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Competitor failed to back up Microsoft false advertising lawsuit with proof of injury, 11th Circuit rules

The Atlanta-based appeals court ruled that cybersecurity competitor TocMail has not shown that it suffered any injury due to ads for Microsoft’s email security software that allegedly contained false statements.

ATLANTA (CN) — A false advertising lawsuit filed by a cybersecurity competitor against Microsoft should have been tossed out by a Florida federal judge for failing to back up its claims with proof, a unanimous panel of the 11th Circuit ruled on Tuesday.

The Atlanta-based appeals court decided that it lacked jurisdiction over the case filed by TocMail Inc. concerning allegedly false statements made by Microsoft in the advertising and promotion of its Safe Links software.

TocMail claimed in a February 2020 lawsuit that Microsoft misled the public into believing that its product offered effective protection from a cybersecurity threat known as IP evasion.

The Florida-based company alleged that it offered the “only time-of-click redirection service immune to [IP evasion] attack” and that Microsoft’s “deception” kept it from breaking it into the market, causing TocMail to lose out on millions of customers and $43 billion in profits.

Although a Florida federal judge ruled in December 2021 that no reasonable jury could find that Microsoft’s ads were misleading, the 11th Circuit’s decision cuts deeper.

TocMail has not presented any evidence which would allow a jury to find that it suffered any injury due to Microsoft’s allegedly false advertising or that TocMail would have ever sold anything to any consumer, the unsigned per curiam opinion says.

“The evidence suggests that TocMail wasn’t harmed at all,” the panel’s ruling states. “All TocMail needed was some evidence that it suffered an injury: some testimony, some survey, some report. But TocMail has none. Instead, TocMail has given us nothing but conclusory (and unsupported) claims of billions of dollars in damages and speculation about what consumers may or may not have done absent Microsoft’s advertising that those consumers may or may not have seen.”

A representative for TocMail did not immediately respond to a request for comment Tuesday evening.

The case landed at the 11th Circuit after TocMail appealed the ruling handed down by U.S. District Judge Aileen Cannon, a Donald Trump appointee, in favor of Microsoft. Cannon ruled promotional materials advertising that Safe Links “proactively protects” users against URLs that might direct them to malicious sites were ambiguous rather than literally false.

An attorney for TocMail directly challenged that finding during oral arguments in the case in December, telling the panel instead that Microsoft’s software provides “zero protection” against various attacks.

Safe Links is a cybersecurity link scanning feature within Microsoft’s Advanced Threat Protection email filtering service. The software, now known as Microsoft Defender for Office 365, protects users from malicious website URLs and IP evasion attacks by evaluating the linked content and blocking the link if the site is bad.

Microsoft’s service competes with TocMail’s namesake product, which came out about four years after Safe Links debuted. It also offers protection against links that redirect to harmful content after delivery.

But Tuesday’s ruling calls the level of actual competition between the two products into question.

“For starters, TocMail sued Microsoft the day after it got its patent. At the time, TocMail had only been selling its product for two months. TocMail had done minimal advertising, and there’s no evidence that TocMail had achieved any reputation in the marketplace. And TocMail hasn’t made a single sale and has zero revenue,” the ruling says.

The panel was comprised of Senior U.S. Circuit Judge Gerald Tjoflat, a Gerald Ford appointee, and U.S. Circuit Judges Robert Luck and Kevin Newsom, both Donald Trump appointees.

The decision vacates Cannon’s ruling and orders that the case be remanded back to the lower court with instructions for dismissal due to lack of standing.

Follow @KaylaGoggin_CNS
Categories / Appeals, Courts, Law, Technology

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