Microsoft lost court case to college kid :)

[Gwarsbane]

This is a long read but well worth it. Microsoft gets owned by a college kid. Read the whole thing, you will be laughing pretty heard near the end. hehe


http://clevescene.com/issues/2005-03-30/ne...ture_print.html

Kill Bill
Microsoft's army of lawyers was no match for a kid from Kent State.
BY DENISE GROLLMUS

David Zamos doesn't look as if he could single-handedly humiliate the world's largest software maker.

The well-built 21-year-old sips a jumbo cup of Starbucks coffee in the University of Akron's student union. He's looking dapper in pin-striped slacks, a navy pea coat, and a necklace of wooden beads that hugs his wide neck.

Thanks to massive doses of caffeine, Zamos (whose name rhymes with "famous") anxiously taps his Camper lace-ups against the table. A laptop sits to his right, a fat black binder to his left.

The only thing setting him apart from the other late-night crammers is that his notebook isn't filled with study guides. It's overflowing with documents from the federal lawsuit Microsoft brought against him on December 21.

For the past four months, Zamos has been fighting four high-powered attorneys. They claimed he violated trademark and copyright laws by selling two unopened pieces of software on eBay for $203.50.

Cleveland lawyers Robert Chudakoff and Edward Simms, along with San Francisco lawyers Roy Bartlett and Cameron Alston, allege that the sale cost Microsoft hundreds of thousands of dollars in "irreparable damage." They demanded that Zamos hand over his eBay profits ($143.50) and cover the company's court costs and legal fees.

The honchos at Bill Gates' empire probably thought it would be an easy, open-and-shut case, just like the 1,045 similar suits they have filed.

"They're crazy," Zamos says of the blizzard of suits. "I think they just pump these things out. And if you look at how many go to a decision, it's none. People just don't show up or bother to defend themselves."

Economically speaking, it was a lopsided fight. Last year, Zamos earned approximately $3,500. Microsoft: $38 billion.

During the whole debacle, Zamos says, he actually talked to a company lawyer only once. Robert Chudakoff, who has specialized in intellectual-property law for 25 years, apparently believed he had the kid on the ropes.

"I asked him what he wanted from me," says Zamos. "He said I needed to pay restitution. I said I had nothing to pay with, and he said, 'You have a car.' Yeah, like they're gonna take my 2002 Ford Escort. I looked it up anyway, and they can't take your car unless it's collateral."

Though Chudakoff and the other Microsoft lawyers declined comment, it appears that ganging up on a college student will prove embarrassing to them and to the software titan they represent.

It wasn't any particular genius or advanced legal skills that made Zamos different from the other defendants. It wasn't even that he was right. He simply did his homework -- and outplayed the lawyers at their own game.

"Like I said, man, I totally looked up everything," he says.

Goliath, meet David.



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Last semester, the Kent State biochemistry major enrolled as a guest student at the University of Akron in order to pick up a microbiology course seldom offered at Kent. "I didn't want to be stuck in school for six years because I had to wait around to take one class," he says.

While at Akron, he decided to upgrade his computer, so he bought the discounted educational editions of Microsoft Windows and Office XP Pro for $60 at the school's computer store.

When he took the software home, he realized that he'd have to reformat his hard drive to install it. Rather than lose years of term papers and mp3s, he decided to stick with his old operating system and return the unopened packages.

But back at the store, the cashier told Zamos that the university had an agreement with Microsoft whereby it wouldn't accept returns on the company's software.

An Akron U. spokesman offered no comment, stating only that the school's policy is to accept returns of all unopened software within 10 days of purchase.

"It was probably just some stupid mess-up," says Zamos. "The store is run by a bunch of 18-year-olds anyway." He can't remember whether he missed the 10-day window.

One attorney even suggested that he sue the University of Akron. "I'm not going to do that," he says, rolling his eyes. "It wasn't their fault. I don't even think it was Microsoft's fault. It was these lawyers."

Zamos decided to request a return directly from Microsoft, which has its own 30-day return policy.

He sent his letter by certified mail, so he knows when it arrived. But Microsoft conveniently waited 34 days to respond. He was denied.

