Monday, January 28, 2013

ambiguity of "authenticity" defeats literal falsity claim

Kwan Software Engineering, Inc. v. Foray Technologies, LLC, 2013 WL 244999 (N.D. Cal.)

Plaintiff, known as Veripic, moved to enjoin its competitor Foray from making certain claims about its technology.  It had copyright, DMCA, and related claims, but only sought injunctive relief on its false advertising claims, which the court denied.

Both parties make software for handling digital evidence for police departments and similar entities.  Veripic sells the Digital Photo Lab (DPL) while Foray sells the Authenticated Digital Asset Management System (ADAMS) software.  ADAMS employs a hash function that allows a user to validate whether digital evidence “has been manipulated or altered between the time it is entered into the ADAMS software system and a later time when a user wishes to make use of that piece of digital evidence.”  Veripic has similar technology, but it also allows users to validate whether the digital evidence has been altered from the moment a picture was originally taken.

Basically, Veripic argued that Foray falsely advertised that its software could “authenticate” images according to guidelines propounded by the Scientific Working Group on Imaging Technology (SWGIT), when in fact it could only guarantee “integrity.”  Authenticity, Veripic argued, required further validation of whether the picture was an accurate depiction of the world (subject matter authenticity), not just whether it had been altered once entered into the system (acquisition authenticity). 

This was a literal falsity claim only.  The court therefore looked at the meaning of “authenticity” as the term was understood by law enforcement customers and others in the market for digital evidence management software, and found that “integrity” and “authenticity” were “ambiguous, overlapping, and sometimes interchangeable.”  On the evidence before the court, numerous relevant entities—including SWGIT and even Veripic—went back and forth, sometimes distinguishing “authentication” from “integrity” and sometimes using “authentication” to mean “integrity.”  Thus, Veripic didn’t show it was likely to succeed on the merits.

Veripic also complained of other statements, such as that ADAMS was the only software that complied “with the SWGIT ‘requirement’ contained in the workflow described in Section 13, Best Practices for Maintaining the Integrity of Digital Images and Digital Video of the SWGIT Guidelines…. While some vendors may claim they are ASCLD or SWGIT compliant, no other digital evidence management vendor complies with the SWGIT workflow # 2 [described in Section 13].”  

The court found that this wasn’t literally false, even though the workflow #2 was only an example and not required to comply with the best practices.  ADAMS used a series of steps “known to be wanted or needed by the example workflow”—which fit the OED definition of “requirement.”  Moreover, Veripic’s DPL could achieve a similar result, but not by complying with example #2.  Veripic “specifically eschewed” the process set out in #2 as cumbersome and offered a different solution (though one that also apparently complied with the best practices). So ADAMS literally complies with example #2 and DPL doesn’t, and there was no threshold showing of literal falsity.

Veripic also didn’t show irreparable harm, despite “a speculative declaration from its company president in which he states that six customers have told Veripic that it was their understanding that ‘Foray authenticated digital images in the same manner as Veripic.’” First, Veripic should have been aware of the alleged misrepresentations since at least June 2011, when Seattle made Foray’s RFP response available to Veripic; that contained the offending statements.  This delay “hardly bespeaks of the urgency typical in successful preliminary injunction motions.” Second, the court didn’t think the evidence showed anything more than legitimate competition.  “In fact, most customers purchase one of these competing software suites only after first reviewing responses to requests for proposals, company presentations and extensive research.”  Lost customers might well be the result of full understanding and preference for one product over the other.  Though the public interest in the integrity of law enforcement evidence was great, the court was willing to rely on the sophisticated customers’ careful investment in purchase decisions to protect it.

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