Microsoft sued in e-greeting spat

Blue Mountain says software giant rigged Web browser to delete rival's products.

Microsoft Corp. rejected claims by online greeting card site Blue Mountain Arts Inc. that its browser software trashes the site's e-mail greeting cards -- saying the cards sometimes get caught in, but not deleted by, a spam filter that the user can turn off.

In a lawsuit filed Dec. 8 in Santa Clara, Calif., Superior Court, Blue Mountain claims that Microsoft (Nasdaq:MSFT) tried to discredit Blue Mountain in order to eliminate competition for its own new online greeting card effort.

Blue Mountain's e-greetings service has grown into a lucrative advertising vehicle. The company's suit claims this attempt came at the same time as Microsoft debuted a similar service.

"It's just not true," Microsoft spokesman Tom Pilla said of Blue Mountain's claim.

The beta version of Internet Explorer 5.0 and the WebTV Internet browsing software contain a filter for unsolicited commercial e-mail "that ships in the off position," and that users must choose to activate, Pilla said.

Online greeting cards, including Microsoft's e-mail cards, are sometimes re-routed from the user's e-mail inbox to a junk-mail folder because they contain certain key words, he said. "It's not deleted; it's just moved," Pilla said.

Microsoft has tried to work with Blue Mountain to help it alter the cards so they won't get caught in the filter, he said, adding he is not sure which specific terms in Blue Mountain's cards might trigger the filter. But Pilla said words such as "free" repeated in an e-mail will generally trigger the anti-spam system.

'Disrupt and destroy'
But Blue Mountain's lawsuit claims that Microsoft launched a "systematic" attempt to "disrupt and ultimately destroy" its online greeting card business. The Blue Mountain site began getting reports of difficulties late last month. This was "at or about the same time Microsoft created its competing Web site for electronic greeting cards," according to the lawsuit.

The suit alleges that a version of Microsoft's Internet Explorer browser contains a "filter" that "relegates Blue Mountain's greeting cards to a junk mail folder for immediate discard, rather than receipt by the intended recipient."

WebTV also a defendant
Users of Microsoft's WebTV system have reported the same problem, according to the suit, which also names WebTV Networks Inc. as a defendant.

"The effect of this is that Microsoft, through its dominant Internet browser, is able to block Blue Mountain from delivering its electronic greetings cards to the intended recipients during the critical holiday season," the lawsuit states.

While Blue Mountain's main business is poetry publishing, the company does earn ad revenue from its free greeting card service. In the suit, Blue Mountain alleges that by blocking its cards, Microsoft could grab additional ad revenue.

Blue Mountain claims to have evidence that "thousands" of its greeting cards were blocked from being received by WebTV subscribers. Company officials also allege in the lawsuit that Microsoft refused their request to correct the problem in Internet Explorer and in the WebTV software.

The lead attorney on the case is longtime Microsoft foe Gary Reback of the Palo Alto, Calif., law firm Wilson Sonsini Goodrich & Rosatio.

Microsoft's Pilla said Reback's involvement is evidence that the suit is "frivolous" and said the company intends to file a response shortly.


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