Mizera v. Google

Filing 21

Attachment 2
Declaration of David J. Silbert in Support of 20 MOTION to Stay : Defendant Google Inc's Motion to Stay Pending Settlement filed byGoogle Inc.,. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(Related document(s)20) (Silbert, David) (Filed on 3/9/2006)

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Mizera v. Google Doc. 21 Att. 2 Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 1 of 19 EXHIBIT B Dockets.Justia.com Case 5:05-cv-02885-RMW '. Document 21-3 Filed 03/09/2006 Page 2 of 19 Case 5:05-cv-02579-PVT Document 1 e Filed 06/24/2005 Page 1 of 18 e RICHA L. KELLNER SBN 171416 350 South Grand Avenue, 39 Floor 3 Los Angeles, California 90071-3801 2 KABATECKBROWNK L~NERLLP Telephone: (213.) 217-5000 4 Facsimile: (213) 217-5010 FRANK E. MARCHETT SBN 203185 'R l:. 12~f/ing JlAt . ui '" '' ) 1/ ~ ' Y,y 4it~tYfrA~ i \. (1. . o..~ l iC . "..?oo. /' ztVl~:O 'V ~ lpi oSA'Y/cl1T10 7$'l; 5 SHAWN KHORRMI SBN 180411 6 14550 Haynes Street, Third Floor Van Nuys, California 91411 7 Telephone: (818) 947-5111 Facsimile: (818) 947-5121 8 LAW OFFICES OF SHA WN KHORRMI ~~i-D/~. /I / vOoSgA-~Co~t1G ,11 / iJ Al-k(jr. /t(1 1'/ '1 _.~ \: 9 DARN T. KALAN (To be admitted pro hac vice) CHITWOOD HAEY BARNS LLP 10 2300 Promenade II GREGORY E. KELLERfTo be admitted pro hac vice) l 230 Peachtree Street, N.E. l~ 11 Atlanta, Georgia 30309 Telephone: (404) 873-3900 12 Facsimile: (404) 876-4476 13 Attorneys for Plaintiffs 14 15 ;V t $ SAN JOSE DIVISION UNITED STATES DISTRICT COURT 16 NORTHERN DISTRICT OF CALIFORNIA 17 18 19 20 21 CLICK DEFENSE INC., a Colorado corporation, Individually and on behalf of all others similarly situated Plaintiffs, caGO 0 22 23 FOR: . AND CLASS ACTION COMPLAINT 1. BREACH OF CONTRACT; 2. NEGLIGENCE; 3. UNJUST ENRICHMENT; -againstGOOGLE, INC., a Delaware corporation, and DOES 1 THROUGH 100, Inclusive, 24 25 26 Defendants. 27 28 4. UNFAIR BUSINESS PRACTICES (CALIFORNIA BUSINESS & PROFESSIONS CODE 17200, ET SEQ.) JURY TRIAL DEMANDED 1 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 3 of 19 Case S:OS-CV-02SWVT Document 1 Filed 06/2.0S Page 2 of 18 Plaintiff Click Defense, Inc., by and through its attorneys, alleges the 2 following upon information and belief, except as to those allegations concerning 3 Plaintiff, which are alleged upon personal knowledge. Plaintiffs information and 4 belief are based upon, among other things, its and/or counsels' investigation, which filings made by Google, Inc. 5 included without limitation: (a) review and analysis of 6 ("Google") with the United States Securities and Exchange Commission ("SEC"); 7 (b) review and analysis of information posted by Google at 8 https://adwords.google.com/select/ogin and https://ww.google.com/adsense/; (c) 9 review and analysis of press releases and other publications disseminated by Google; 10 (d) review of news articles and postings on various Internet forums concerning 11 Google's "AdWords" and "AdSense" programs; and (e) review of other publicly 12 available information concerning Google. Plaintiff believes that further substantial 13 evidentiary support wil exist for the allegations herein after a reasonable opportunity the facts supporting the allegations contained herein are 14 for discovery. Many of 15 known only to Google or are within its control. 16 SUMMARY OF CLAIMS 17 1. This is a class action against Google for Breach of Contract, 18 Negligence, Unjust Enrichment and Unfair Business Practices (California Business 19 & Professions Code 17200, Et Seq.). Plaintiff brings this action on behalf of itself their related parties 20 and all other persons or entities, except for Google and certain of 21 as described below, who, within the past five years, have paid money to Google for 22 advertising through Google' s "AdWords" program. 23 THE PARTIES 24 2. Plaintiff Click Defense, Inc. is a corporation organized under the laws 25 ofthe State of Colorado with its principal place of business in Fort Collns, 26 Colorado. Plaintiff is, and was at all times herein mentioned, qualified to do 27 business in Colorado. Plaintiff is ~ngaged in the business of providing software and 28 services designed to keep track of PayPer-Click advertising. Plaintiff brings this 2 Class Action Complaint Case 5:05-cv-02885-RMW i. Document 21-3 Filed 03/09/2006 Page 4 of 19 Case 5:05-CV-0257I1VT Document 1 Filed 06/24/.5 Page 3 of 18 1 action individually and as a class action under rule 23 of the Federal Rules of Civil 2 3 Procedure on behalf of all persons and/or entities that paid money to Google for advertising through Google's "AdWords" program. 