaging in a scheme to generate automated clicks on competitors' sponsored sites with 17 malicious and fraudulent intent. 18 26. On March 24, 2008, Microsot received an unusually high number of 19 complaints of suspicious activity from advertisers in the auto insurance industry. The 20 complaints concerned a dramatic spike in "exact" match-type keywords requently bid on by 21 auto insurance advertisers; namely, "auto insurance," "car insurance," "cheap car insurance," 22 uauto insurance quote," and "auto insurance quotes." Such a spike for exact match-type 23 keywords is extremely unusual—it is as if one hundred people in a room were asked to type 24 the first three words that came to mind, and all one hundred typed the same three words at the 25 same time, with no communication and no visual cues among them. Microsot investigators 26 conirmed that a large number of exact match-type keywords were being searched, and, K&L GATES LLP 925 FOURTH COMPLAINT FOR INJUNCTIVE AVENSUUEITE RELIEF AND DAMAGES -9 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194V20332 DABV20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 within a short period of time, the top sponsored site results were being clicked, which 2 indicated that automated or "click farm"-generated click fraud was occurring on the Microsoft 3 Network. Over the same period of time, Microsoft investigators discerned similar traffic 4 spikes for exact match-type keywords in the WoW vertical. 5 27. Microsoft investigators initially determined that several hundreds of thousands 6 of the Internet Protocol ("IP") addresses identified as responsible for the searches and clicks 7 were tracing back to computer networks known as "proxy server networks" and "dedicated 8 network hosting providers," rather than individual computers connected to the Internet. 9 Further investigation by Microsot confirmed that these IP addresses were not the true source 10 of the suspicious traffic but instead were used to disguise the identities of the perpetrators and 11 to manipulate the network traffic so that it would appear to be generated by human, rather 12 than automated, activity. 13 28. On April 24, 2008, a similar attack of suspicious traffic began originating from 14 a new range of IP addresses and impacted both the auto insurance and WoW verticals on the 15 Microsot Network. When Microsot took steps to mitigate these automated attacks, the 16 perpetrators followed by implementing countermeasures to Microsot's actions. A cycle of 17 events ensued whereby the Defendants would update their attack methods to bypass the ixes 18 implemented by Microsot, and Microsot would take additional steps to combat the new click 19 fraud attacks. 20 29. In June and July 2008, new, similar attacks of suspicious trafic began 21 originating from different ranges of IP addresses and impacted both the auto insurance and 22 WoW verticals on the Microsot Network. 23 30. In the irst two weeks of December 2008, a new wave of click raud, directed 24 at an "exact match"—"cheap auto insurance"—impacted one speciic auto insurance 25 advertiser. During this time period, exact word click fraud impacting the WoW market 26 K&L GATES LLP 925 FOURTH COMPLAINT FOR INJUNCTIVE AVENSUUEITE RELIEF AND DAMAGES -10 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\200D103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206)623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 originated from the same IP addresses as the click fraud impacting the auto insurance 2 advertisers. 3 31. Like in the irst attack, proxy server networks and dedicated network hosting 4 providers were used to conceal the origin of the fraudulent clicks in each of these subsequent 5 attacks. 6 32. As these click fraud attacks impacted the Microsoft Network, Microsoft took 7 steps to rapidly counter the click fraud and to credit advertisers who had been charged for 8 fraudulent clicks. 9 33. Over several months, Microsoft gathered substantial evidence demonstrating 10 that Defendants are the perpetrators of the auto insurance and WoW-related click fraud on the 11 Microsoft Network. 12 9 Evidence Linking The WoW Click Fraud To The Auto Insurance Vertical 13 Attacks. The click fraud affecting both the WoW and auto insurance verticals on adCenter 14 originated from identical IP address ranges, occurred during the same timeframe, and, 15 initially, utilized identical Web browser user agent strings (the text ield in an HTTP request 16 that contains the name and version of the Web browser). (Had the traffic been legitimate, 17 Microsoft would have expected to see more than one hundred different Web browser user 18 agent strings from the IP addresses at issue, not one). 19 o Lam's Unique Connection To Both Verticals. The click fraud at issue 20 targeted sponsored sites for two ordinarily unrelated markets: auto insurance and WoW. Lam 21 is uniquely involved in—and positioned to profit from click raud in—both markets. Indeed, 22 Super Continental US holds itself out as responsible for the sales and marketing of 23 WoWMine.com, a Web site related to WoW with a domain name that is registered to Lam. 24 At the same time, the Super Continental US LLC (USA) account on adCenter also contains 25 campaigns related to the auto insurance vertical. 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -11 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 Lam's AdCenter Accounts With Suen And Gordon Lam. Suspecting that 2 Lam was uniquely connected to both the WoW and auto insurance verticals, Microsot 3 identified all of the adCenter accounts that were linked to Lam to determine how these 4 accounts were impacted by the attacks. Microsoft identified at least seven adCenter accounts 5 tied to Lam and the other Defendants, in the names of at least two purported companies, 6 Super Continental US LLC (USA) and UMGE. The credit card holder for each of the 7 accounts is Lam or Suen; all seven of the accounts were registered to the same email address; 8 the same name ("Vincent Chu" or "Vicent Chu") is the name used to register ive of the seven 9 accounts; and six of the seven accounts were registered to the same physical address in 10 Delaware, where Defendants' companies Super Continental and UMGE are registered. The 11 domain names UMGE.com, UMGE.org, and UMGE.net all are registered to Eric Lam at the 12 same Delaware address. In addition, Super Continental US appears to be affiliated with a 13 Hong Kong entity Super Continental Ltd. (Hong Kong, S.A.R.) and a Canadian entity, Super 14 Continental Development Ltd. (Canada), of which Suen is the president and sole registered 15 director. 16 Defendants AdCenter Accounts Benefited From The Click Fraud Attacks. 17 During certain periods of high click fraud, the sponsored sites of Defendants' companies 18 (Super Continental and UMGE) experienced only a few isolated clicks from the IP addresses 19 generating the click fraud (most likely tests), whereas sponsored sites placed by Defendants' 20 competitors were hit with thousands of clicks rom the IP addresses generating the click raud. 21 This complex and nuanced attack against the Microsoft Network demonstrated a detailed 22 understanding of how the ad platform operates. The result was that while competitors' 23 advertising budgets were exhausted or sponsored site performance was decreased as a result 24 of the click fraud, Defendants' advertising budgets were not impacted, causing Lam's 25 sponsored sites to assume higher rankings and increased traffic, leading to increased revenue 26 for Lam and the other Defendants, K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -12 SEATTLE, WA29S0H0INGTON 98)04T-E11L5E8PHONE: (206) K:\2000103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 Lam's Other Web Sites Connect To The Click Fraud Attacks. Microsot 2 investigators confirmed Lam's involvement in the click fraud by connecting the fraudulent 3 clicks to computers or servers registered to and/or operated by Eric Lam from Vancouver, 4 British Columbia. Lam uses these servers to host Web sites on which he openly sells WoW 5 gold. 6 34. Through their click fraud scheme, Defendants impacted the performance of 7 competitors' sponsored sites related to auto insurance and WoW, so that these competitor 8 sponsored sites would be displaced in the sponsored site results, allowing Defendants' 9 sponsored sites to achieve higher ranking, and therefore higher traffic (and resulting revenues) 10 at a relatively low cost to Defendants. On information and belief, Defendants profited 11 through this scheme because, in the WoW vertical, the higher traffic meant that more users 12 clicked on Defendants' sponsored sites and were directed to sites where they purchased WoW 13 gold from companies controlled by Defendants. In the auto insurance vertical, the higher 14 traffic meant that more users clicked on Defendants' sponsored sites and were directed to 15 Web pages where they were asked to submit information to receive insurance quotes. 