WhenU Suit Delays Utah Anti-Spyware Law

WhenU’s suit against the state of Utah over the state’s new anti-spyware statute has forced a delay in the law’s taking effect.

The Spyware Control Act, scheduled to take effect May 3, has been delayed until May 28 to allow time for a hearing, in which WhenU will argue for a preliminary injunction against the statute.

“We [the Attorney General’s office] are filing a stipulated order to delay the effective date of the Spyware Control Act until after the hearing,” said Paxton Guymon, who is arguing the case for Utah’s Attorney General’s Office, named in WhenU’s lawsuit. “The judge couldn’t give us a hearing date before May 21. It’s simply a matter of timing.”

In the hearing, WhenU will seek a preliminary injunction delaying the law until a full-blown trial can be held to test its claims that the law is unconstitutional and limits companies’ right to commercial speech. The adware company filed the lawsuit against the state of Utah, its governor, Olene Walker, and Mark Shurtleff, its attorney general (AG) on April 12.

WhenU’s suit seeks a declaration that Utah’s Spyware Control Act violates the U.S. and Utah Constitutions.

The recently passed Act prohibits the installation of spyware on a person’s computer. It also makes it illegal to “use a context based triggering mechanism to display an advertisement that… covers or obscures paid advertising or other content on an Internet Web site.”

The Act would effectively make software by WhenU, along with that of rival Claria, illegal in Utah. Both make applications that track online behavior and use that behavioral information to target ads, which pop up while users are surfing Web sites.

Adware and spyware are of growing concern to businesses and consumers alike. A recent study found the average computer houses roughly 28 items of monitoring software, unbeknownst to the user, according to Earthlink and Webroot Software. Addressing these and other concerns, the FTC held a public forum this week on the subject.

Also, U.S. Sens. Conrad Burns and Barbara Boxer recently introduced legislation to prohibit spyware, adware and other intrusive software. The proposed act, known as SPYBLOCK, would make it illegal to install software on a user’s computer without notice and consent.

The May 21 hearing will take place in the Third Judicial District Court of Utah before Judge Joseph Fratto. Both sides will present evidence and expert witnesses for and against the preliminary injunction.

The AG will oppose the injunction. “It could take 6 to 18 months for the case to come to trial, and that’s too long” to postpone implementation of the law, Guymon said.

“I would be surprised if WhenU pursues anything beyond the May 21 hearing if they lose,” said Guymon. If the judge does not put the preliminary injunction into effect, it suggests that he doesn’t think WhenU will win its case when it goes to trial, according to Guymon.

If the preliminary injunction isn’t granted, WhenU will be prohibited from doing business in Utah until the case comes to trial.

Guymon and his colleague Blake Miller of Miller, Magleby & Guymon, a Salt Lake City law firm, are representing the AG’s office in the case. Guymon said his firm was picked for the job because Miller has expertise in technical software issues.

Attorney Michael D. Paley of Kronish Lieb Weiner & Hellman LLP, the New York law firm representing WhenU, declined to comment on the matter.