Sep 092011
 September 9, 2011  Posted by  Business, Court, Online

Wendy Davis reports:

Last month, Web user Betsy Feist alleged in a lawsuit that the company Paxfire and Internet service provider RCN “intercepted, monitored, marketed, and divulged” her search history to a third party.

The claims largely stemmed from a report that RCN and other ISPs were working with Paxfire to divert search traffic by sending some users who queried on brand names directly to marketers’ pages, rather than returning search results for those queries.

Paxfire has now fired back with a $80 million countersuit against Feist.


In its counterclaim against Feist, the company says she defamed Paxfire with her allegations and also interfered with its business relationships. Paxfire says that it lost several contracts as a result of Feist’s allegations, including deals with LinkShare and the ISP XO Communications.

People typically can’t be sued for defamation based on claims they make in court papers. Paxfire alleges that Feist (or her attorneys and agents) defamed it by making statements about the company to the publication New Scientist and advocacy group Electronic Frontier Foundation.

Read more on MediaPost.

Wow… talk about potentially chilling effects.  This is another lawsuit to watch.

Update: I’ve uploaded a copy of Paxfire’s response to Feist’s complaint and counterclaim (30 pp. pdf).  Paxfire is countersuing Feist for $30 million in compensatory damages and $50 million in punitive damages.

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