16 Defendants then would sell that consumer information at a premium to a third party auto 17 insurance lead company, who in turn would sell the information to legitimate auto insurance 18 companies, which would provide the quotes. By defrauding Microsot in this manner, 19 Defendants gained substantial revenue that would not be generated but for this fraudulent and 20 malicious activity and harmed both Microsot and Defendants' competitors, who are 21 legitimate advertisers on the Microsot Network. 22 35. As this click fraud impacted the Microsot Network, Microsot took steps to 23 ensure that its advertisers were not adversely affected, by issuing advertising credits to all 24 advertisers who were impacted by the fraudulent activity. Overall, Microsot credited nearly 25 $1.5 million to auto insurance and WoW advertisers in direct response to Defendants' click 26 raud. Apparently to divert suspicion from his own activities as the source of the fraudulent K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -13 SEATTLE, W2A9S0H0INGTON 9810T4E-HL5E8PHONE: (206) K:\2000103\D3194V20332 623-7580 DAB\20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 activity, Lam himself complained to Microsoft about the incidence of click fraud on the 2 Microsoft Network, and, he too was issued a small credit by Microsoft before Microsoft knew 3 Lam himself was behind the click fraud scheme. This maneuver initially diverted attention 4 from Lam as being the source of the fraudulent activity. 5 36. As a direct result of Defendants' conduct, Microsoft has lost revenue, incurred 6 expenses, and suffered damage to its business, reputation, and goodwill. In particular, 7 Microsoft has been harmed in at least the following respects. First, the fraudulent scheme of 8 Defendants has the inevitable effect of lowering the confidence of legitimate advertisers in the s 9 online advertising industry. In fact, at least one legitimate auto insurance company 10 temporarily suspended its advertising campaigns on the Microsoft Network that included 11 keywords impacted by Defendants' click fraud scheme. Second, the displacement of 12 legitimate advertisers from their positions in the sponsored sites caused the prices for 13 keywords relating to auto insurance and WoW to go down and some advertisers to spend less, 14 effectively undervaluing the entire market for sponsored sites in those verticals, and causing 15 Microsot to suffer additional lost profits. Third, Microsot has expended substantial resources 16 (including considerable developer time and customer support resources) in order to 17 investigate and address the fraudulent activities of Defendants. In all, Microsot estimates 18 that it suffered at least $750,000 in damages as a direct result of Defendants5 click raud 19 scheme. 20 37. Unless enjoined, Defendants will continue their click raud attacks on the auto 21 insurance and WoW ad markets. Microsot has been, and continues to be, irreparably 22 damaged by Defendants5 conduct, and has no adequate remedy at law, in that it may be 23 dificult to ascertain the amount of compensation that could afford Microsot adequate relief 24 for such continuing acts. 25 26 K&L GATES LLP COMPLAINT FOR rNJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -14 SEATTLE, WA29S0H0INGTON 98I04T-EI1L5E8PHONE: (206) K:\2000103\0319<4\20332 DABV20332P249U 6F2A3C-7S5I8M0ILE' (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 COUNT I—BREACH OF CONTRACT (Against All Defendants) 2 38. Microsoft incorporates and realleges each and every allegation contained in 3 paragraphs l-37ofthis Complaint. 4 39. Defendants have registered accounts for at least two purported companies, 5 Super Continental and UMGE, on adCenter. Upon opening those accounts, Defendants 6 consented to the standard Terms and Conditions for participation in the Microsoft Network. 7 40. Under theseTerms and Condiions, Defendants—both the registered account 8 owners, Super Continental and UMGE, and, under principles of alter ego, the individual 9 m Defendants as well—were contractually prohibited from generating automated or fraudulent 10 impressions or clicks on sponsored sites on the Microsot Network. In addition, Defendants 11 were prohibited rom authorizing any third party to engage in such activity. 12 41. Microsot performed all conditions, covenants, and promises required to be 13 performed by Microsot in accordance with the Terms and Conditions, except those that 14 Microsot was prevented or legally excused rom performing and those as to which its 15 performance was waived. 16 42. Defendants breached the Terms and Conditions by generating artificial and/or 17 raudulent clicks or impressions on competitors' sponsored sites appearing on the Live Search 18 results pages. 9 43. These artificial and/or fraudulent clicks exhausted the advertising budgets of 20 Defendants5 competitors, causing the rank of Defendants' sponsored sites to rise on Live 21 Search results pages. In conjunction or alternatively, artificial and/or raudulent impressions 22 on the sponsored sites of Defendants' competitors impacted the performance of the sponsored 23 * sites of Defendants' competitors, causing the rank of Defendants' sponsored sites to rise on 24 Live Search results pages. By virtue of manipulating the results page rankings for their 25 benefit, Defendants received significant revenue to which they were not entitled. 26 K&L GATES LLP 925 FOURTH COMPLAINT FOR INJUNCTIVE AVENSUUEITE RELIEF AND DAMAGES -15 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 44. Microsoft has been injured by Defendants' breaches of the applicable Terms 2 and Conditions in an amount to be proven at trial. 3 COUNT II—BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 4 (Against All Defendants) 5 45. Microsot incorporates and realleges each and every allegation contained in 6 paragraphs 1-44 of this Complaint. 7 46. The Terms and Conditions contained an implied covenant of good faith and 8 fair dealing, providing that neither party would act to deprive the other of the benefits of the 9 agreement between them. 10 47. A principal and reasonable expectation of Microsot in entering into the 11 Terms and Conditions with advertisers such as Defendants was that advertisers would not 12 attempt to generate raudulent clicks or impressions in order to increase their own revenues or 13 decrease the revenues of other advertisers or of Microsot. 14 48. The implied covenant obligated Defendants to refrain rom generating 15 raudulent clicks and impressions so as to increase their revenues as the expense of other 16 advertisers and of Microsot. In doing so, Defendants breached the implied covenant of good 17 faith and fair dealing. 18 49. Defendants' conduct has caused damages to Microsoft in an amount to be 19 proven at trial. 20 COUNT III—TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIPS 21 (Against All Defendants') 22 50. Microsot incorporates and realleges each and every allegation contained in 23 paragraphs 1-49 of this Complaint. 24 51. Microsot had valid contractual relationships with legitimate advertisers 25 participating in adCenter, speciically with those advertising in the WoW and auto insurance 26 markets. K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -16 SEATTLE, WA29S0H0INGTON 9S10T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 623-7580 DABA20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 52. Defendants had knowledge of the existence of such contractual relationships 2 between Microsoft and its legitimate advertisers. 3 53. Defendants intended to, and did, disrupt the contractual relationships between 4 Microsoft and its legitimate advertisers, depriving Microsoft of the complete benefits of those 5 contractual relationships. 