New York sues Network Associates over license terms

New York state Attorney General Eliot Spitzer Thursday filed suit against Network Associates Inc. seeking to end restrictions that he charges Network Associates places on what its customers may say about the company.

According to the suit, Network Associates' (NAI) software licenses prohibit its customers from posting informal product reviews or tests without the company's permission. Such provisions, Spitzer charges, constitute an illegal "restrictive covenant" which harm the public by preempting discussion of any flaws in NAI's products. NAI is the parent company of McAfee, McAfee.com Corp. and Sniffer Technologies Inc.

The Attorney General's suit further alleges that the language in the license terms abridges both the media's and consumers' First Amendment right to free speech and their fair use rights. Spitzer's suit cites, as an example, a 1999 exchange between Network World magazine and NAI in which NAI, citing these clauses, demanded that Network World retract a negative review. Network World is an affiliate of the IDG News Service and both are owned by the same parent company, the International Data Group Inc.

Also, the suit charges that NAI justifies such restrictions by citing "existing rules and regulations" when no such rules exist and therefore is engaging in an awful deceptive practice.

Spitzer is seeking to prevent enforcement of the clauses at issue, as well as recover costs and penalties from NAI.

For its part, NAI denies any wrongdoing.

"The language that is being complained of ... was designed to make sure that consumers receive the best possible information from reviewers," according to Kent Roberts, executive vice president and legal counsel for Network Associates.

The licensing terms were written to help ensure that reviewers would get the right products and information, and then pass that information on through their reviews, he said. The language in NAI's licenses was changed about two months ago, though it still tries to achieve the same goal, he added. The language was changed after discussion with Attorney General Spitzer, but not at his request, Roberts said. The new terms suggest, rather than direct, Roberts said, noting that they ask reviewers to contact NAI, and explain they risk being inaccurate if such contact is not made.

Attorney General Spitzer's office, however, disputes this claim.

"Just because they claim to have modified it doesn't make it so," said Brad Maione, a spokesman in the Attorney General's office.

Staffers in the office checked the terms of a recent NAI license Thursday and found it still contained the language at issue, Maione said. Roberts said, however, that some older copies or boxed software that were manufactured before the change might still bear the old language. Maione was not sure whether the software checked Thursday was of recent vintage.

Even if the license terms hadn't been changed, the company is "well within (its) rights," Roberts said.

"In general, you have the right to define the scope of the license for software" however you want, he said.

"I don't think it's an issue for (consumers)," Roberts said.

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