3. Defendant Google is a corporation organized under the laws of the State of Delaware, with its principal place of 4 5 business in Mountain View, California, 6 which is within the Northern District of California. Google is, and was at all times 7 8 herein mentioned, qualified to do business in California. Google provides Internet search engine services to Internet users and advertising services to individuals, 9 10 11 businesses and educational and governmental entities involved in Internet sales and marketing throughout the United States. Purchasers of such advertising services presumptively include citizens of every state in the United States. 12 13 4. The true names and capacities, whether individual, corporate, associate, or otherwise, of Defendants named herein as DOES 1 through 100, and each of them, 14 15 are unkown to Plaintiff, who therefore sues said Defendants by such fictious names. 5. Plaintiff wil ask leave to amend this Complaint to state said 16 17 18 Defendants' true identities and capacities when the same have been ascertained. 6. Each of the Defendants designated herein as DOE took part in and participated with Google in all matters referred to herein and was in some manner 19 responsible for the injuries and losses suffered by Plaintiff. 7. At all times herein mentioned, each of the Defendants was the agent, servant, and/or employee or occupied other relationships with each of 20 21 the other 22 23 named Defendants and at all times herein mentioned acted within the course and scope of said agency and/or employment and/or other relationship and each other 24 25 Defendant has ratified, consented to, and approved of the acts of his agents, employees, and representatives, and each actively participated in, aided and abetted, 26 27 28 or assisted one another in the commission of the wrongdoings alleged in this Complaint. 3 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 5 of 19 Case 5:05-cv-02579-PVT Document 1 e Filed 06/24/2005 Page 4 of 18 e JURISDICTION AND VENUE 2 8. This Court has original jurisdiction over this action pursuant to 28 3 U.S.C. 1332(d)(2) in that it is class action fied under rule 23 of the Federal Rules 4 of Civil Procedure, the matter in controversy, as aggregated pursuant to 28 U.S.c. interest and costs, and a 5 1332(d)(6) exceeds the sum of$5,OOO,0000 exclusive of 6 substantial number of members of the class of plaintiffs are citizens of a state 7 different from Google. 8 9. Venue is proper in the Northern District of California pursuant to 28 9 U.S.C. 1391(a) in that (1) Google resides in this judicial district, (2) a substantial 10 part of the events or omissions giving rise to the claims asserted herein occurred in 11 this judicial district and (3) Google is subject to personal jurisdiction in the Northern California. In addition, the agreement between Google and all members 12 District of 13 of 14 County, California," which is within the Northern District of the class provides that, "(t)his Agreement must be ., . adjudicated in Santa Clara California. brings this action as a class action pursuant to 15 CLASS ACTION ALLEGATIONS 16 10. Alleged Class: Plaintiff 17 Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of all persons and/or the 18 entities that paid money to Google for advertising through Google's "AdWords" 19 program. Excluded from the Class are Defendants, officers and directors of 20 Company, members of the immediate families and each of their legal representatives, 21 heirs, successors or assigns and any entity in which Google has or has had a 22 controllng interest. 23 11. This action is properly maintainable as a class action because: 24 (a) the members of the Class for whose benefit this action is brought are 25 dispersed throughout the United States and are so numerous that joinder of all 26 Class members is impracticable. While the exact number of Class members is 27 unknown to Plaintiff at this time and can only be ascertained through appropriate 28 discovery, Plaintiff believes that Class members number in the thousands. 