With two pieces of useless software on his hands, Zamos turned to his eBay account under the username "bestprices_fastestshipping." He uses the online auction site mostly to sell used textbooks and school supplies.

First he auctioned off the Office XP Pro for $112.50 on September 27. But when he went to sell the Windows software, his second auction was taken down by a "Microsoft investigator," who accused him of infringing on the company's copyright, according to the lawsuit.

"I thought it was bullshit when they pulled my auction," he says. "I had no idea what I did wrong."

Rather than simply concede, Zamos researched Microsoft's resale policy, which is posted on eBay.

The policy states that "qualified end users," meaning anyone associated with an educational institution, may resell and purchase software through eBay.

Zamos began communicating with Microsoft's San Francisco lawyer, Cameron Alston, about the matter. Alston sent him a letter defending Microsoft's right to shut down his auction, citing several court cases where large businesses pirated Microsoft software and sold it.

Zamos wrote back to ask what these incidents had to do with a student reselling two unopened pieces of software on eBay.

A month later, Alston still hadn't responded to his questions. So Zamos simply sent a counterclaim to eBay, which allowed him to repost his sale.

He even updated his auction's web page by posting Microsoft's resale policy verbatim. "I just cut and pasted exactly what their resale policy said and put it on my platform," he says.

Zamos finally sold the Windows program for $91. He'd made a profit of $143.50 from both sales.

According to the lawsuit, the investigator who shut down his auction had e-mailed Zamos on September 30, asking whether his software bore a warning that Microsoft believed precluded Zamos from reselling it. Lawyers say Zamos acknowledged that both packages contained the warnings.

Still, Zamos felt justified. The software had never been opened, and Microsoft had made a return impossible. He'd researched the company's resale policy and understood himself to be a "qualified end user." But he couldn't be fully aware of the licensing agreement, since it only appears when the software is loaded.

Microsoft came out firing.

A few months after the final auction, Zamos's father, David Sr., received a cryptic FedEx letter from Alston. "I had no idea what was going on," says David Sr. "I didn't even know she was an attorney, aside from her language. The letterhead didn't say anything about a law firm. For all I knew, they could have been an assemblage of trash collectors. So I wrote them back, but they blew me off."

It wasn't until the day after Christmas that Zamos realized he'd actually been sued.

He found his case on LexisNexis. "They were so shady about the whole thing," he says.



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Zamos has run afoul of the law before, though he scarcely could be described as a hardened criminal.

During last fall's election campaign, he was driving home on Route 303 at around 11 p.m. when he spotted a giant Bush-Cheney sign in the front yard of the home of Summit County Republican Party Chairman Alex Arshinkoff.

The 4-by-8 foot sign had become the center of a comical fight in Hudson. The city claimed that it violated zoning laws. Arshinkoff refused to take it down, ironically seeking help from the ACLU, which he'd publicly bashed. Ultimately, the sign cost him $2,900 in fines.

Inspired more by the absurdity of the situation than by the politics, Zamos thought a prank was in order.

A can of spray paint in hand, he sneaked across Arshinkoff's lawn, only to be intercepted by a security guard, whom Arshinkoff had hired to protect his sign.

Zamos jumped into his car and sped away, but he was caught by police.

He was slapped with a $100 fine -- and a touch of embarrassment. "I don't agree with what I was going to do," he says. "I saw this gigantic sign every night when I was driving home from studying at Akron U. to my home in Twin Lakes. You can probably surmise the rest."

Friends and family describe Zamos as a studious guy with a fondness for coffeehouses. He's one of the top students in Kent's Chemistry Department. "He's my son, so I can't be objective, but he's a very bright young man," David Sr. says.

When he first got wind of the lawsuit, David Sr. tried to get a lawyer for his son. He called around, but the cheapest intellectual-property attorney charged $190 an hour. David Sr. couldn't afford the bill, and the lawyer wouldn't take the case anyway. "I'm assuming that they were Chudakoff's buddies, but I can't be sure -- though all these guys know each other," he says.

