[Ecommerce] Microsoft lawyers and a consumer who fought back

[Manon Ress]

This is a multi-part message in MIME format.
--
Damn if you open the package, damn if you don't?

http://www.clevescene.com/issues/2005-03-30/news/feature_print.html


--
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

Consumer Project on Technology in Washington, DC PO Box 19367,
Washington, DC 20036, USA Tel.:  +1.202.387.8030, fax: +1.202.234.5176

Consumer Project on Technology in Geneva, 1 Route des  Morillons, CP
2100, 1211 Geneva 2, Switzerland. Tel: +41 22 791 6727

Consumer Project on Technology in London, 24 Highbury Crescent, London,
N5 1RX, UK. Tel:+44(0)207 226 6663 ex 252. Mob:+44(0)790 386 4642. Fax:
+44(0)207 354 0607




--
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>From clevescene.com
Originally published by Cleveland Scene Mar 30, 2005
=A92005 New Times, Inc. All rights reserved.

(image)[1]
Kill Bill
Microsoft's army of lawyers was no match for a kid from Kent State.
BY DENISE GROLLMUS

Ben Smallridge (image)

  Denise Grollmus (image) Microsoft threatened to take David Zamos's 2002 F=
ord
Escort to recover $143.50 in eBay profits.

  Getty Images (image) Bill Gates' software empire accused Zamos of unfair
competition.

  (image) Zamos tangled with Alex Arshinkoff (above) before taking on Bill
Gates.

  (image) By forcing Zamos to keep the software, Microsoft left him with no
option but to sell it on his own.

  Denise Grollmus (image) After Zamos went to the press, Microsoft changed =
its
tune.

  David Zamos doesn't look as if he could single-handedly humiliate the
world's largest software maker.

The well-built 21-year-old sips a jumbo cup of Starbucks coffee in the
University of Akron's student union. He's looking dapper in pin-striped
slacks, a navy pea coat, and a necklace of wooden beads that hugs his wide
neck.

Thanks to massive doses of caffeine, Zamos (whose name rhymes with "famous"=
)
anxiously taps his Camper lace-ups against the table. A laptop sits to his
right, a fat black binder to his left.

The only thing setting him apart from the other late-night crammers is that
his notebook isn't filled with study guides. It's overflowing with document=
s
from the federal lawsuit Microsoft brought against him on December 21.

For the past four months, Zamos has been fighting four high-powered attorne=
ys.
They claimed he violated trademark and copyright laws by selling two unopen=
ed
pieces of software on eBay for $203.50.

Cleveland lawyers Robert Chudakoff and Edward Simms, along with San Francis=
co
lawyers Roy Bartlett and Cameron Alston, allege that the sale cost Microsof=
t
hundreds of thousands of dollars in "irreparable damage." They demanded tha=
t
Zamos hand over his eBay profits ($143.50) and cover the company's court co=
sts
and legal fees.

The honchos at Bill Gates' empire probably thought it would be an easy,
open-and-shut case, just like the 1,045 similar suits they have filed.

"They're crazy," Zamos says of the blizzard of suits. "I think they just pu=
mp
these things out. And if you look at how many go to a decision, it's none.
People just don't show up or bother to defend themselves."

Economically speaking, it was a lopsided fight. Last year, Zamos earned
approximately $3,500. Microsoft: $38 billion.

During the whole debacle, Zamos says, he actually talked to a company lawye=
r
only once. Robert Chudakoff, who has specialized in intellectual-property l=
aw
for 25 years, apparently believed he had the kid on the ropes.

"I asked him what he wanted from me," says Zamos. "He said I needed to pay
restitution. I said I had nothing to pay with, and he said, 'You have a car=
.'
Yeah, like they're gonna take my 2002 Ford Escort. I looked it up anyway, a=
nd
they can't take your car unless it's collateral."

Though Chudakoff and the other Microsoft lawyers declined comment, it appea=
rs
that ganging up on a college student will prove embarrassing to them and to
the software titan they represent.

It wasn't any particular genius or advanced legal skills that made Zamos
different from the other defendants. It wasn't even that he was right. He
simply did his homework -- and outplayed the lawyers at their own game.

"Like I said, man, I totally looked up everything," he says.

Goliath, meet David.


---------------------------------------------------------------------------=
---

Last semester, the Kent State biochemistry major enrolled as a guest studen=
t
at the University of Akron in order to pick up a microbiology course seldom
offered at Kent. "I didn't want to be stuck in school for six years because=
 I
had to wait around to take one class," he says.

While at Akron, he decided to upgrade his computer, so he bought the
discounted educational editions of Microsoft Windows and Office XP Pro for =
$60
at the school's computer store.

When he took the software home, he realized that he'd have to reformat his
hard drive to install it. Rather than lose years of term papers and mp3s, h=
e
decided to stick with his old operating system and return the unopened
packages.