4 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 6 of 19 Case 5:05-CV-0257.VT Document 1 Filed 06/24.5 Page 5 of 18 Members of the Class may be identified from records maintained by Google and 2 may be notified of the pendency ofthis action by mail, using a form of notice 3 similar to that customarily used in class actions; 4 (b) Plaintiffs claims are typical ofthose of the Class as all members of 5 the Class are similarly affected by Google's actionable conduct as alleged herein; 6 (c) Plaintiff wil fairly and adequately protect the interests of the Class 7 and has retained counsel competent and experienced in class action litigation 8 including class actions within the Northern District of California. Plaintiff has no 9 interests antagonistic to, or in conflict with, the Class that Plaintiff seeks to 10 represent; 11 (d) A class action is superior to other available methods for the fair and 12 efficient adjudication of the claims asserted herein, because joinder of all 13 members is impracticable. Furthermore, because the damages suffered by 14 individual members ofthe Class may be relatively small, the expense and burden 15 of individual litigation make it virtually impossible for Class members to redress 16 the wrongs done to them. The likelihood of individual Class members 17 prosecuting separate claims is remote; 18 ( e) Plaintiff anticipates no difficulties in the management of this action 19 as a class action; and 20 (f) The questions of law and fact common to the members of the Class 21 predominate over any questions affecting individual members ofthe Class. 22 Among the questions of law and fact common to the Class are: 23 1. the pervasiveness of advertising "click fraud;" 24 11. the construction of the agreement between Google and the 25 Class; 27 28 26 11. Google's acts and/or omissions as alleged herein; 5 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 7 of 19 Case S:OS-CV-02SWVT Document 1 Filed 06/2410S Page 6 of 18 iv. whether Google's promotional and advertising materials for its 2 "AdWords" program misrepresented and/or omitted material 3 facts with respect to the pervasiveness of "click fraud;" 4 v. whether Google has breached its agreement with the class; 6 fraud;" 10 viii.to what extent the members of 5 Vi. whether Google has taken adequate measures to prevent "click 7 vii. whether Google has properly accounted and for and refunded 9 "click fraud;" and 8 fees it has wrongfully collected from identified victims of the Class have sustained I I damages and the proper measure of damages. 12 SUBSTANTIVE ALLEGATIONS COMMON TO ALL COUNTS 13 1. Goo~de "AdWords" and "AdSense" Pro2:rams 14 12. Plaintiff alleges the following on information and belief: 15 13. Google's free Internet search engine is the most widely-used Internet 1 6 search~engine in the world. It answers hundreds of milions of user searches and 17 covers billons of web pages each day. 18 14. Google also sells a number of products and services to individuals and the programs Google offers 19 business, educational and governental entities. One of 20 to its business customers is a keyword-triggered advertising program entitled 21 "AdWords." Google has offered this program since October 2000. 22 15. Google's AdWords program permits Google's advertising customers to 23 purchase advertising links associated with certain keywords. Google posts the links 24 on the margins of its search engine results pages based on whichever keywords 25 appear in user queries posted to Google's Internet search engine. Google's 26 advertising customers pay Google based on the number of Internet users who click 27 on these advertising links. 28 6 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 8 of 19 Case S:OS-CV-02SWVT Document 1 Filed 06/2410S Page 7 of 18 16. Google' s advertisers select the keywords that wil trigger their 2 advertisements. Thus, for example, a computer hardware retailer might select 3 keywords such as "computer," "hard drive," "memory," and the like. Then, whenever 4 a user entered a search string containing any of those keywords, that retailer's paid 5 advertisement would appear alongside the search results. 