David Sr., a jazz musician, felt torn, since he has experience representing himself. "Biochemistry is a daunting major, and I didn't want him to get impaled on this thing to the detriment of his education," he says. "But at the same time, what's right is right, and what's wrong is wrong. They had no case."

Before the suit, Zamos had little understanding of the law. Still, he decided to tackle the suit himself. "I fought it out of principle," he says.

As he perused the 18 pages of the suit, thick with legalese, he began putting his study skills to use, spending hours a day at the Akron U. law library. He memorized the way lawyers wrote complaints and motions, and he mimicked the tortured language of other cases.

"I was surprised he was fighting back, but it sounded like something Dave would do," says Amy Ritter, a fellow Kent student. "When he wants to learn something, he's very driven."

When Zamos cracked the complaint's legal language, he realized that the suit's claims of "irreparable injury to its business reputation and goodwill" were baseless. He hadn't pirated or stolen any software, falsely represented Microsoft, reproduced its trademark, or repackaged its goods, as the company's lawsuit suggests.

Microsoft even went so far as to accuse Zamos of unfair competition, claiming that his $143.50 in profits forced the company to sustain "substantial impact."

The suit, Zamos believed, made Microsoft -- busy flexing its muscles -- look like nothing more than a meathead.

He also discovered that the suit was essentially a carbon copy of others the company had filed -- such as Microsoft vs. Vantandoust, where the company sued a corporation that was selling counterfeit versions of its software. "They just tweaked a template and filed it," Zamos says.

He places page 15 of his case next to page 17 of the Vantandoust case. "If you look at page 17 of this case, it's the same exact thing as my case, except they took out the plural form, but now the verb-noun agreement is all messed up," he says. "Plus, none of these things have anything to do with me. I didn't sell anything counterfeit."

It looked as if Microsoft lawyers were so used to defendants caving, they hadn't even bothered to craft a suit that represented the circumstances of Zamos's case.

So Zamos spent his Christmas vacation assembling a 21-page counterclaim, which he filed January 3.

He fought Microsoft's claims of trademark and copyright infringement by citing more than 20 other cases, including a New Kids on the Block lawsuit, where the boy band sued a publishing company over the use of its song titles.

The New Kids lost, since the publishing company was simply using their titles to describe the songs, just as Zamos was using the Microsoft name when he described the software he was selling. "I was being a smartass, but it set precedents for trademark violations," he says. "I thought my counterclaims were solid. I didn't file anything frivolously, and I was the only one who submitted any evidence."

But Zamos made one mistake. He wasn't, in fact, a licensed "qualified end user," because he'd never signed the agreement that would allow him to resell his software. And he couldn't sign the agreement until he loaded the software.

He turned his mistake back on Microsoft, however, accusing it of deceptive sales practices, since the agreement had essentially been hidden from him. "How could I sign the agreement if I'd never opened the software? It didn't make any sense," he says.

He also claimed that he'd followed the resale policies publicly posted by Microsoft, and that he wasn't responsible if he violated any rules it failed to mention.

Microsoft responded by ridiculing Zamos's counterclaim as "premature," noting that he had requested a summary judgment without enough time for discovery. Obviously, the company's lawyers hadn't anticipated a fight.

Zamos went back to the drawing board and made two more motions, accusing Microsoft of perjury, causing him emotional distress, defamation, unconscionable consumer practices, abuse of process, fraud, and more.

The suit spiraled into a dizzying 37 filings. Every time Microsoft filed a motion to dismiss his claims, Zamos would file more the very next day. Not only did he force Microsoft to defend its accusations against him, but the company was now forced to defend its own practices as well.

After two months of back-and-forth filings, the judge ordered both sides to stop submitting any more paperwork.

Finally, Zamos gave Microsoft the migraine it hadn't expected. He requested a trial by jury, knowing that the company wouldn't want to spend tens of thousands of dollars in legal bills just to snuff one kid in Ohio. He was right. The lawyers said they'd drop their suit -- if Zamos dropped his countersuit.

But that wasn't good enough for Zamos, who'd wasted hours of his time and $40 in Kinko's copies. He didn't want billions of dollars or a new Ford Mustang. He wanted an apology and reimbursement for his copies.