6 54. Defendants' disruption of Microsoft's contractual relationships was for an 7 improper purpose and done by improper means. 8 55. As a direct and proximate cause of Defendants' tortious interference with those 9 contractual relationships, Microsoft has been damaged in an amount to be proven at trial. 10 56. Defendants acted fraudulently and in knowing and conscious disregard of 11 Microsoft's rights, intending to cause harm to Microsoft and its legitimate advertisers and to 12 benefit themselves at others' expense. 13 COUNT IV—FRAUDULENT INDUCEMENT (Against All Defendants) 14 57. Microsoft incorporates and realleges each and every allegation contained in 15 paragraphs 1-56 of this Complaint. 16 58. In entering into the Terms and Conditions, Defendants—both the registered 17 account owners, Super Continental and UMGE, and, under principles of alter ego, the 18 individual Defendants as well—promised not to generate invalid clicks or to authorize or 19 encourage others to engage in such conduct. Defendants made these promises without any 20 intent of performing them. Indeed, Defendants intended to violate these promises rom the 21 start of their contractual relationship with Microsot. 22 59. Defendants' false promises to comply with the adCenter Terms and Conditions 23 were made with scienter, as Defendants made them to induce Microsot to enter into the 24 Terms and Conditions with Defendants and allow them to maintain accounts on the Microsot 25 Network. 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -17 SEATTLE, WA29S0H0INGTON 9810T4-EI1L5E8PHONE: (206) K:\2000103\03194\2Q332 623-7580 DABV20332P249U FACSIMILE; (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 60. Microsoft relied on Defendants' false promises, as Microsoft would never have 2 allowed Defendants to maintain accounts as advertisers on the Microsoft Network had it 3 known their true intentions. 4 61. As a direct result of Defendants' false and fraudulent promises, Microsoft has 5 been damaged in an amount to be proven at trial. 6 COUNT V—FRAUDULENT MISREPRESENTATION (Against All Defendants) 7 62. Microsoft incorporates and realleges each and every allegation contained in 8 paragraphs 1-61 of this Complaint. 9 63. Defendants knew that Microsot adCenter utilizes the PPC model both because 10 it is common knowledge and because Microsot's payment structure is descibed in the Terms 11 and Conditions, to which Defendants consented. Accordingly, Defendants knew that when a 12 user clicks on an advertiser's sponsored site, Microsot recognizes that click as an expression 13 of the user's legitimate interest in accessing the advertised site, and thus charges the advertiser 14 for each click. 15 64. By generating artificial or fraudulent impressions on sponsored sites, 16 Defendants represented to Microsot that each of those clicks was legitimate and that the 17 purported individual clicking desired to access the site being advertised. 18 65. Defendants, but not Microsot, knew that such representations were false. 19 Defendants' clicks were not legitimate and the intent of the click was not to access the 20 advertised site for a legitimate purpose. 21 66. Defendants' misrepresentations to Microsot through the generation of 22 fraudulent or automated clicks were intentional and made with scienter in an effort to induce 23 Microsot to charge advertisers for clicks on their sponsored sites and to input those clicks 24 into the adCenter ad placement algorithm. 25 26 K&L GATES LLP 925 FOURTH COMPLAINT FOR INJUNCTIVE AVENSUUEITE RELIEF AND DAMAGES -18 SEATTLE, WA29S0H0INGTON 9810T4E-3L1E5P8HONE: (206) 623-75 K:\2000103\03194\20332 DAB\20332P249U BF0ACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 67. Microsoft did rely on Defendants' misrepresentations as to the legitimacy of 2 the clicks that Defendants generated by charging advertisers for those clicks and inputting 3 those clicks into the adCenter ad placement algorithm. 4 68. Microsot had a right to rely on Defendants5 misrepresentations because 5 Microsot takes reasonable measures to protect the integrity of the Microsot Network and 6 adCenter system and thus has a legitimate expectation that activity on the Microsot Network 7 would take place for a legitimate purpose. 8 69. As a direct result of Defendants5 fraudulent conduct, Microsot has been 9 damaged in an amount to be proven at trial. 10 COUNT VI—COMPUTER FRAUD AND ABUSE ACT (18 U.S.C. S 1030) (Against All Defendants) 11 70. Microsot incorporates and realleges each and every allegation contained in 12 paragraphs 1-69 of this Complaint. 13 71. In engaging in the conduct described above, including but not limited to using 14 a botnet or other automated program in order to send commands or information that generated 15 invalid clicks and impressions with respect to the sponsored sites of competitors, Defendants 16 knowingly caused the transmission of a command or information and, as a result, intentionally 17 caused damage to a protected computer, within the scope of 18 U.S.C. § 1030(a)(5)(A). 18 Defendants also knowingly, and with the intent to deraud, exceeded their authorized access 19 to the adCenter system by generating invalid clicks and impressions and by means of this 20 conduct furthered their intended raud and thereby obtained substantial revenue that would 21 not have been generated but for their fraudulent scheme in violation of 18 U.S.C. § 22 1030(a)(4). 23 72. In particular, by generating invalid clicks and impressions, Defendants caused 24 an impairment to the integrity and availability of the data in adCenter. 25 73. Defendants caused Microsot damages within a one year period in excess of 26 $5,000, in that adCenter service was interrupted and the integrity of the data in adCenter was K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -19 SEATTLE, WA29S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE" (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 adversely affected, distorting the rankings of advetisers in the WoW and auto insurance 2 markets, depriving Microsoft of revenues from legitimate advertisers, and causing Microsoft 3 to expend substantial resources to investigate, police, and address the fraudulent activities of 4 Defendants. 5 COUNT VII—WASHINGTON COMPUTER SPYWARE ACT (Against All Defendants) 6 74. Microsoft incorporates and realleges each and every allegation contained in 7 paragraphs 1-73 of this Complaint. 8 75 To generate artificial and/or fraudulent clicks on sponsored sites, Defendants 9 transmitted or procured the transmission of sotware and/or executed a series of instructions 10 onto Microsot's computers, servers, and other Microsot resources comprising the Microsot 11 Network, knowing that the sotware and/or series of instructions would use these computers, 12 servers, and other Microsot resources comprising the Microsot Network as part of an 13 activity performed by a group of computers, in violation of Rev. Code Wash. § 19.270.020(8). 14 76. The purpose of Defendants' activity was to cause damage to Defendants' 15 competitors, to Microsot, and to the Microsot Network. 16 77. Microsot was damaged as a direct result of Defendants5 conduct because the 17 adCenter service was interrupted and the integrity of the Microsot Network was impaired and 18 Microsot has expended substantial resources to investigate, police, and address the 19 fraudulent activities of Defendants. 20 COUNT VIII—WASHINGTON CONSUMER PROTECTION ACT 21 (Against All Defendants) 22 78. Microsot incorporates and realleges each and every allegation contained in 23 paragraphs 1-77 of this Complaint. 24 79. By engaging in the conduct set out above, Defendants have engaged in unfair 25 and deceptive acts and practices in trade or commerce pursuant to Rev. Code Wash. 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -20 SEATTLE, WA29S0H0INGTON 9810T4-E1L1E5P8HONE: (206) K:\2000103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 19.86.020, in that they generated invalid clicks on the sponsored sites of legitimate advertisers 2 in the WoW and auto insurance markets. 3 80. This unfair and deceptive conduct has impacted the general public in that, as 4 detailed above, it has distorted the online advertising market with respect to auto insurance 5 and WoW, causing harm to legitimate advertisers and to Microsoft. 