6 17. Advertisers make bids for the key words that wil trigger their 7 advertisements. The highest bidder for a word or phrase generally finds its ad on top 8 of the list. Advertisers then pay Google a fee every time someone clicks on their ad. 9 Payments average approximately 50 cents per click, but can reach over $ i 00 for 10 sought-after terms valuable to advertisers. 11 18. Google also places the AdWords text ads on other Web sites though its 12 "AdSense" program. Under this program, relevant ads are selected based on the 13 paricular website's content. Again, Advertisers pay Google a fee every time 14 someone clicks on their ad as displayed thorough the AdSense program. A portion 15 of the fee the advertisers pay to Google is then remitted back to the site which 16 displays the ad. 17 19. Other internet search companies besides Google offer variants on 18 Google's AdWords program. These programs are substantially identical to Google's 19 in that advertisers pay fees to the internet search company each time their ads are 20 clicked. These programs are referred to generically as "pay-per-click". 21 20. According to Google's 2005 Anual Report, advertising revenue (which 23 2. "Click Fraud" 22 means revenue from AdWords) represents 99% of 27 nor under the pleading requirements of Google's total revenue in 2004. 24 21. "Click Fraud" is the term the industry uses to describe when someone 25 clicks on a search advertisement with an il intent and with no intention of doing 26 business with the advertiser. It is not "fraud" as such is understood at common law the federal rules; rather, it merely describes 28 purposeful clicks on advertisements for some kind of improper purpose. Perpetrators 7 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 9 of 19 Case S:OS-CV-02SWVT Document 1 Filed 06/2410S Page 8 of 18 of click fraud exploit the nature of pay-per-click advertising in order to increase the 2 pay-per-click fees paid by rivals, boost the placement oftheir own advertisements, or 3 to directly profit from the activity. Many of these fraudulent clickers have used times: 4 software programs that automatically click on ads hundreds or thousands of 5 (a) Business rivals llse click fraud to drive up the advertising costs of 6 their competitors, often to the point that they use up a competitor's budget and 7 cause the competitor's pay-per-click advertisement to be removed from further 8 search results, which may also boost the prominence of the fraudulent clicker's 9 own advertisement. 10 (b) Another form of click fraud is engaged in by companies who accept i 1 pay-per-click advertising on their websites under programs such as Google's 12 AdSense program. These sponsoring companies engage in click fraud to increase 13 their own commissions, which in turn also increases the amount that advertisers 14 pay for the advertisements. 15 22. Click fraud can be prevented by tracking the use of a pay-per-click i 6 advertisement, including who is clicking on the advertisement/link and how often the i 7 same individual clicks on it. Such tracking can be accomplished by computer 18 programs that count the number of clicks originating from a single source and 19 whether or not those clicks result in a sale. It is likely that the very computer 20 programs that Google uses to track clicks for purposes of charging their advertisers 21 fees could also be used to screen for fraudulent clicks. 22 23. Tracking fraudulent clicks at the source-that is, the website on which 23 the advertisement clicked on appears--is even more effective since websites that host 24 advertisements provide tracking data to Google with every click. 25 24. Google appears to be at least partially able to ascertain which "clicks" 26 constitute "click-fraud," insofar as it has provided a small number of rebates to 27 advertisers who have complained of being victims of click fraud. 28 8 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 10 of 19 Case S:OS-CV-02SWVT Document 1 Filed 06/2410S Page 9 of 18 25. Google is in a unique position to track click fraud that originates though 2 3 its own AdSense program since these sites are affiiates of Google and the entire process takes place within the closed-end Google universe of internet links. 4 5 3. The Pervasiveness of Click Fraud 26. Click fraud is a rampant problem inthe pay-per-click advertising 6 business. Some analysts believe that as many as 20% of clicks are fraudulent. 