Cursor. Foiled Again.

Defendant Comet Systems is willing to settle a class-action lawsuit filed in
the U.S. District Court Southern District of New York.

At the heart of the matter is the Comet Cursor, a patented technology
that allows Web surfers to change their cursors into custom images.
According to a lawsuit filed by plaintiff Richard C. Bieles Jr., the cursor’s Ver.1.X. software
technology violates online privacy standards.

The lawsuit was filed shortly after reports appeared in the press in
November 1999, alleging that the Comet Cursor “tracked” users. Those reports
have since been retracted or corrected by Time Digital, Reuters, Business
Week, Industry Standard, ABCNews.com, Christian Science Monitor, ZD Net, PC
Magazine, CNET, and others, pointed out Ben Austin, director of marketing for Comet Systems.

“We do not track users, we do not collect identifiable information and we do not profile our users,” Austin said. “When these publications realized their reports were based on inaccurate information, we saw corrections in 250 daily publications,” he said. As a result, of the retractions, Austin is dubious as to how many people are involved in the class-action case.

The class-action filing alleges that Comet Systems “intentionally failed to advise its software users of its invasive course of conduct, failing to disclose its conduct either on its
Internet Web site or elsewhere and that as a result of Comet Systems
allegedly deceptive, invasive and fraudulent actions, the plaintiff and
Class have been damaged.”

The brief goes on to infer that the plaintiffs have been subject to
repeated invasions of their privacy and have used a software product that
would “allegedly have not otherwise obtained and/or used in current form had
Comet Systems disclosed the truth of its allegedly wrongful conduct.”

Although Comet denies the charges, the company feels it would be best if
the Action were settled and dismissed. “We are eager to settle with opposing counsel and get back to the business of what we do,” Austin said.

The settlement calls for Comet to:

• Revise its privacy policy.
• Provide a downloadable computer program that deletes Comet Cursor
  Ver.1.X. software technology from a user’s system and provide clearly market
  links to that Clean Program.
• Provide capabilities for users to remove any existing unique
  identifying numbers from the Comet Cursor Ver.1.X. software technology and
  provide clearly marked links to information regarding Comet’s privacy
  policies.
• Ensure that any unique alphanumeric identifiers associated with the
  Comet Cursor Ver.1.X. software technology does not include a Media Access
  Control address.
• Extend best efforts to pursue and retain third-party certification to
  certify and approve its privacy policies as they related to the cursor
  software technology.
• Extend best efforts to notify cursor users in advance of any technology
  changes.

Austin noted that some elements of the settlement are “things we have already been doing,” such as allowing users to uninstall the software.

A Fairness Hearing is scheduled for January 17, 2001. At that time, the
Court will consider whether it should approve the settlement and dismiss the
Action.

During that hearing, the plaintiff’s lead counsel will also seek an
award of the attorney’s fees in the amount up to $300,000, plus accrued
interest to be paid by Comet, as well as an award of up to $7,500 to be paid
by Comet as reimbursement of counsel costs and expenses incurred in the
prosecution of the action.

“I don’t think there is any precedent for this,” said Diane Zilka, Esq., of Goodkind Labaton Rudoff & Sucharow LLP, co-counsel for plaintiffs. “It think it is good that [Comet] came up to the plate and was willing to modify some of its practices. This is a good thing — for the company and for the users our there of them and their product — but a

lso to get a sense for a model as to how privacy concerns, vis a vis privacy statements, and how companies’ interactaction with their customers can proceed.”