6 81. Microsoft has suffered injury in its business as a result of the lost revenues and 7 other damages detailed above, all of which were directly caused by the unfair and deceptive 8 acts of Defendants. 9 COUNT IX—CIVIL CONSPIRACY (Against All Defendants) 10 82. Microsot incorporates and realleges each and every allegation contained in 11 paragraphs 1-81 of this Complaint. 12 83. On information and belief, Defendants had an explicit agreement, and operated 13 a common plan, to defraud their competitors and Microsot out of money by carrying out a 14 click raud scheme on the Microsot Network, as alleged above. 15 84. Defendants took overt steps and wrongful acts toward this goal by, among 16 other actions, registering accounts on adCenter for Super Continental and UMGE, bidding on 17 keywords related to the auto insurance industry and WoW, generating artiicial and/or 18 fraudulent clicks on competitors sponsored sites, logging a formal complaint with Microsot 19 regarding click raud on the Microsot Network, and collecting a credit rom Microsot. 20 85. As a direct result of Defendants' fraudulent conduct, Microsot has been 21 damaged in an amount to be proven at trial. 22 COUNT X—UNJUST ENRICHMENT 23 (Against Defendants Lam, Gordon Lam, and Suen And Does 1-50) 24 86. Microsot incorporates and realleges each and every allegation contained in 25 paragraphs 1-85 of this Complaint. 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -21 SEATTLE, WA29S0H0INGTON 98 304-1T1E5L8EPHONE: (206) K:\2000103\03194\20332 623-7580 DABV20332P249U FACSIMILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 87. With respect to those Defendants against whom Microsoft may not have 2 enforceable contract rights, Microsoft conferred a benefit on Defendants, in that Defendants 3 were allowed to advertise on the network and took advantage of that opportunity to engage in 4 improper and fraudulent conduct, thereby generating for themselves substantial additional 5 revenues above what they could have obtained legitimately advertising through adCenter. In 6 particular, Defendants benefited from their improper conduct by obtaining higher positioning r 7 for their sponsored sites without bidding higher for keywords than they otherwise would have, 8 allowing Defendants to obtain valuable customer leads through their sponsored sites that they 9 have sold to their benefit. Microsoft is informed and believes that the total benefit to 10 Defendants from such conduct exceeded $250,000. 11 88. Defendants therefore beneited improperly and have been unjustly enriched at 12 the expense of Microsot and legitimate advertisers, and inequity would result if Defendants 13 were allowed to retain the benefit they have obtained. 14 PRAYER FOR RELIEF 15 WHEREFORE, Microsoft prays for judgment against Defendants as follows: 16 89. For preliminary and permanent injunctive relief enjoining Defendants from 17 engaging in any conduct resulting in improper or invalid clicks on any sponsored sites on the 18 Microsoft Network; 19 90. For an award of compensatory damages in an amount to be proven at trial but 20 in excess of $750,000 arising from Defendants' breach of contract, breach of the implied 21 covenant of good faith and fair dealing, tortious interference with contact, fraudulent 22 concealment, fraudulent misrepresentation, and civil conspiracy, as well as violation of 23 federal and state statutes 24 91. For an award of statutory damages or treble damages in an amount to be 25 proven at trial; 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -22 SEATTLE, W2A9S0H0INGTON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1 92. For an accounting, disgorgement, and restitution by Defendants to Microsoft of 2 all amounts paid to Defendants through their accounts with adCenter or otherwise received by 3 Defendants as a result of their fraudulent, unfair, and improper conduct; 4 93. For an award of Microsoft's attorneys' fees; 5 94. For an award of Microsoft's costs of suit; 6 95. For an award of prejudgment interest to the extent allowed by law; and 7 96. For such other and additional relief as the Court deems just and proper. 89 DATED this 15U1 day of June, 2009. 10 K&L GATES LLP 11 12 By_ 13 David A. Bateman, WSBA # 14262 925 Fourth Ave., Suite 2900 14 Seattle, Washington 98104 Tele: (206) 623-7580 15 Fax: (206) 623-7022 Email: david.bateman@klgates.com 16 17 COVINGTON & BURLING LLP 18 Simon J. Frankel, pro hac vice pending 1 Front St, 35th Floor 19 San Francisco, CA 94123 Tele: (415) 591-7052 20 Fax: (415)955-6552 Email: sfrankel@cov.com 21 Attorneys for Plaintiff 22 MICROSOFT CORPORATION 23 24 25 26 K&L GATES LLP COMPLAINT FOR INJUNCTIVE 925 FOURTH AVENSUUEITE RELIEF AND DAMAGES -23 SEATTLE, WA29S0H0INGON 9810T4E-1L1E5P8HONE: (206) K:\2000103\03194\20332 DAB\20332P249U 6F2A3C-7S5I8M0ILE: (206) 623-7022 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56daDocument hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56daLast Updated -November 26, 2007 ———> „ , Microsot adCenter Terms and Conditions —-,i. i» -,-.1 —--H ¦—...wmw. , —T-»-.»-« , — —--.M^I.-I^IM-,...^... _.——^,,MI„ .,, 1. INTRODUCTION. This is a contract between you ("Advertiser" or "You") and Microsot Online, L.P. (located at One Microsot Way, Redmond, WA 98052-6399) ("Microsoft"). This contract applies to Your participation in the Microsot adCenter online advertising program (the "adCenter Program"). No other terms of any sort appearing in any other communications from you to Microsot in connection with an order for adCenter Program services alter or supplement this agreement. You represent and warrant that You are authorized to enter into this agreement and act on behalf of any third party for which You facilitate the adCenter Program, Microsot may change this agreement at any time upon notice to You in accordance with the provisions of Section 8. Your continued participation in the adCenter Program ater any such notice will signify Your acceptance of such change, 2. MICROSOFT ADCENTER. Subject to Your compliance with this Agreement, and such other rules and procedures as Microsot may publish rom time to time, You may access the adCenter Program through the adCenter Web site, currently located at http://adcenter.microsot.com and certain related Web sites (collectively, the "adCenter Site"). You may access the adCenter Site solely to manage Your adCenter Program account, including to submit bids for the ability to display advertisements ("Advertisements") in response to certain keywords or other matching criteria ("Keywords") on the network of advertising channels operated by Microsot and Microsot's network of participating websites.and other distribution outlets (collectively, the-"Microsoft Advertising Network"). You will protect any passwords or other credentials associated with Your account(s), and take full responsibility for any use of the account(s) under Your password. 3. CONTENT; PROGRAM CODE OF CONDUCT. Advertisements may include, at Microsot's discretion, text, graphics, a listing title, or a listing description. You will provide Microsot with all text, logos, images, and URLs ("Content") for the Advertisements. The Content, the Advertisements, and any Web site to which such Advertisements link an end user will comply with the published requirements for the adCenter Program (currently available at http://adcenter.microsot.com) including its trademark policies, editorial guidelines and creative specifications. You hereby grant Microsot a nonexclusive, royalty-free, worldwide right and license to reproduce, publicly perform, display and distribute, resize or edit the Content solely for the purpose of providing services to You in connection with this agreement. Your failure to meet applicable time requirements or specifications in connection with the delivery of Content may delay or prevent placement of the Content on the Microsot Advertising Network, or cause its removal from the Microsot Advertising Network. Microsot may, in its sole discretion, label any Advertisement as a "sponsored site," "advertisement" or similar designation for clarification purposes. You will not implement and/or use technology which prohibits users rom using the "Back" button on such user's browser to return to the prior site or any Microsot site. 4. PAYMENT; REPORTING. a. Payment Calculation. You will pay Microsot the charges due for the adCenter