Intellectual Property Law

DMCA Coupon Flap Ends Nobody 'Won'

By Ryan Singel, Kevin Poulsen, Sarah Lai Stirland, Kim Zetter, and David Kravets

A federal judge on Thursday rejected an online coupon-generating company's bid to reopen a copyright infringement lawsuit against a North Carolina man who posted commands allowing users to print an unlimited number of valid coupons.

Coupons, Inc., based in Mountain View, California, agreed in November to dismiss the case ? a move that left unanswered whether defendant John Stottlemire's actions were unlawful under the Digital Millennium Copyright Act. The 10-year-old law prohibits circumventing technology to work around measures to prevent the duplication of what Coupons claimed were copyrighted materials.

When the settlement deal was reached in November, Stottlemire told Threat Level, "I kicked their ass." The coupon company said Stottlemire's comments breached the non-disclosure terms of the settlement, and moved a San Francisco federal court to reopen settlement negotiations to "set the record straight" that neither side "won."

"Coupons claimed it suffered reputational harm as a result of defendant's 'victory' statements," Magistrate Howard Lloyd wrote Thursday. "Any reputational harm that Coupons suffered was not the consequence of a breach."

The judge, however, ruled (.pdf) that Stottlemire did breach the agreement, but that it was not egregious enough to re-open the case.

Ironically, Coupons recently filed the secret settlement (.pdf) with the court without sealing it. It says each side agrees to release the other from any litigation.

Coupons sued Stottlemire in 2007 after he posted the code on his tenbucks.net personal website, along with instructions showing shoppers how to circumvent copy protection on downloadable, printable coupons from Colgate, General Foods and others, for everything from cereal to soap.

Stottlemire insisted he did not circumvent any technology and instead found a weakness in Coupons' software. Removing the key to the software's program limiting coupon production allowed users to acquire an unlimited number of coupons with unique, functioning serial codes.

Photo: JasonJT's Photostream

See Also:

• EFF and U.C. Berkeley Defend Accused Coupon Hacker in DMCA Suit ...
• Online Burger Promotion Pulled After Going Too Viral
• Coupon Hacker Defeats DMCA Suit
• Coupon Hacker Faces DMCA Lawsuit
• Downloadable Coupons Come With Sneaky Extras, Researcher Says

Full post as published by Threat Level on April 09, 2009 (boomark / email).