27. In December 2004, Google's chief 7 8 financial officer, George Reyes, characterized click fraud as, "the biggest threat to the Internet economy." 28. However, in a meeting with analysts in February Google co-founder, 9 10 1i Sergey Brin downplayed Reyes's comments. 4. Goog:le's Failure to Disclose the Pervasiveness of Click Fraud 29. Google disclosed the following in its 2005 Anual Report: 12 13 14 15 If we fail to detect click-through fraud, we could lose the confidence of our advertisers, thereby causing our business to suffer. fraudulent clicks on our ads by persons seeking to increase the advertising fees paid to We are exposed to the risk of 16 i7 our Google Network members. We have regularly refuded 18 19 20 21 22 23 24 25 revenue that our advertisers have paid to us and that was later attributed to click-through fraud, and we expect to do so in the future. Click-through fraud occurs when a person clicks on a Google AdW ords ad displayed on a web site in order to generate the revenue share payment to the Google Network member rather than to view the underlying content. Ifwe are unable to stop this fraudulent activity, past fraudulent clicks we may have to issue refunds retroactively of amounts previously paid to our Google Network members. This would negatively affect our these refunds may increase. Ifwe find new evidence of profitability, and these types of 26 27 28 fraudulent activities could hurt our brand. If fraudulent clicks are not detected, the affected advertisers may experience a reduced return on their investment in our advertising programs because the 9 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 11 of 19 Case 5:05-CV-0257IVT Document 1 Filed 06/24.5 Page 10 of 18 1 2 3 fraudulent clicks wil not lead to potential revenue for the advertisers. This could lead the advertisers to become dissatisfied with our advertising programs, which could lead to loss of advertisers and revenue. 30. In this context, and given the fact that 99% of its revenue is derived 4 5 from AdW ords there is little doubt why Google will not disclose its own estimate of 6 7 8 the number of fraudulent clicks its advertisers pay for. 31. Nevertheless, Google knows, and at all relevant times hereto has known, that click fraud is rampant in its AdW ords program and that the advertisements it 9 10 11 sold and sells to Plaintiff and the class are worth significantly less than the amount which plaintiff and the Class have bid for key words and have consequently paid to Google for clicks. 12 13 32. Google has failed to take any significant measures to track or prevent click fraud, and fails to adequately warn its existing and potential customers about the existence of click fraud. ; 33. When customers become the victims of click fraud, Google fails to (a) 14 15 16 17 18 adequately advise them that they have been victimized, and (b) refund them the excess charges that they have incurred as a result of the fraudulent click activity. interest in preventing click fraud 34. Google has an inherent conflict of 19 since it derives the same amount of income from each fraudulent click as it does from each legitimate click. 5. Gooele's Aereement with the Class 20 21 22 23 35. All AdWords advertisers enter into the "Google Inc. AdWords Program Terms" (the "AdWords Program Terms"). The AdWords Program Terms are revised from time-to-time, but remain identical in substance. All AdW ords advertisers are 24 25 required to accept thse new Terms and Conditions in order to advertise with the AdWords program. A copy of 26 27 28 the "AdWords Program Terms," is annexed hereto as Exhibit "A" and made a part hereof. 10 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 12 of 19 Case 5:05-CV-0257.VT Document 1 Filed 06/24/.5 Page 11 of 18 1 36. Pursuant to the "AdWords Program Terms," advertisers "shall be 2 charged based on actual clicks...." A fraudulent click is not, however, an "actual 3 click," not only within the meaning of "AdWords Program Terms" but pursuant to 4 industry practices and Google's own practices as demonstrated by the limited 5 refunds Google has made to advertisers who have complained of being victims of 6 click fraud. 7 37. Every member of the Class is a party to the AdWords Program Terms. 