Program based on the number of Clicks delivered by Microsot multiplied by the cost of the Advertisement, which will be computed in accordance with Microsot's standard policies, and in United States currency (the "Click Fees"). You may authorize a third party to pay Your Click Fees on Your behalf, but You are responsible for any payment obligations arising out of your participation in the adCenter Program. As used in this Agreement, one "Click" means an action associated with clicking upon or accessing, in a single instance, to a hypertext link contained in the Advertisement. b. Payment Method Selection; Payment Information. You will select an available payment program when You enroll in the adCenter Program. You will provide to Microsot any payment information (i.e., credit card, debit or check card number) required for such payment program. You represent and warrant to Microsot that any payment information that You provide to Microsot is true and accurate, and You agree that You will promptly update Microsot with any changes to such payment information. Your use of the adCenter Program constitutes Your reafflrmation that Microsot is authorized to charge Your payment method for amounts incurred in connection with the adCenter Program. Microsot may submit such charges for payment utilizing the payment information that You have supplied and You hereby agree to pay any such charges. c. Payment Frequency. You expressly authorize Microsot to charge Your payment method at least one time per calendar month for Click Fees (if any) in accordance with the applicable payment program. You understand that Microsot will suspend the display of Your Advertisements (i) for the remainder of any calendar month once an applicable monthly Click Fee budget is reached, or (ii) on the end date You specify in Your adCenter account. For the avoidance of doubt, Microsot may resume displaying Your Advertisements on the first day of each subsequent calendar month if You do not specify an end date in Your adCenter account d. Revocation of Payment Method. You may revoke at any time Your authorization for Microsot to charge your payment method for a Recurring Fixed Payment by pausing the applicable campaign(s) via the adCenter Site. Microsot will honor such revocation by the end of the second business day ater You pause one or more campaigns. You acknowledge that any revocation of such authorization may require the removal of Your Content rom the Microsot Advertising Network. You further acknowledge that (i) You remain responsible for all Click Fees incurred through the end of the second business day following the date on which You revoke Your authorization, and (ii) Microsot may charge your payment method for any unpaid amounts at the end of the billing period following the date on which you revoke Your authorization. e. Default; Taxes: Billing Disputes. If you are in default of Your obligations, Microsot may immediately charge Your payment method for any other amounts owing (e.g., amounts owing on other accounts or campaigns), remove Your Content or any part thereof rom the Microsot Advertising Network, and terminate this agreement in addition to any other rights or remedies Microsot may have. Removal of the Advertisements will not relieve You of Your obligation to pay Click Fees owing to Microsot for Click Fees that accrue prior to such removal. Click Fees due hereunder do not include taxes or other governmental fees, the computation and payment of which (other than taxes on Microsot's income) shall be Your responsibility. Microsot reserves the right to collect taxes or other governmental charges if required to do so by applicable law. You may view reports of Microsot's calculation of Click Fees online through the adCenter Site, and Microsot's reports will be the exclusive standard for billing. You understand that third parties may generate impressions or Clicks on Your ads for prohibited or improper purposes, and You accept the risk of any such impressions and Clicks. You must notiy Microsot in writing of any disputed amount within 45 days following the date of an invoice or charge to Your payment method. Following Microsot's receipt of such written notice, Microsot will research such inquiry, and will Microsoft Confidential Page 1 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56danotiy You of a resolution within a reasonable time period. The resolution of such inquiry will be determined by Microsot in its sole discretion, and Microsot has no obligation to provide a particular remedy to You. You remain obligated to pay the full invoiced amount if You fail to provide such written notice to Microsot. 5. YOUR RESPONSIBILITY FOR ADVERTISEMENTS AND YOUR WEB SITE. a. Keyword Responsibility. You are responsible for Your Content, Advertisements (including any associated Keywords that You select) and the content of any Web site linked to by Your Advertisements. Without limiting the generality of the foregoing, You hereby acknowledge that Microsot is not responsible for the content or maintenance of Your Web site(s), or Web sites owned or operated by any third party (including, without limitation, other advertisers) nor is Microsot responsible for order entry, fulfillment, payment processing, shipping, cancellations, returns or customer service concerning orders placed on Your Web site(s) or Web sites owned or operated by any third party (including, without limitation, other advertisers). b. Campaign Content. Microsot may assist you with your adCenter experience, including suggestions for certain potential keyword selections, advertising copy, budget recommendations or other elements of an advertising campaign (collectively, the "Campaign Content"). You may provide Microsot certain information about Your products or services, keyword selections, anticipated budget and other information reasonably requested by Microsot to assist you in determining the Campaign Content for advertising through Microsot AdCenter (collectively, the "Advertiser-Provided Materials"). You may authorize Microsot to access Your adCenter account to place Your Advertisements on Microsot adCenter on Your behalf. If You authorize Microsot to place Your Advertisements on Your behalf then You are deemed to have approved all placement of Your Advertisements unless You provide to Microsot contemporaneous documentary evidence showing that You disapproved such placements. You hereby grant Microsot a royalty-ree, non-exclusive, non-transferable license in perpetuity to use, reproduce and modiy the Advertiser-Provided Materials for the purpose of providing such services to You. You are solely responsible for reviewing any suggested Campaign Content and determining its truthfulness, accuracy, completeness, lawfulness and appropriateness. Without limiting the generality of the foregoing, You are solely responsible for determining whether any keywords or advertising text contained in the Campaign Content violate any trademark or other rights of any third party. The decision to use any of the Campaign Content in a campaign within Microsot AdCenter or on any other media outlet is solely Yours. c. Representations and Warranties. You represent, covenant and warrant to Microsot that: (i) the Content is accurate, complete and current, and You are fully authorized to publish the Content, and authorize Microsot to publish the Advertisements containing the Content throughout the Microsot Advertising Network; (ii) the Content, and any Web site linked to rom Your Advertisements in each case in the Microsot Advertising Network market or jurisdiction selected by You for display of Your Advertisements (w) complies with all applicable laws and regulations, (x) does not inringe, misappropriate or otherwise violate any third party intellectual property right, (y) does not breach the rights of any person or entity, including, without limitation, rights of publicity or privacy, and is not defamatory, and (z) does not and will not result in consumer raud (including being false or misleading), product liability, tort, breach of contract, injury, damage or harm of any kind to any person or entity, (iii) in the Microsot Advertising Network market or jurisdiction selected by You for display of Your Advertisements, the Keywords that you select, when used in connection with Your Advertisements, do not inringe upon or otherwise violate