But back at the store, the cashier told Zamos that the university had an
agreement with Microsoft whereby it wouldn't accept returns on the company'=
s
software.

An Akron U. spokesman offered no comment, stating only that the school's
policy is to accept returns of all unopened software within 10 days of
purchase.

"It was probably just some stupid mess-up," says Zamos. "The store is run b=
y a
bunch of 18-year-olds anyway." He can't remember whether he missed the 10-d=
ay
window.

One attorney even suggested that he sue the University of Akron. "I'm not
going to do that," he says, rolling his eyes. "It wasn't their fault. I don=
't
even think it was Microsoft's fault. It was these lawyers."

Zamos decided to request a return directly from Microsoft, which has its ow=
n
30-day return policy.

He sent his letter by certified mail, so he knows when it arrived. But
Microsoft conveniently waited 34 days to respond. He was denied.

With two pieces of useless software on his hands, Zamos turned to his eBay
account under the username "bestprices_fastestshipping." He uses the online
auction site mostly to sell used textbooks and school supplies.

First he auctioned off the Office XP Pro for $112.50 on September 27. But w=
hen
he went to sell the Windows software, his second auction was taken down by =
a
"Microsoft investigator," who accused him of infringing on the company's
copyright, according to the lawsuit.

"I thought it was bullshit when they pulled my auction," he says. "I had no
idea what I did wrong."

Rather than simply concede, Zamos researched Microsoft's resale policy, whi=
ch
is posted on eBay.

The policy states that "qualified end users," meaning anyone associated wit=
h
an educational institution, may resell and purchase software through eBay.

Zamos began communicating with Microsoft's San Francisco lawyer, Cameron
Alston, about the matter. Alston sent him a letter defending Microsoft's ri=
ght
to shut down his auction, citing several court cases where large businesses
pirated Microsoft software and sold it.

Zamos wrote back to ask what these incidents had to do with a student
reselling two unopened pieces of software on eBay.

A month later, Alston still hadn't responded to his questions. So Zamos sim=
ply
sent a counterclaim to eBay, which allowed him to repost his sale.

He even updated his auction's web page by posting Microsoft's resale policy
verbatim. "I just cut and pasted exactly what their resale policy said and =
put
it on my platform," he says.

Zamos finally sold the Windows program for $91. He'd made a profit of $143.=
50
from both sales.

According to the lawsuit, the investigator who shut down his auction had
e-mailed Zamos on September 30, asking whether his software bore a warning
that Microsoft believed precluded Zamos from reselling it. Lawyers say Zamo=
s
acknowledged that both packages contained the warnings.

Still, Zamos felt justified. The software had never been opened, and Micros=
oft
had made a return impossible. He'd researched the company's resale policy a=
nd
understood himself to be a "qualified end user." But he couldn't be fully
aware of the licensing agreement, since it only appears when the software i=
s
loaded.

Microsoft came out firing.

A few months after the final auction, Zamos's father, David Sr., received a
cryptic FedEx letter from Alston. "I had no idea what was going on," says
David Sr. "I didn't even know she was an attorney, aside from her language.
The letterhead didn't say anything about a law firm. For all I knew, they
could have been an assemblage of trash collectors. So I wrote them back, bu=
t
they blew me off."

It wasn't until the day after Christmas that Zamos realized he'd actually b=
een
sued.

He found his case on LexisNexis. "They were so shady about the whole thing,=
"
he says.


---------------------------------------------------------------------------=
---

Zamos has run afoul of the law before, though he scarcely could be describe=
d
as a hardened criminal.

During last fall's election campaign, he was driving home on Route 303 at
around 11 p.m. when he spotted a giant Bush-Cheney sign in the front yard o=
f
the home of Summit County Republican Party Chairman Alex Arshinkoff.

The 4-by-8 foot sign had become the center of a comical fight in Hudson. Th=
e
city claimed that it violated zoning laws. Arshinkoff refused to take it do=
wn,
ironically seeking help from the ACLU, which he'd publicly bashed. Ultimate=
ly,
the sign cost him $2,900 in fines.

Inspired more by the absurdity of the situation than by the politics, Zamos
thought a prank was in order.

A can of spray paint in hand, he sneaked across Arshinkoff's lawn, only to =
be
intercepted by a security guard, whom Arshinkoff had hired to protect his
sign.

Zamos jumped into his car and sped away, but he was caught by police.

He was slapped with a $100 fine -- and a touch of embarrassment. "I don't
agree with what I was going to do," he says. "I saw this gigantic sign ever=
y
night when I was driving home from studying at Akron U. to my home in Twin
Lakes. You can probably surmise the rest."

Friends and family describe Zamos as a studious guy with a fondness for
coffeehouses. He's one of the top students in Kent's Chemistry Department.
"He's my son, so I can't be objective, but he's a very bright young man,"
David Sr. says.

