Software Company Violates Unfair Competition Law


Antitrust Expert WitnessCase: Khoday v. Symantec Corp. United States District Court, D. Minnesota.March 19, 2015— F.Supp.3d —-2015 WL 127532396 Fed. R. Evid. Serv. 1360

Facts: Consumers brought class action against software company, and online retailer that sold software company’s add-on “download insurance” product, alleging violations of California’s Unfair Competition Law (UCL), California’s Consumers Legal Remedies Act (CLRA), the Minnesota Consumer Fraud Act, and unjust enrichment. Defendant Symantec is a software company that sells internet security software products under the Norton brand. Named Plaintiffs Khoday and Townsend purchased download insurance from Defendants. Plaintiff complained that defendant created a special function on the website to enable the automatic insurance download. Download insurance was automatically added to a customer’s shopping cart at the time a customer purchased Norton software through Symantec’s online storefront.To refrain from purchasing EDS or NDI, a customer would have to affirmatively “opt out” of the download insurance purchase and remove it from the cart. Plaintiff also argued that there were multiple alternative option to purchase this insurance for no cost.

Expert 1: Plaintiff brought the expert, Steven Gaskin. Steven Gaskin is a Principal at Applied Marketing Science, Inc., focusing on market research. He has worked in the field of market research and marketing science models for over 30 years. He holds Bachelor of Science and Masters of Science degrees from the Massachusetts Institute of Technology and has authored numerous articles, papers, and presentations on the subjects of marketing science and conjoint analysis, a data analytic survey method used to measure customer preferences for specific features of products. The Plaintiffs offer Gaskin as a damages expert who performed a conjoint analysis. Using this analysis, Gaskin concluded that the value of the automatic product key injection feature of EDS and NDI was worth between $00.05 and $00.16 per transaction to customer. Defendant challenged Gaskin’s testimony. More specifically, Defendants maintain that the conjoint analysis Gaskin performed is not designed to place a monetary value on a specific product attribute but rather measure user preferences for particular features and predict interest in that product

Conclusion: the court found the conjoint analysis is generally permissible method for calculating damages finding conjoint analysis survey as to customers’ “willingness to pay” for various product attributes to be “reasonably reliable. Even where there is a challenge that the survey “may not perfectly represent the class[,] that does not make it irrelevant or unhelpful.

Expert 2: The Plaintiffs offer Taylor’s expert testimony on the process of using Symantec’s website to redownload previously-purchased Norton software. Nicholas Taylor is the Web Archiving Service Manager for Stanford University Libraries specializing in content management. Taylor used archived versions of the “I want to re-download my Norton product” web page from the Internet Archive Wayback Machine (“Wayback Machine”) to describe the historical experience of a user attempting to re-download a purchased Norton product from Symantec’s website. Specifically, Taylor examined versions of Symantec’s website from 20054 to at least September 2011. Based on his review, he opines that “from at least November 20, 2007 through at least September 5, 2011, the principal instructions provided to users looking to re-download purchased software were to download and install trialware, find their product key through http://www.mynortonaccount.com/, and use the product key to activate the full version.” Taylor goes on to observe that “[a]t no time during this time frame were EDS or NDI presented as a solution for users looking to re-download their purchased software.

Defendant argued that testimony on the grounds that it merely consists of regurgitating information Taylor saw on selective websites he chose to examine through the Wayback Machine and speculation about what customers “would likely” have seen if they were using the website, neither of which constitutes an expert opinion. By law the expert testimony that merely repeats information capable of easy comprehension by jury is excludable. For it to be admissible it has go beyond the keen of people of ordinary intelligence.

Conclusion:the Court concluded, at this stage in the litigation, that Taylor’s testimony would likely be useful in providing previous versions of the website for the jury’s evaluation. Taylor’s specialized knowledge of the website archiving and retrieval process would also likely offer some assistance to the jury in understanding the relationship between various archived versions of Symantec’s websites. Because Taylor’s report is focused on explaining which versions of Symantec’s websites are available from different dates and what content would have been available to customers visiting those sites, rather than attempting to make broader conclusions about whether that content constituted a misrepresentation, it is appropriately limited in scope to Taylor’s area of expertise. Therefore, the Court denied Defendants’ motion to exclude the report and testimony of Taylor.

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