Memolink Lawsuit — Sued by Levi Strauss & Co.

Ever get one of those spam emails where you’re promised something, like, say, Free Levi’s 501 jeans — the email even says it’s FROM Levi’s — and then in fine print at the bottom of the email, it says that you have to join some program and complete some offers in order to get the “free” jeans?
Well, it turns out that Levi Strauss & Co. themselves got one of those emails (two different versions of it, actually), and they weren’t terribly pleased. And it also turns out that the program you were required to join to get the 501s was none other than Memolink.
Levi Strauss was understandably upset. In December 2005, they slapped Memolink with a civil suit for trademark infringement, unfair competition, false advertising, and violating CAN-SPAM. The complaint they filed is located here (you’ll need Adobe Reader to view these court documents as they’re in .pdf format). The complaint asserts, among other things, that Memolink unlawfully uses Levi’s trademarks to lure consumers into yielding personal information that they turn around and sell off to other companies. They say the emails are misleading because they’re made to look like they’re from Levi Strauss, and because they indicate that the completion of one offer is required to get the free jeans but it’s an endless succession of offers. “[Memolink] deliberately designed its internet promotion precisely to frustrate users and to depress ‘prize’ redemption rates.” “Memolink gets something for nothing: private, valuable consumer information that it can sell, while never having to part with any Levi’s product.”
The complaint goes on to allege that “Memolink, directly and/or through other agencies, sends unsolicited email messages to vast numbers of consumers…Consumers who undertake Memolink’s maze of ‘offers’ are deceived, exploited, and taken advantage of.” Because Levi’s name, pictures of their product (with the copyrighted stitching, tab labels, etc.) are prominent in the email and during the survey, Levi’s is claiming suffering severe, permanent damage to their reputation.
Levi’s is mightily displeased, which you can see by their demands, which include an injunction to prohibit Memolink from using their name, products, or copyrights, treble (that’s triple) of either their losses or Memolink’s gains plus attorney/court costs, or whatever the maximum statutory damages are allowed by law, plus $1 million per incident. They also want contact info for all the people who attempted the Free Levi’s offer so they can be contacted for corrective action. The complaint is 19 pages long — if you have time, it’s definitely an interesting read.
Memolink answered the complaint this February. It appears to me to be the legalese version of, “Says you!” with a bunch of, “I don’t know what you’re talking about”‘s thrown in for good measure. The actual words were, “denies,” “conjecture,” and “subjective characterizations.” Memolink “denies that it sends ‘unsolicited email messages,’ or that it is ‘falsely promising consumers’ anything.”
“Whatever was or is offered by Memolink speaks for itself absent of any allegations that are the product of conjecture and/or subjective characterizations on the part of LS&CO…” (meaning that hey, the fine print DOES say that you have to complete an offer or offers) They do not comment on Levi’s complaint that Memolink’s offer appears to come from them, or that Memolink is using their good name and trademarks to lure consumers in to completing offers that will result in their information being sold to third parties.
I counted 39 times in this 14 page document in which Memolink responded to Levi’s with, “Memolink is without knowledge or information sufficient as to form a belief about the allegations therein…” This is the only legal way to file an answer without either admitting or denying anything. It’s sort of like responding, “Hmmm, maybe yes, maybe no.”
Both sides requested a jury trial. The judge had both parties agree to mediation if they were unable to come to some sort of agreement by May 31st. Apparently they weren’t. On June 8, ten days ago, the court issued its case schedule, with dates assigned to various parts of the process, assuming that a settlement isn’t reached by mediation. It has the discovery process (that’s the fact-gathering phase) set to end in April 2007…so this could be a really drawn-out (and expensive) case.
If you’re a long-time reader here, you’ll recall that David Asseoff and his Memolink site are no strangers to spam charges. Memolink was found to be one of only 3 companies, out of 1,057 surveyed in early 2004, that was actively spamming. Asseoff settled a spam claim against his Trifecta Advertising company out of court in December 2004 for an unspecified amount. There’s one suit underway and another is forthcoming against Memolink/Asseoff for spamming or hiring spammers (or allowing their affiliates to spam). And I read an interesting Google Groups post just this spring where someone complained that a company called MustHaveFreeGifts.com was spamming. This site was registered to High Altitude Marketing and was also located in Colorado (as is Memolink). A check of HighAltitudeMarketing.com shows the contact name of David Asseoff and the Memolink office as the contact address. Hmmm. If you’re interested in the colorful history of Memolink, see the Related Articles section in my Memolink review here.
Whether or not Memolink was spamming in sending out the Free Levi’s offer, I’m not surprised at all to see a large corporation rebelling against having its good name tarnished at being associated with websites that have an unsavory reputation. A poster on RipOff Report claiming to be a Memolink employee (or former one) last July described Memolink’s operation as very similar to Levi’s characterization: “Memo Link Corporation claims affiliation agreements with Costco, Columbia House, Visa, Mastercard…however, if you contact these companies they will deny any affiliation. This is huge. Memolinkcorp.com uses these affiliations to gain the trust of people so they will surrender their personal information. This gathered information…is sold to whoever has the cash to fork over.”
I predict an out of court settlement in this case. While Memolink is a large operation, I doubt it has the same resources to fight an extended court case as Levi Strauss & Co. Memolink may be right in that the emails do state that offer(s) must be completed to get the jeans. Levi’s may be right in that the emails were faked to appear from them. Whether or not there was spamming involved, and whether Levi’s can prove that their reputation and good will were really harmed by this…I think those will be the grey areas that could make a case like this drag on.
My advice, Memolink? Apologize, agree to stop mentioning Levi’s, offer to send out an email to all members making it clear that you’re not affiliated with them, and offer to pay their court costs/legal fees. Not saying you’d lose if it went to trial, but you’ll go broke fighting a goliath like Levi’s…and ultimately, it’ll be your members who will pay for it.

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