I hunted down a copy of the formal complaint.
Here are a few screenshots of the document’s first four pages, followed by excerpts:
(Note: Excerpts below are quoted verbatim from the legal document. Coloring of certain portions of the text was done intentionally by the WoW Gold Facts author to highlight what he believes to be passages of particular interest.)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
Civil Case No. C09-0815
COMPLAINT FOR INJUNCTIVE
RELIEF AND DAMAGES
MICROSOFT CORPORATION
Plaintiff,
v.
ERIC LAM A/K/A ERIC CHUEN LAM,
MELANIE SUEN A/K/A MELANIE MA
LAN SUEN A/K/A MA LAN MELANIE
SUEN A/K/A MA LAN SUEN, GORDON
LAM, SUPER CONTINENTAL US LLC,
SUPER CONTINENTAL USA LLC, UMGE,
and DOES 1 THROUGH 50, inclusive,
Defendants
Plaintiff Microsoft Corportion (’Microsoft") brings this action against Defendants seeking injunctive relief and damages and alleges as follows:
JURISDICTION AND VENUE
1. This is an action for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with business relationship, fraudulent concealment, fraudulent misrepresentation, civil conspiracy, and violations of 18 U.S.C. § 1030, Rev. Code Wash. § 19.270.010 et seq ., and Rev. Code Wash. § 19.86.020. Microsoft seeks damages and injunctive relief to remedy Defendants’ fraudulent conduct in perpetrating a massive "click fraud" scheme on the online advertising network operated by Microsoft and to benefit all legitimate advertisers by protecting the integrity of Microsoft’s advertising network from the unfair, deceptive, and fraudulent actions of Defendants.
2. This court has subject matter jurisdiction under 28 u.S.C. §§ 1331 and 1332 and 18 U.S.C. § 1030, in that at least one cause of action arises under the laws of the United States, there is diversity of citizenship among the parties, and the amount in controversy exceeds $75,000.
THE PARTIES
5. Plaintiff Microsoft is a Washington corporation with its principle place of business in Redmond, Washington.
6. Defendant Eric Lam a/k/a/ Eric Chuen Lam ("Lam") is an individual allegedly born in Guangzhou, China in 1976, and believed to be a current resident of Vancouver, BC, Canada, or Guangzhou, China.
7. Defendant Melanie Suen, a/k/a Melanie Ma Lan Suen a/k/a Ma Lan Melanie Suen a/k/a ma Lan Suen ("Suen") is an individual believed to be a current resident of Vancouver, BC, Canada. On information and belief, Suen is the mother of Lam and is a person working with Lam in the conduct at issue here.
8. Defendant Gordon Lam ("Gordon Lam") is an individual believed to be a current resident of Vancouver, BC, Canada. On information and belief, Gordon Lam is the brother of Lam and is a person working with Lam in the conduct at issue here.
THE PRESENT CONTROVERSY
13. As part of its business, Microsoft delivers online advertising using its Microsoft adCenter ("adCenter") platform.
A. Microsoft AdCenter
14. Through adCenter, Microsoft provides advertisers with tools to help manage their advertising campaigns on Microsoft’s search engine, known as Live Search. Advertisers who use adCenter bid on keywords or keyword phrases relevant to their target market.
17. adCenter uses a ‘Pay-Per-Click" ("PPC") payment model employed by most major search engines. Under this model, an advertiser will allot a budget for a particular advertising campaign - a set of related keywords - for a set period of time. While the advertising campaign is active, the advertiser’s sponsored site will appear in the Live Search results when a user types in a query relevant to these keywords. Each time a user clicks on an adCenter’s sponsored site, the advertiser pays for that click and the charge for that sponsored site (determined on the auction basis described above) is deducted from the advertiser’s budget. Once the budget for the time period has been exhausted, the sponsored site will no longer appear for searches of those keywords or relevant queries until a new budget cycle begins. The price for each user click on a sponsored site is commonly known as Cost-Per-Click ("CPC"). CPC can range from five cents to hundreds of dollars, depending on the competition among advertisers for particular keywords.
B. Click Fraud
18. The PPC advertising model, which is used by all major search engines, can be subject to "pay-per-click fraud".
19. One type of pay-per-click fraud is "competitor click fraud". This type of click fraud occurs when a perpetrator repeatedly clicks on the sponsored site of its competitor in an effort to exhaust or deplete the competitor’s advertising budget and lower the placement of the competitor’s sponsored site, while simultaneously boosting the placement of the click fraud perpetrator’s own sponsored sites for the same keywords.
C. Auto Insurance and World of Warcraft ("WoW") Verticals
22. …… Companies selling WoW gold - including companies believed to be owned by Defendants - advertise the sale of WoW gold for real currency by bidding on keywords using adCenter and the Microsoft Network (as well as other online advertising networks).
D. Defendants’ Miconduct
23. This action arises out of Defendants’ breach of the Microsoft adCenter Terms and Conditions ("Terms and Condiitons") and general abuse of the adCenter online service.
27. Microsoft investigators initially determined that several hundreds of thousands of the Internet Protocol ("IP") addresses identified as responsible for the searches and clicks were tracing back to computer networks known as "proxy server networks" and "dedicated network hosting providers", rather than individual computers connected to the Internet."
30. In the first two weeks of December 2008, a new wave of click fraud, directed at an "exact match" - "cheap auto insurance" - impacted one specific auto insurance advertiser. During this time period, exact word click fraud impacting the WoW market originated from the same IP address as the click fraud impacting the auto insurance advertisers .
33. Over several months, Microsoft gathered substantial evidence demonstrating that Defendants are the perpetrators of the auto insurance and WoW-related click fraud on the Microsoft Network.
• Evidence linking the WoW Click Fraud to the Auto Insurance Vertical Attacks. The click fraud affecting both the WoW and auto insurance verticals on adCenter originated from identical IP address rnges, occurred during the same timeframe, and, initially, utilized identical Web browser user agent strings (the text field in an HTTP request that contains the name and version of the Web browser).
• Lam’s Unique Connection to Both Verticals. The click fraud at issue targeted sponsored sites for two ordinarily unrelated markets: auto insurance and WoW. Lam is uniquely involved in - and positioned to profit from click fraud in - both markets. Indeed, Super Continental US holds itself out as responsible for the sales and marketing of WoWMine.com, a Web site related to WoW with a domain name that is registered to Lam. At the same time, the Super Continental US LLC (USA) account on adCenter also contains campaigns related to the auto insurance vertical.
• Lam’s Other web Sites Connect to the Click Fraud Attacks.
34. Through their click fraud scheme, Defendants impacted the performance of competitors’ sponsored sites related to auto insurance and WoW, so that these competitor sponsored sites would be displaced in the sponsored site results, allowing Defendants’ sponsored sites to achieve higher ranking, and therefore higher traffic (and resulting revenues) at a relatively low cost to Defendants …….By defrauding Microsoft in this manner, Defendants gained substantial revenue that would not be generated but for this fraudulent and malicious activity and harmed both Microsoft and Defendants’ competitors, who are legitimate advertisers on the Microsoft network.
35. As this click fraud impacted the Microsoft Network, Microsoft took steps to ensure that its advertisers were not adversely affected, by issuing advertising credits to all advertisers who were impacted by the fraudulent activity. Overall, Microsoft credited nearly $1.5 million to auto insurance and WoW advertisers in direct response to Defendants’ click fraud. Apparently to divert suspicion from his own activities as the source of the fraudulent activity, Lam himself complained to Microsft about the incidence of click fraud on the Microsoft Network, and, he too was issued a small credit by Microsoft before Microsoft knew Lam himself was behind the click fraud cheme.
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