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AOL awarded millions in spam case

A federal court awards America Online nearly $7 million in damages as part of the Internet service providers' legal victory over a junk e-mail operation.

A Virginia federal court awarded America Online nearly $7 million in damages as part of the Internet service providers' legal victory over a junk e-mail operation, AOL said Monday.

The award--AOL's largest compensation to date in its legal tussles with junk mailers--marks the company's second triumph over the marketer CN Productions and its owner Jay Nelson. CN and Nelson had been charged with sending, for more than four years, unsolicited and deceptive e-mail to AOL and its members. The decision in the case was reached Oct. 25 in the U.S. District Court of the Eastern District in Virginia; case documents had been sealed until recently.

The ruling is one of the first in which damages were awarded under an amended Virginia antispam statute, which mandates that offenders pay $25,000 for each day of sending junk mail in violation of the rule.

Dulles, Va.-based AOL, a unit of AOL Time Warner, was awarded the damages after CN Productions violated a court injunction set in 1999 barring it from sending AOL members deceptive, unsolicited e-mail, which accounted for up to 25 percent of the bulk mail sent through AOL.

The company originally filed suit against CN in 1998. It won a permanent injunction against the defendant a year later.

At the time, AOL had charged CN Productions with sending AOL members nearly a billion e-mails advertising adult Web sites, as well as with forging e-mail addresses that made it appear as if junk mail originated from AOL itself. The complaint said CN violated laws including the Lanham Act and the Computer Fraud and Abuse Act.

AOL's recent complaint charged the defendants with violating the court's rule by continuing to send bulk mail as part of a conspiracy that involved international third parties. The junk e-mail, piled up over two years, generated as much as $8 million in illegal gains, AOL said.

AOL has a long history of fighting junk e-mailers. The company has filed about 20 lawsuits with more than 100 defendants. It's also played up spam-filtering technology in its new Web access software, AOL 8.0, which launched in October. The software lets subscribers report spam with the click of a button. The process helps AOL bolster its filtering technology. Since the software's launch, the company said, AOL has been able to reduce the amount of incoming spam by 20 percent as a result of members' spam reports.

The company said the legal decision should send a warning to junk e-mailers.

"This is an important legal victory in the fight against spam," Randall Boe, AOL general counsel, said in a statement. "It sends a clear, distinct message to spammers: AOL is prepared to use all of the legal and technological tools available to shut down spammers."