Spammer loses case filed by Microsoft

Microsoft Corp. was awarded $3.95 million yesterday in a lawsuit against a man accused of sending millions of spam messages to lure e-mail users to a Web site that illegally used a Microsoft trademark.

Judge Manuel Real of the U.S. District Court of the Central District of California ordered Daniel Khoshnood of Canoga Park, Calif., to pay Microsoft for violating the company's trademark and profiting from the use of a domain named controlled by Microsoft.

Pointcom Inc. and Joshua-than Investments, two companies managed by Mr. Khoshnood, were also named in the suits, along with 10 others.

According to court documents, Mr. Khoshnood managed two e-mail campaigns that lured consumers into downloading a toolbar that it claimed would automatically update Microsoft's security patches. To get the toolbar, users were directed to Windowsupdate.com, a domain name that Mr. Khoshnood had registered in violation of Microsoft's trademark rights, the judge said. Microsoft produces the widely used Windows computer operating system.

The judgment ordered last week was not directly connected to the amount of e-mail Mr. Khoshnood sent. But Microsoft officials said he sent millions of unsolicited e-mail messages to its MSN and Hotmail users, and that the Web site and toolbar were noticed by Microsoft after complaints by customers.

"The primary reason we were alerted to what he was doing was because of the spam he was sending," said Aaron Kornblum, a Microsoft attorney.

The case was filed in June of last year, before passage of the federal Can-Spam Act that bans most fraudulent, unsolicited commercial e-mail.

Mr. Khoshnood's name has appeared on the high-profile Registry of Known Spam Operations run by Spamhaus, a nonprofit British anti-spam group. In the 1990s he developed a reputation for gobbling up domain names like Presidentclinton.com, and Microsoft-networks.com, which he used to redirect people to Web sites featuring pornography or Web-related products, according to published reports. In 2000, the World Intellectual Property Organization's Arbitration and Mediation Center ordered the transfer of several domains registered by Mr. Khoshnood.

"This has been a running battle," Mr. Kornblum said.

Since the beginning of 2003, Microsoft has filed 60 lawsuits in the United States against people it accuses of spamming. Six of those cases have resulted in judgments, with one dismissal. Microsoft settled with four defendants and forced two others into bankruptcy. In all, Microsoft has been awarded $54 million in judgments.