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Symantec Can’t Shake ‘Insurance’ Fraud Claims

MINNEAPOLIS (CN) - The makers of Norton Antivirus software must face claims they misled consumers into purchasing a superfluous "download insurance" add-on, a federal judge ruled.

A class of consumers who purchased the "insurance" for between $5 and $10 says that the ability to redownload the software after 60 days was already included in the program.

The suit was filed in 2011 for violations of California's Unfair Competition Law and Consumers Legal Remedy Act, as well as violations of Minnesota's Consumer Fraud Act and unjust enrichment.

U.S. District Court Judge John R. Tunheim had already refused to dismiss the case in March 2014, but Symantec filed another motion for summary judgment on May 15, 2014.

The company claimed the language describing the download insurance on its website - which noted it was the only "guaranteed" way to redownload the antivirus program - did not violate any laws.

It argued that, while there were other alternatives to the insurance, none of them were guaranteed.

Symantec's reasoning did not fly with Judge Tunheim, who wrote: "Where a technically true fact can still be misleading, an obligation arises 'to disclose all other facts which 'materially qualify' the limited facts disclosed.' ... In Symantec's case, irrespective of whether [the insurance] was the only 'guaranteed' redownload option, the evidence suggests that Symantec continued to provide the alternative options like trialware for the duration of the relevant time period."

Alternatively, the company claimed the plaintiffs "suffered no economic loss by purchasing [the insurance], because the benefit [they] sought - a guarantee that [they] would be able to redownload [their] software beyond sixty days - is precisely what [they] received."

Judge Tunheim disagreed, and wrote: "Multiple sources in the record indicate that customers could redownload the Norton software through both the customer support website and trialware. Although Symantec contends that it could have ceased offering these options at any time, it has offered no evidence that the company ever discussed or considered eliminating the alternatives. Because [the plaintiff's] deposition suggests that she would have acted differently had she been apprised of this information, a genuine issue of material fact remains as to whether her reliance on Symantec's representations caused her to suffer harm."

The plaintiffs and defendants also filed motions to exclude the other's expert testimony.

Judge Tunheim denied all of these motions, with the exception of a request by Symantec to exclude testimony regarding how consumers would download the insurance and how easily they could have rejected the product.

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