8 38. The AdWords Program Terms provide that the agreement is to be 9 "governed by California law." Therefore, a single body of substantive state law 10 applies to this action such that a nationwide class may be certified. 11 FACTUAL BACKGROUND 12 39. On or around January 21,2005, Click Defense entered into a written 13 form contract with Google for the placement of a pay-per-click advertisement to be 14 displayed as a sponsored link. Click Defense successfully bid $3 for the display of 15 Click Defense's advertisement and a link to Click Defense's website whenever a user 16 of Google's search engine searched for the key words "click fraud." Other than the Click Defense's bid, Click Defense was not permitted to negotiate the 17 amount of 18 specific terms of the contract - the terms were offered by Google on a take it or leave 19 it basis. 20 40. Between January 21,2005 and the present, Click Defense became the 21 victim of click fraud. 22 FIRST CAUSE OF ACTION 23 (BREACH OF CONTRACT) 24 41. Plaintiff repeats and realleges each of the preceding paragraphs, as if set 25 fort fully herein. 26 42. Pursuant to the "AdWords Program Terms," advertisers "shall be 27 charged based on actual clicks.. .." A fraudulent click is not an "actual click," not 28 only within the meaning of "Ad Words Program Terms" but pursuant to industry 11 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 13 of 19 Case 5:05-CV-0257.VT Document 1 Filed 06/24/15 Page 12 of 18 practices and Google's own practices as demonstrated by the limited refunds Google has made to advertisers who have complained of being victims of click fraud. 43. Further, the AdWords Program Terms contains and contained an implied covenant of good faith and fair dealing that Google would not do anything that would have the effect of injuring the right of plaintiff and the Class to receive the benefits of the contract. 44. Google breached its contracts with Plaintiff and the Class, and the covenant of good faith and fair dealing, by collecting fees from plaintiff and the Class for click fraud even though Google knew, or should have reasonably known, that the clicks were not "actual clicks" but rather puroseful clicks made for an improper purpose. 45. As a direct and proximate result of Google's breach of the covenant of good faith and fair dealing, plaintiff and the Class have been damaged in an amount to be determined at trial but in excess of an aggregated amount of $5,000,000. SECOND CAUSE OF ACTION 46. Plaintiff repeats and reaiiegeS each of (NEGLIGENCE) the preceding paragraphs, as if set fort fully herein. 47. Google owes and owed a duty to plaintiff and the Class to monitor its AdWords program for click fraud and to protect plaintiff and the Class from click fraud to ensure that Plaintiff and the Class were charged only for "actual clicks." 48. Google has breached its duty to plaintiff and the Class by failing to adequately monitor its AdW ords program for click fraud and to protect plaintiff and the Class from click fraud, and by charging plaintiff and the Class for purposeful clicks on search advertisements made for an improper purpose. 49. As a proximate result of Google's breach of their duties owed to plaintiff and the Class, plaintiff and the Class have b~en damaged in an amount to be determined at trial but in excess of an aggregated amount of $5,000,000. 12 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 14 of 19 Case 5:05-CV-0257.VT Document 1 Filed 06/24/.5 Page 13 of 18 1 THIRD CAUSE OF ACTION 2 (UNJUST ENRICHMENT) 3 50. Plaintiff repeats and realleges each of the preceding paragraphs, as if set 4 forth fully herein. 5 51. Google has received and retains money belonging to plaintiff and the 6 Class resulting from clicks made for an improper purpose, i.e., fraudulent clicks. 7 52. Under principles of equity and good conscience, Google should not be 8 permitted to retain the money belonging to plaintiff and the Class which Google has 9 unjustly received as a result of its actions. 10 FOURTH CAUSE OF ACTION 11 (UNFAIR BUSINESS PRACTICES) 12 (BUSINESS & PROFESSIONS CODE 17200, ET SEQ.) 13 53. Plaintiff repeats and realleges each of the preceding paragraphs, as if set 14 forth fully herein. . 15 54. As described above, the Agreement between Google and plaintiff and 16 the Class provides that the Agreement shall be governed by California law. 17 California Business & Professions Code 17200 provides that "unfair competition 18 shall mean and include any unlawful, unfair or fraudulent business act or practice." 