"So they can file any ridiculous suit they want, and when it blows up in their face, they can walk away from it whenever they want?" David Sr. asks. "They claimed he was hassling them, but they filed the lawsuit!"



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When Zamos realized that Microsoft wasn't going to say it was sorry, he decided to go to the press. It was the best move he made.

He typed up a one-page press release and contacted The Plain Dealer and Akron's Beacon Journal. The PD blew him off, while the Beacon's Phil Trexler wrote a brief story on March 7.

What the local press didn't realize was that a college kid taking on Bill Gates' loved and loathed kingdom would make an international story.

Zamos was in class the entire day. He'd lost his cell phone and couldn't get any calls. It wasn't until later that evening that he realized he'd activated his 15 minutes of fame.

At around 10 p.m. that night, he sat at his laptop in the student union, his e-mail in-box packed with interview requests from as far away as England. "Suddenly, I got all these requests from Washington and San Francisco," he says. "They even wanted me to go on the Nick Cavuto show on Fox, but I didn't want to go on some crazy conservative talk show -- that's scary. I just wanted to put pressure on Microsoft."

Meanwhile, the company's lawyers seemed to understand they'd created a PR nightmare. "I got a call from Chudakoff in the early afternoon, the day the story came out," says David Sr. "He was looking for my son, and when I asked him what for, that cockroach said he couldn't discuss the case with me, because it defies legal ethics. So I said, 'What legal ethics?'"

When Zamos finally talked to Chudakoff, his tone had changed. "He was very complimentary," Zamos says. "He said he was impressed by my pleadings. His flattery was ridiculous."

Chudakoff offered him a chance to settle.



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To this day, Zamos's greatest critic remains his girlfriend. "She thinks it's wrong to sue anyone ever, and that I should have just gotten out of it as fast as possible, but I have a different view of the legal system," he says. "I think it's the only real way to effect any change. There are a lot of problems with this country, but at least I can defend myself in a court of law, which is saying a lot."

Zamos ponders what would have happened if he hadn't put up a fight. "I would have just declared bankruptcy, gone to grad school, and moved in with my girlfriend, like I was planning on anyway," he says.

When asked if he'd ever consider being a lawyer, Zamos answers, "Are you kidding? I hate this stuff!"

He plans to go into pharmaceutical research.

Before the settlement, Zamos expressed apprehension about accepting Chudakoff's offer. After all, it would force him to sign a nondisclosure agreement, which would prohibit him from discussing the case ever again. "I feel like a jerk settling, because I think more people should know about this," he says. "It's a time-management issue, really. I don't have the time to do all the work that goes into actually closing the case."

Zamos is no longer allowed to speak about the case, which is just the way Microsoft wants it.

Surely the company needs to protect itself from piracy. The music industry has taken much the same approach, bombarding everyone from middle-school girls to college students with suits over illegal downloading. But when the fights are so lopsided, there's a tendency to underestimate the defendant and rely solely on the superior firepower of lawyers and money.

Today, Microsoft wants nothing to do with the kid who just wanted his 60 bucks back.

The company refuses to comment on the case, offering only a written statement proclaiming its interest in the greater good: "Microsoft's academic program is a special low cost program that promotes education by providing students and qualified academic institutions software at reduced prices. This program can be abused when software is purchased for academic prices and resold to the general public."

The implication, of course, is that Zamos intentionally bought software at educational prices in order to unload it on eBay for a tidy profit. He says it ain't so. "If I had been doing something like that, don't you think the lawyers would have figured it out? I mean, they spent a lot of time and dough. You'd think they'd come up with something."

Besides, Zamos says, Microsoft's own return policies forced him to take this route. By essentially forcing Zamos to keep the software, the company left him with no option but to sell it on his own. A man earning $3,500 a year can't be expected to eat a $60 purchase.



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Zamos says he'll still use the company's software. He has no choice. "I have to, since they practically own the universe."

As he stares at his Hotmail account, loaded with interview requests and ingratiating pleas from Chudakoff for a chance to chat, he laughs. "Today, I just realized -- Microsoft owns Hotmail!"