When he first got wind of the lawsuit, David Sr. tried to get a lawyer for =
his
son. He called around, but the cheapest intellectual-property attorney char=
ged
$190 an hour. David Sr. couldn't afford the bill, and the lawyer wouldn't t=
ake
the case anyway. "I'm assuming that they were Chudakoff's buddies, but I ca=
n't
be sure -- though all these guys know each other," he says.

David Sr., a jazz musician, felt torn, since he has experience representing
himself. "Biochemistry is a daunting major, and I didn't want him to get
impaled on this thing to the detriment of his education," he says. "But at =
the
same time, what's right is right, and what's wrong is wrong. They had no
case."

Before the suit, Zamos had little understanding of the law. Still, he decid=
ed
to tackle the suit himself. "I fought it out of principle," he says.

As he perused the 18 pages of the suit, thick with legalese, he began putti=
ng
his study skills to use, spending hours a day at the Akron U. law library. =
He
memorized the way lawyers wrote complaints and motions, and he mimicked the
tortured language of other cases.

"I was surprised he was fighting back, but it sounded like something Dave
would do," says Amy Ritter, a fellow Kent student. "When he wants to learn
something, he's very driven."

When Zamos cracked the complaint's legal language, he realized that the sui=
t's
claims of "irreparable injury to its business reputation and goodwill" were
baseless. He hadn't pirated or stolen any software, falsely represented
Microsoft, reproduced its trademark, or repackaged its goods, as the compan=
y's
lawsuit suggests.

Microsoft even went so far as to accuse Zamos of unfair competition, claimi=
ng
that his $143.50 in profits forced the company to sustain "substantial
impact."

The suit, Zamos believed, made Microsoft -- busy flexing its muscles -- loo=
k
like nothing more than a meathead.

He also discovered that the suit was essentially a carbon copy of others th=
e
company had filed -- such as Microsoft vs. Vantandoust, where the company s=
ued
a corporation that was selling counterfeit versions of its software. "They
just tweaked a template and filed it," Zamos says.

He places page 15 of his case next to page 17 of the Vantandoust case. "If =
you
look at page 17 of this case, it's the same exact thing as my case, except
they took out the plural form, but now the verb-noun agreement is all messe=
d
up," he says. "Plus, none of these things have anything to do with me. I
didn't sell anything counterfeit."

It looked as if Microsoft lawyers were so used to defendants caving, they
hadn't even bothered to craft a suit that represented the circumstances of
Zamos's case.

So Zamos spent his Christmas vacation assembling a 21-page counterclaim, wh=
ich
he filed January 3.

He fought Microsoft's claims of trademark and copyright infringement by cit=
ing
more than 20 other cases, including a New Kids on the Block lawsuit, where =
the
boy band sued a publishing company over the use of its song titles.

The New Kids lost, since the publishing company was simply using their titl=
es
to describe the songs, just as Zamos was using the Microsoft name when he
described the software he was selling. "I was being a smartass, but it set
precedents for trademark violations," he says. "I thought my counterclaims
were solid. I didn't file anything frivolously, and I was the only one who
submitted any evidence."

But Zamos made one mistake. He wasn't, in fact, a licensed "qualified end
user," because he'd never signed the agreement that would allow him to rese=
ll
his software. And he couldn't sign the agreement until he loaded the softwa=
re.

He turned his mistake back on Microsoft, however, accusing it of deceptive
sales practices, since the agreement had essentially been hidden from him.
"How could I sign the agreement if I'd never opened the software? It didn't
make any sense," he says.

He also claimed that he'd followed the resale policies publicly posted by
Microsoft, and that he wasn't responsible if he violated any rules it faile=
d
to mention.

Microsoft responded by ridiculing Zamos's counterclaim as "premature," noti=
ng
that he had requested a summary judgment without enough time for discovery.
Obviously, the company's lawyers hadn't anticipated a fight.

Zamos went back to the drawing board and made two more motions, accusing
Microsoft of perjury, causing him emotional distress, defamation,
unconscionable consumer practices, abuse of process, fraud, and more.

The suit spiraled into a dizzying 37 filings. Every time Microsoft filed a
motion to dismiss his claims, Zamos would file more the very next day. Not
only did he force Microsoft to defend its accusations against him, but the
company was now forced to defend its own practices as well.

After two months of back-and-forth filings, the judge ordered both sides to
stop submitting any more paperwork.

Finally, Zamos gave Microsoft the migraine it hadn't expected. He requested=
 a
trial by jury, knowing that the company wouldn't want to spend tens of
thousands of dollars in legal bills just to snuff one kid in Ohio. He was
right. The lawyers said they'd drop their suit -- if Zamos dropped his
countersuit.