19 55. Google's conduct in charging Plaintiff and the class for fraudulent 20 clicks, as alleged hereinabove, violated California Business & Professions Code, 21 section 17200, et seq. because it was an unlawful, unfair and/or fraudulent business 22 act and practice. 23 56. As a proximate result of Go ogle's conduct alleged herein, both Plaintiff 24 and the class have sustained pecuniary loss. 25 57. Unless restrained by this Court, Defendant Goggle wil continue to 26 engage in the unlawful, unfair, and/or fraudulent business acts or practices alleged 27 above, in violation of Section 17200 of the Business and Professions Code, thus 28 tending to render jndgment in the instant action ineffectuaL. Plaintiff has no 13 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 15 of 19 Case 5:05-CV-0257IVT Document 1 Filed 06/24/.5 Page 14 of 18 , 1 adequate remedy at law, in that Defendant wil continue to engage in such practices, as alleged above, in violation of Section 17200 of 2 3 the Business and Professions Code, thus engendering a multiplicity of judicial proceedings. 58. Plaintiff and the Class are entitled to the disgorgement of any profits 4 5 Google obtained as a result of charging plaintiff and the Class for fraudulent clicks, 6 restitution of any monies plaintiff and the Class paid for clicks that could be 7 8 determined to be fraudulent, and attorneys' fees as provided by California Code of Civil Procedure, section 1021.5. 9 10 11 PRAYER FOR RELIEF WHREFORE, plaintiff Click Defense, individually and on behalf of all those similarly situated, prays for judgment against Google as follows: 12 13 1. Allowing this action to be brought as a class action; 11. Awarding Plaintiff and the Class damages for Google's breach of 14 15 contract in an amount to be determined at trial but not less than an aggregate amount in excess of $5,000,000; 16 17 18 111. Awarding Plaintiff and the Class damages for Google's negligence in an amount to be determined at trial but not less than an aggregate amount in excess of $5,000,000; iv. Requiring Google to return Plaintiffs and the Class's money in 19 20 21 the amount in which Google has been unjustly enriched; V11. Awarding Plaintiff and the Class injunctive relief and restitution for Google's violation of 22 23 the Business & Professions Code section 17200; viii. Awarding Plaintiff and the Class pre- and post-judgment interest as allowed by law; 24 25 ix. Awarding counsel for Plaintiff and the Class reasonable attorneys' fees and costs; 26 27 28 x. Awarding Plaintiff and the Class declaratory and injunctive relief requiring Gl)ogle to disclose the true extent of click fraud and to credit all members 14 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Filed 03/09/2006 Page 16 of 19 Case 5:05-CV-0257IVT Document 1 Filed 06/24105 Page 15 of 18 1 of the class for any clicks that were the result of click fraud; and 2 Xl. Granting such other and further relief that this Court may deem 3 just and proper. 4 5 6 7 8 Dated. June~, 2005 . n'? 9 10 11 By: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 K:\Cases\Pay Per Click\GOOGLE\PLEADlNGS\Google Complaint (FlNAL).doc 28 15 Class Action Complaint Case 5:05-cv-02885-RMW Document 21-3 Document 1 Filed 03/09/2006 Page 17 of 19 Case 5:05-CV-02579.lT Filed 06/24/.5 Page 16 of 18 Google Inc. AdWords Program Terms These Google Inc. AdWords Program Terms ("Terms") are entered into by you and Google Inc. C'Google") regarding the Google AdWords Program ("Program") as further described in the Program's frequently asked questions at httPs://adwords.Qoogle.com/supportbin/indx.py?fulldump=1 . (the "FAQs") (collectively, the "Agreement"). "You" or "you" means the party listed on the account you create and you represent you have the authority to agree to this Agreement for that party. You represent and warrant that you are authorized to act on behalfof, and bind to this Agreement, any third party for which you generate ads. You hereby agree and acknowledge: . . 