the trademarks or other rights of any third party, (iv) You will not, and will not authorize any third party to, use any automated means, including, without limitation, agents, robots, scripts or spiders, to access Your adCenter Program account, to monitor or copy Microsot Advertising Network or the content contained therein, or bypass Microsot's tools or services to interfere or attempt to interfere with the proper working of Microsot or the Microsot Advertising Network and will not generate automated or raudulent impressions or clicks of advertisements on the Microsot Advertising Network, (v) You are a business, not a consumer, and (vi) You will not take any action that imposes an unreasonably or disproportionately large burden on Microsot's inrastructure, including Microsot adCenter, as determined by Microsot in its discretion. d. Indemnity. You will indemniy, defend and hold Microsot and its affiliates, agents and employees harmless rom and against any and all loss, liability, and expense (including reasonable attorneys' fees) suffered or incurred by reason of any claims, proceedings or suits based on or arising out of the Content, Your Advertisements, Your Web site, Advertiser Provided Materials, Campaign Content, or any breach by You of any representation or warranty under this agreement. Microsot will have the right to participate in any defense under this Section 5.3(d) with counsel it selects, and You will not agree to any settlement that imposes any obligation or liability on Microsot without Microsot's prior written consent, 6. DISCLAIMER OF WARRANTIES; LIMITATIONS OF LIABILITY. YOU EXPRESSLY AGREE THAT YOUR USE OF THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK AND ANY ASSOCIATED PRODUCTS OR SERVICES (INCLUDING THE SUPPLEMENTAL PROGRAMS SET FORTH IN SECTION 5(b) BELOW) IS AT YOUR OWN RISK. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK AND ANY ASSOCIATED PRODUCTS OR SERVICES AND ANY MATERIALS OR OTHER SERVICES PROVIDED BY OR ON BEHALF OF MICROSOFT PURSUANT TO THIS AGREEMENT ARE PROVIDED "AS IS" AND WITH ALL DEFECTS, AND MICROSOFT HEREBY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES, AND CONDITIONS, EXPRESS OR IMPLIED, INCLUDING REPRESENTATIONS AS TO THE QUALITY OF THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK OR ANY ASSOCIATED PRODUCTS OR SERVICES, THE EFFECT THE ADVERTISEMENTS MAY HAVE ON ADVERTISER'S BUSINESS AND THE OPERABILITY OF ANY TOOLS USED BY ADVERTISER OR AGENCY TO ACCESS SUCH PARTY'S MICROSOFT ADCENTER ACCOUNT. EXCEPT FOR AMOUNTS OWING PURSUANT TO SECTION 5(c) OR A BREACH OF SECTION 8, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR EXEMPLARY DAMAGES (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF OR UNAUTHORIZED ACCESS TO INFORMATION). MICROSOFT WILL HAVE NO LIABILITY HEREUNDER BY REASON OF ANY FAILURE OR DELAY IN THE PERFORMANCE OF ITS OBLIGATIONS DUE TO FORCE MAJEURE, AND WILL NOT BE LIABLE TO ADVERTISER FOR DAMAGES IN EXCESS OF AMOUNTS ACTUALLY PAID TO MICROSOFT HEREUNDER. 7. TERMINATION. If You are dissatisfied with any aspect of an adCenter Program(s), Your sole and exclusive remedy is to cease participating in the adCenter Program and terminate this agreement upon written notice to Microsot. You and/or Microsot may terminate the agreement and/or Your participation in any adCenter Program, at any time, for any reason or for no reason. Notwithstanding anything contained in the agreement to Microsoft Confidential Page 2 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56dathe contrary, Microsot may, in its sole discretion, terminate or suspend Your account, and/or discontinue or suspend Your participation in all or part of any adCenter Program, Reasons for Microsot's determination to so terminate, suspend or discontinue Your account or participation may include, without limitation, Microsot's determination that You have violated the agreement or other policies or guidelines of Microsot applicable to the adCenter Program, Microsot's belief that Your conduct may be harmful to users or other advertisers, or Microsot's determination in its discretion that Your conduct is unlawful or likely to create legal liability for Microsot. All such decisions made by Microsot will be final and Microsot shall have no liability regarding such decisions. Upon termination, suspension or discontinuation of any adCenter Program or Your participation therein: (a) all outstanding payment obligations incurred under such adCenter Program will become immediately due and payable; and (b) if You are not managing account termination on-line through Microsot adCenter, You will be responsible for all Click Fees incurred through the date Microsot receives Your termination notice plus one (1) business day thereater. This Section and Sections 1, 4, 5, 6, 8, and 9 shall survive termination, along with any other provisions that might reasonably be deemed to survive such termination. 8. NOTICES. Microsot may give notices to You, at Microsot's option, by posting on any portion of the adCenter Site, by electronic mail to the email address provided by You to Microsot or by mail to the postal address provided by You to Microsot. Such notices are effective 48 hours ater such notice is posted or delivered. It is Your responsibility to ensure that Your e-mail address and any other contact information You provide to Microsot is updated and correct. All notices to Microsot shall be sent via recognized overnight courier or certified mail, return receipt requested, to the Microsot adCenter contract notice contacts. 9. MISCELLANEOUS. This agreement is governed by Washington law, without regard to its conflicts of law rules. You and agency (if applicable) (a) irrevocably submit to venue and personal jurisdiction in the federal and state courts in King County, Washington for any dispute arising out of or related to this agreement and waive all objections to jurisdiction and venue of such courts, and (b) agree not to commence or prosecute any such dispute other than in such courts. The prevailing party is entitled to recover its costs, including reasonable attoney's fees in any action or suit to enforce any right or remedy under this agreement or to interpret any provision of this agreement. You may not assign or otherwise dispose of this agreement without Microsot's prior written approval. This agreement binds and inures to the benefit of the parties' successors and lawful assigns. This agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or communications. Microsoft Confidential Page 3 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56daDocument hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56daVersion July 28,2006 Microsoft adCenter Terms and Conditions 1. INTRODUCTION. This is an agreement between you ("Advertiser" or "You") and Microsot Corporation (located at One Microsot Way, Redmond, WA 98052-6399) or the Microsot affiliate identified in either Microsot adCenter or Your Microsot adCenter Insertion Order if such entity is different rom Microsot Corporation ("Microsoft"), regarding Your participation in the Microsot adCenter online keyword advertising program (the "adCenter Program"). These terms and conditions, together with any Microsot adCenter Insertion Order executed (whether in electronic, paper or other format) by You or on Your behalf (each, an "Insertion Order") constitute the agreement between You and Microsot regarding Your participation in the adCenter Program. No other conditions, provisions, or terms of any sort appearing in any writings, payments, or other communications to Microsot made in connection with such orders will alter or supplement this agreement. You represent and warrant that You are authorized to enter into this agreement and act on behalf of any third party for which You generate Advertisements (as defined below). Microsot may change this agreement at any time upon notice to You in accordance with the provisions of Section 9. Your continued participation in the adCenter Program or Your use of the Microsot adCenter ater any such notice will signiy your acceptance of such change. 