FTC v. Phoenix Avatar, LLC 2004 WL 1746698 (N.D.Ill.)
Parties
Plaintiff- FTC
Defendant – Phoenix Avatar (and 4 named defendants)
Procedural History
A temporary restraining order was entered April 23, 2004 and has continued.
Issue
Should a preliminary injunction be ordered against defendant for violation of FTC Act and CAN-SPAM statute?
Facts/Evidence
An FTC agent found that certain spam messages stored in their database of spam messages forwarded from internet users hyperlinked to web pages with similar content but different domain names. The FTC identified 108 “Avatar†domain names. Those domain names were registered to 22 persons in various countries. The FTC made several undercover purchases including two of a Med Diet Patch. From those purchases, the FTC was able to identify the defendants who operate Avatar. The web page involved contained misleading information about the patches including guaranteeing weight loss. Expert testimony for FTC said none of the ingredients could cause weight loss. Expert testimony for the FTC on SPAM discussed the “open proxy†used by the defendants to hide their identity. The expert testified that no technical method existed to determine the source of the e-mails. Evidence was presented (financial and business information) that connected the defendants to the deceptive e-mails, web pages and sales.
Decision
The FTC requested the preliminary injunction pursuant to 15 USC § 53(b) under the “public interest†test. The threshold showing adopted by the court is a “better than negligible chance of success on the merits†test. The court decided that the FTC showed a high likelihood of success on the merits that defendants violated both the FTC Act and CAN-SPAM by using deceptive information and hiding their identities on-line.
Holding
The court granted the preliminary injunction until the case can be heard on its merits and until final judgment or further order of the court. The injunction precludes inter alia:
1. Represent this or any other patch causes weight loss
2. Misrepresent any consumer product
3. Initiate transmission of e-mail with false header information
4. Initiate e-mail without clear and conspicuous notice of opportunity to decline further e-mails
5. Fail to include physical postal address of sender in e-mail
6. Use of any assets owned, possessed, accessed, or controlled by defendants except agreed by FTC
7. Incurring credit card charges
And defendants must maintain all records pertaining to this matter
Parties
Plaintiff- FTC
Defendant – Phoenix Avatar (and 4 named defendants)
Procedural History
A temporary restraining order was entered April 23, 2004 and has continued.
Issue
Should a preliminary injunction be ordered against defendant for violation of FTC Act and CAN-SPAM statute?
Facts/Evidence
An FTC agent found that certain spam messages stored in their database of spam messages forwarded from internet users hyperlinked to web pages with similar content but different domain names. The FTC identified 108 “Avatar†domain names. Those domain names were registered to 22 persons in various countries. The FTC made several undercover purchases including two of a Med Diet Patch. From those purchases, the FTC was able to identify the defendants who operate Avatar. The web page involved contained misleading information about the patches including guaranteeing weight loss. Expert testimony for FTC said none of the ingredients could cause weight loss. Expert testimony for the FTC on SPAM discussed the “open proxy†used by the defendants to hide their identity. The expert testified that no technical method existed to determine the source of the e-mails. Evidence was presented (financial and business information) that connected the defendants to the deceptive e-mails, web pages and sales.
Decision
The FTC requested the preliminary injunction pursuant to 15 USC § 53(b) under the “public interest†test. The threshold showing adopted by the court is a “better than negligible chance of success on the merits†test. The court decided that the FTC showed a high likelihood of success on the merits that defendants violated both the FTC Act and CAN-SPAM by using deceptive information and hiding their identities on-line.
Holding
The court granted the preliminary injunction until the case can be heard on its merits and until final judgment or further order of the court. The injunction precludes inter alia:
1. Represent this or any other patch causes weight loss
2. Misrepresent any consumer product
3. Initiate transmission of e-mail with false header information
4. Initiate e-mail without clear and conspicuous notice of opportunity to decline further e-mails
5. Fail to include physical postal address of sender in e-mail
6. Use of any assets owned, possessed, accessed, or controlled by defendants except agreed by FTC
7. Incurring credit card charges
And defendants must maintain all records pertaining to this matter