But that wasn't good enough for Zamos, who'd wasted hours of his time and $=
40
in Kinko's copies. He didn't want billions of dollars or a new Ford Mustang=
.
He wanted an apology and reimbursement for his copies.

"So they can file any ridiculous suit they want, and when it blows up in th=
eir
face, they can walk away from it whenever they want?" David Sr. asks. "They
claimed he was hassling them, but they filed the lawsuit!"


---------------------------------------------------------------------------=
---

When Zamos realized that Microsoft wasn't going to say it was sorry, he
decided to go to the press. It was the best move he made.

He typed up a one-page press release and contacted The Plain Dealer and
Akron's Beacon Journal. The PD blew him off, while the Beacon's Phil Trexle=
r
wrote a brief story on March 7.

What the local press didn't realize was that a college kid taking on Bill
Gates' loved and loathed kingdom would make an international story.

Zamos was in class the entire day. He'd lost his cell phone and couldn't ge=
t
any calls. It wasn't until later that evening that he realized he'd activat=
ed
his 15 minutes of fame.

At around 10 p.m. that night, he sat at his laptop in the student union, hi=
s
e-mail in-box packed with interview requests from as far away as England.
"Suddenly, I got all these requests from Washington and San Francisco," he
says. "They even wanted me to go on the Nick Cavuto show on Fox, but I didn=
't
want to go on some crazy conservative talk show -- that's scary. I just wan=
ted
to put pressure on Microsoft."

Meanwhile, the company's lawyers seemed to understand they'd created a PR
nightmare. "I got a call from Chudakoff in the early afternoon, the day the
story came out," says David Sr. "He was looking for my son, and when I aske=
d
him what for, that cockroach said he couldn't discuss the case with me,
because it defies legal ethics. So I said, 'What legal ethics?'"

When Zamos finally talked to Chudakoff, his tone had changed. "He was very
complimentary," Zamos says. "He said he was impressed by my pleadings. His
flattery was ridiculous."

Chudakoff offered him a chance to settle.


---------------------------------------------------------------------------=
---

To this day, Zamos's greatest critic remains his girlfriend. "She thinks it=
's
wrong to sue anyone ever, and that I should have just gotten out of it as f=
ast
as possible, but I have a different view of the legal system," he says. "I
think it's the only real way to effect any change. There are a lot of probl=
ems
with this country, but at least I can defend myself in a court of law, whic=
h
is saying a lot."

Zamos ponders what would have happened if he hadn't put up a fight. "I woul=
d
have just declared bankruptcy, gone to grad school, and moved in with my
girlfriend, like I was planning on anyway," he says.

When asked if he'd ever consider being a lawyer, Zamos answers, "Are you
kidding? I hate this stuff!"

He plans to go into pharmaceutical research.

Before the settlement, Zamos expressed apprehension about accepting
Chudakoff's offer. After all, it would force him to sign a nondisclosure
agreement, which would prohibit him from discussing the case ever again. "I
feel like a jerk settling, because I think more people should know about
this," he says. "It's a time-management issue, really. I don't have the tim=
e
to do all the work that goes into actually closing the case."

Zamos is no longer allowed to speak about the case, which is just the way
Microsoft wants it.

Surely the company needs to protect itself from piracy. The music industry =
has
taken much the same approach, bombarding everyone from middle-school girls =
to
college students with suits over illegal downloading. But when the fights a=
re
so lopsided, there's a tendency to underestimate the defendant and rely sol=
ely
on the superior firepower of lawyers and money.

Today, Microsoft wants nothing to do with the kid who just wanted his 60 bu=
cks
back.

The company refuses to comment on the case, offering only a written stateme=
nt
proclaiming its interest in the greater good: "Microsoft's academic program=
 is
a special low cost program that promotes education by providing students an=
d
qualified academic institutions software at reduced prices. This program ca=
n
be abused when software is purchased for academic prices and resold to the
general public."

The implication, of course, is that Zamos intentionally bought software at
educational prices in order to unload it on eBay for a tidy profit. He says=
 it
ain't so. "If I had been doing something like that, don't you think the
lawyers would have figured it out? I mean, they spent a lot of time and dou=
gh.
You'd think they'd come up with something."

Besides, Zamos says, Microsoft's own return policies forced him to take thi=
s
route. By essentially forcing Zamos to keep the software, the company left =
him
with no option but to sell it on his own. A man earning $3,500 a year can't=
 be
expected to eat a $60 purchase.


---------------------------------------------------------------------------=
---

Zamos says he'll still use the company's software. He has no choice. "I hav=
e
to, since they practically own the universe."

As he stares at his Hotmail account, loaded with interview requests and
ingratiating pleas from Chudakoff for a chance to chat, he laughs. "Today, =
I
just realized -- Microsoft owns Hotmail!"

=3D=3D=3DReferences:=3D=3D=3D
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