2. MICROSOFT ADCENTER. Subject to Your compliance with this Agreement, and such other rules and procedures as Microsot may publish rom time to time, You may access the adCenter Program through the adCenter Web site, currently located at http://adcenter.msn.com and certain related Web sites (collectively, the "adCenter Site"). Advertiser may access the adCenter Site solely to manage Advertiser's adCenter Program account, including to submit bids for the ability to display advertisements ("Advertisements") in response to certain keywords or other matching criteria ("Keywords") on the network of advertising channels operated by Microsot and, upon notice to You, Microsot's network of participating websites and other distribution outlets (collectively, the "Microsoft Advertising Network"). Advertiser will protect any passwords or other credentials associated with Advertiser's account(s), and takes full responsibility for any use of the account(s) under Advertiser's password. 3. CONTENT; PROGRAM CODE OF CONDUCT. Advertisements may include, at Microsot's discretion, text, graphics, a listing title, or a listing description. Advertiser will provide Microsot with all text, logos, images, and URLs ("Content") for the Advertisements, pursuant to the requirements set forth for the adCenter Program at htp://adcenter.msn.com including the trademark policies, editorial guidelines and creative limitations posted therein. You hereby grant Microsot a nonexclusive, royalty-free, worldwide right and license to reproduce, publicly perform, display and distribute, resize or edit the Content solely for the purpose of providing services to You in connection with this agreement. Your failure to meet applicable time requirements or specifications in connection with the delivery of Content may delay or prevent placement of the Content on the Microsot Advertising Network, or cause its removal rom the Microsot Advertising Network. Microsot may, in its sole discretion, label any Advertisement as a "sponsored site," "advertisement" or similar designation for clarification purposes. 4. PAYMENT; REPORTING. a. Payment Calculation. You will pay Microsot the charges due for the adCenter Program based on the number of Clicks delivered by Microsot multiplied by the cost of the Content, which will be computed in accordance with Microsot's standard policies, and in the applicable currency stated in Advertiser's 10 (the "Click Fees"). As used in this Agreement, one "Click" means the user action associated with clicking upon or otherwise navigating, in a single instance, to a hypertext link contained in the Content. b. Payment Method Selection: Payment Information. You will select an available payment program when You enroll in the adCenter Program. You will provide to Microsot any payment information (i.e., credit card, debit or check card number) required for such payment program. You represent and warrant to Microsot that any payment information that You provide to Microsot is true and accurate, and You agree that You will promptly update Microsot with any changes to such payment information. Your use of the adCenter Program constitutes Your reaffirmation that Microsot is authorized to charge Your payment method for amounts incurred in connection with the adCenter Program. Microsot may submit such charges for payment utilizing the payment information that You have supplied and You hereby agree to pay any such charges. c. Payment Methods. For insertions of Content extending beyond a single monthly billing cycle, you expressly preauthorize Microsot to charge Your payment method at least monthly on a recurring basis for the amount indicated in either the adCenter Program invoice or Your 10, as applicable. If You elect a fixed Click Fee budget per month (a "Recurring Fixed Prepayment"), You understand that Your Content will be removed from the Microsot Advertising Network for the remainder of the month once such fixed Click Fee budget is reached. If You have not elected a Recurring Fixed Prepayment, You authorize Microsot to charge Your payment method in a varying amount for all Click Fees incurred on Your behalf (a "Recurring Variable Net Payment"). For charges relating to a Recurring Variable Net Payment, Microsot will provide You at least ten (10) calendar days advance notice of the amount of the charge. d. Revocation of Payment Method. You may revoke at any time Your preauthorization for a Recurring Fixed Prepayment or a Recurring Variable Net Payment. Such revocation shall be in written form and shall be delivered to Microsot at ,;¦'. V¦';.-/,?.. Microsot will honor such revocation by the end of the second business day following Microsot's receipt of such revocation. You acknowledge that such revocation will require the removal of Your Content from the Microsot Advertising Network. You further acknowledge that You will remain responsible for all Click Fees incurred through the end of the second business day following the date on which Microsot receives any such revocation notice. e. Default; Taxes: Billing Disputes. Microsot may immediately charge Your payment method for any other amounts owing (e.g., amounts owing on other accounts or campaigns), remove Your Content or any part thereof from the Microsot Advertising Network, and terminate this agreement, if You are in default of Your payment obligations, in addition to any other rights or remedies Microsot may have. Removal of the Content will not relieve You of Your obligation to pay Click Fees owing to Microsoft. Click Fees due hereunder do not include taxes or other govenmental fees, the computation and payment of which (other than taxes on Microsot's income) shall be Your responsibility. Microsot reserves the right to collect taxes or other governmental charges if required to do so by applicable law. You may view reports of Microsot's calculation of Click Fees online through the adCenter Site, and Microsot's reports will be the exclusive standard for billing. You must notify Microsot in writing of any disputed amount within 45 days following the date of an invoice or charge to Your payment method. Following Microsot's receipt of such written notice, Microsot will research such inquiry, and will notiy You of a resolution within a reasonable time period. The resolution of such inquiry will be Microsoft Confidential Page 1 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da1. determined by Microsot in its sole discretion, and Microsot has no obligation to provide a particular remedy to You. You remain obligated to pay the full invoiced amount if You fail to provide such written notice to Microsot, 5. YOUR RESPONSIBILITY FOR ADVERTISEMENTS AND YOUR WEB SITE. a. Keyword Responsibility. You are completely responsible for Your Content, Advertisements and the content of any Web site linked to by Your Advertisements, and for Your selection of Keywords. Without limiting the generality of the foregoing, You hereby acknowledge that Microsot is not responsible for the content or maintenance of Your Web site(s), or Web sites owned or operated by any third party (including, without limitation, other advertisers) nor is Microsot responsible for order entry, fulfillment, payment processing, shipping, cancellations, retuns or customer service concerning orders placed on Your Web site(s) or Web sites owned or operated by any third party (including, without limitation, other advertisers). b. Representations and Warranties. You represent and warrant to Microsot that: (a) the Content is accurate, complete and current, and You are fully authorized to publish the Content, and authorize Microsot to publish the Content and the Advertisements throughout the Microsot Advertising Network; (b) the Content, and any Web site linked to rom Your Advertisements in each case in the Microsot Advertising Network market or jurisdiction selected by You for display of Your Advertisements: (i) complies with all applicable laws and regulations; (ii) does not inringe, misappropriate or otherwise violate any copyright, patent, trademark, service mark, trade secret or other intellectual property right of any third party; (iii) does not breach the rights of any person or entity, including, without limitation, rights of publicity or privacy, and is not defamatory; and (iv) does not and will not result in consumer raud (including being false or misleading), product liability, tort, breach of contract, injury, damage or harm of any kind to any person or entity, (c) in the Microsot Advertising Network market or jurisdiction selected by You for display of Your Advertisements, the Keywords that you select, when used in connection with Your Advertisements, do not inringe upon or otherwise violate the trademarks or other rights of any third party, (d) You will not, and will not authorize any third party to, use any automated means, including, without limitation, agents, robots, scripts or spiders, to access Your adCenter Program account, to monitor or copy Microsot Advertising Network or the content contained therein, or bypass Microsot's tools or services to interfere or attempt to interfere with the proper working of Microsot or the Microsot Advertising Network and will not generate automated or raudulent impressions or clicks,of advertisements on the Microsot Advertising Network; and (e) You will not take any action that imposes an unreasonably or disproportionately large burden on Microsot's inrastructure, including Microsot adCenter, as determined by Microsot in its discretion. c. Indemnity. You will indemniy, defend and hold Microsot and its affiliates, agents and employees harmless rom and against any and all loss, liability, and expense (including reasonable attorneys' fees) suffered or incurred by reason of any claims, proceedings or suits based on or arising out of the Content, Your Advertisements, Your Web site, or any breach by You of any representation or warranty under this agreement. If an agency is entering into this agreement on your behalf, agency agrees to the foregoing representations and indemnity for itself and for You, and also represents and warrants that it is Your authorized agent, and You are not, as of the date of this agreement, in material breach of any agreement with or in default with respect to any amounts owed to the agency. Microsot will have the right to participate in any defense under this Section 5.3(c) with counsel it selects, and You will not agree to any settlement that imposes any obligation or liability on Microsot without Microsot's prior written consent. 6. DISCLAIMER OF WARRANTIES; LIMITATIONS OF LIABILITY. YOU EXPRESSLY AGREE THAT YOUR USE OF THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK AND ANY ASSOCIATED PRODUCTS OR SERVICES IS AT YOUR OWN RISK. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK AND ANY ASSOCIATED PRODUCTS OR SERVICES AND ANY MATERIALS OR OTHER SERVICES PROVIDED BY OR ON BEHALF OF MICROSOFT PURSUANT TO THIS AGREEMENT ARE PROVIDED "AS IS" AND WITH ALL DEFECTS, AND MICROSOFT HEREBY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES, AND CONDITIONS, EXPRESS OR IMPLIED, INCLUDING REPRESENTATIONS AS TO THE QUALITY OF THE ADCENTER PROGRAM, THE ADCENTER SITE, THE MICROSOFT ADVERTISING NETWORK OR ANY ASSOCIATED PRODUCTS OR SERVICES, THE EFFECT THE ADVERTISEMENTS MAY HAVE ON ADVERTISER'S BUSINESS AND THE OPERABILITY OF ANY TOOLS USED BY ADVERTISER OR AGENCY TO ACCESS SUCH PARTY'S MICROSOFT ADCENTER ACCOUNT. EXCEPT FOR AMOUNTS OWING PURSUANT TO SECTION 5(c) OR A BREACH OF SECTION 8, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR EXEMPLARY DAMAGES (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF OR UNAUTHORIZED ACCESS TO INFORMATION). MICROSOFT WILL HAVE NO LIABILITY HEREUNDER BY REASON OF ANY FAILURE OR DELAY IN THE PERFORMANCE OF ITS OBLIGATIONS DUE TO FORCE MAJEURE, AND WILL NOT BE LIABLE TO ADVERTISER FOR DAMAGES IN EXCESS OF AMOUNTS ACTUALLY PAID TO MICROSOFT HEREUNDER. 7. TERMINATION. If You are dissatisfied with any aspect of an adCenter Program(s), Your sole and exclusive remedy is to cease participating in the adCenter Program and terminate this agreement upon written notice to Microsot. You and/or Microsot may terminate the agreement and/or Your participation in any adCenter Program, at any time, for any reason or for no reason. Notwithstanding anything contained in the agreement to the contrary, Microsot may, in its sole discretion, terminate or suspend Your account, and/or discontinue or suspend Your participation in all or part of any adCenter Program. Reasons for Microsot's determination to so terminate, suspend or discontinue Your account or participation may include, without limitation, Microsot's determination that You have violated the agreement or other policies or guidelines of Microsot applicable to the adCenter Program, Microsot's belief that Your conduct may be harmful to users or other advertisers, or Microsot's determination in its discretion that Your conduct is unlawful or likely to create legal liability for Microsot. All such decisions made by Microsot will be final and Microsot shall have ho liability regarding such decisions. Upon termination, suspension or discontinuation of any adCenter Program or Your participation therein: (a) all outstanding payment obligations incurred under such adCenter Program will become immediately due and payable; and (b) if You are not managing account termination on-line through Microsot adCenter, You will be responsible for all Click Fees incurred through the date Microsot receives Your termination notice plus one (1) business day thereater. This Section and Sections 1, 4, 5, 6, 8, 9 and 10 shall survive termination, along with any other provisions that might reasonably be deemed to survive such termination. Microsoft Confidential Page 2 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da8. CONFIDENTIAL INFORMATION. If the parties have entered into a Microsot Non-Disclosure Agreement ("NDA"), the parties acknowledge and agree that such NDA applies to this agreement as if fully set forth herein, and that all of the terms of this agreement (including, but not limited to, its existence) and all discussions and negotiations related thereto are considered Confidential Information of Microsot (as that term is defined in the NDA) under the NDA. If the parties have not entered into an NDA, information that is disclosed by one party to the other party, and that is marked "confidential", or which under the circumstances ought reasonably to be treated as confidential information (including the terms of this agreement), will be treated as confidential by the receiving party. The receiving party will not disclose to a third party such information, or use such information other than for the purposes for which it was provided, without the written consent of the other party; this limitation will apply for a period of one year ater disclosure of such confidential information. The foregoing limitations do not apply to the extent such information: (a) is or subsequently becomes publicly available other than through a breach of these limitations; (b) is already known to the receiving party at the time of disclosure; (c) is developed by the receiving party independent of such information; or (d) is rightfully received rom a third party without restrictions on disclosure or use. 9. NOTICES. Microsot may give notices to You, at Microsot's option, by posting on any portion of the adCenter Site, by electronic mail to the email address provided by You to Microsot or by mail to the postal address provided by You to Microsot. It is Your responsibility to ensure that Your e-mail address and any other contact information You provide to Microsot is updated and correct. All notices to Microsot shall be sent via recognized overnight courier or certified mail, return receipt requested, to the Microsot adCenter contract notice contacts. 10. MISCELLANEOUS. This agreement is governed by Washington law, without regard to its conflicts of law rules. You and agency (if applicable) (a) irrevocably submit to venue and personal jurisdiction in the federal and state courts in King County, Washington for any dispute arising out of or related to this agreement and waive all objections to jurisdiction and venue of such courts, and (b) agree not to commence or prosecute any such dispute other than in such courts. The prevailing party is entitled to recover its costs, including reasonable attoney's fees in any action or suit to enforce any right or remedy under this agreement or to interpret any provision of this agreement. You may not assign or otherwise dispose of this agreement without Microsot's prior written approval. This agreement binds and inures to the benefit of the parties' successors and lawful assigns. This agreement (and each applicable 10) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or communications. Microsoft Confidential Page 3 of 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=93f9324a-e83d-43b3-8ab3-9f20f80b56da
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