1 Policies. Program use.is subject to all applicable Google and Partner policies, including without limitation the Editorial Guidelines (adwords.qooQle,com/select/Quidelines.html), Google Privacy Policy (WWW.Qoogle.com/privacy.html) and Trademark Guidelines (ww.QooQle.com/permissions/trademarks.html). Policies may be modified any time. You shall direct only to Google communications regarding your ads on Partner Properties. Some Program features are identified as "Beta," "Ad Experiment," or otherwise unsupported ("Beta Features"). Beta Features are provided "as is" and at your option and risk. You shall not or access to disclose to any third party any information from, existence of Beta Features. Google may modify ads to comply with any Google Property or Partner Property policies. 2 The Program. You are solely responsible for all: (a) keywords and ad targeting options (collectively "Targets") and all ad content and ad URLs ("Creative"), whether generated by or for you; and (b) web sites proximately reachable from Creative URLs and your services and products (collectively "Services"). You shall protect your passwords and take full responsibility for your own, and third party, use of your accounts. Ads may be placed on (y) any content or property provided by Google ("Google Property"), and unless opted-out by you (z) any other content or property a third party ("Partner") upon which Google places ads provided by Target for any or no reason. You may independently cancel online any campaign at any time (such cancellation is generally effective within 24 cancel immediately any 10, the Program or these hours): Google may ("Partner Property"). Google or Partners may reject or remove any ad or Terms at any time with notice (additional notice is not required to cancel a reactivated account). Google may modify the Program or these Terms at any time without liabilty and your use of the Program after notice that Terms have changed indicates acceptance of the Terms. Sections' 1 ,2,4, IIp EXHBIT A Case 5:05-cv-02885-RMW Document 21-3 Document 1 Filed 03/09/2006 Page 18 of 19 Case 5:05-CV-02579.T i Filed 06/24/21 Page 17 of 18 5. 6 and 7 wil survive any expiration or termination of this Agreement. 3 Prohibited Uses. You shall not, and shall not authorize any party to: . (a) generate automated, fraudulent or otherwise invalid impressions or clicks; or (b) advertise anything ilegal or engage in any ilegal or fraudulent business practice in any state or country where your ad is displayed. You and display your ads and Targets (JlUseJl);and (z) such Use and websites linked from your ads (including services or products therein) wil not violate or encourage violation of any applicable laws. Violation of these policies may result in immediate termination of this Agreement or your account without notice and may subject you to legal penalties and consequences. ,information is correct and current; (y) you hold and grant Google and Partners all rights to copy, distribute represent and warrant that (x) all your 4 Disclaimer and Limitation of Liabilty. GOOGLE DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION FOR NONINFRINGEMENT, MERCHANTABILITY AND . FITNESS FOR ANY PURPOSE. Google disclaims all guarantees regarding positioning or the levels ortiming of: (i) costs per click, (ii) click through rates, (ii) delivery of any impressions on any Partner Property or Google Property or sections of such properties, (iv) clicks or (v) conversions for any ads or Targets. EXCEPT FOR INDEMNIFICATION AMOUNTS PAYABLE TO THIRD PARTIES HEREUNDER AND YOUR BREACHES OF SECTION 1, TO THE FULLEST EXTENT PERMITTED BY LAW: (a) NEITHER PARTY WILL BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY. PUNITIVE, OR OTHER DAMAGES WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY; AND (b) EACH PARTY.S AGGREGATE LIABILITY TO THE OTHER IS LIMITED TO AMOUNTS PAID OR PAYABLE TO GOOGLE BY YOU FOR THE AD GIVING RISE TO THE CLAIM. Except for payment, neither party is liable for failure or delay resulting from a condition beyond the reasonable control of the party, including but not limited to acts of God, government, terrorism, natural disaster, labor conditions and power failures. 5 Payment. You shall be charged based on actual clicks or other billing / shall pay methods you may choose online (e.g. cost per impression). You' all charges in the currency selected by you via your online AdWords account, or in such other currency as is agreed to in writing by the parties. Charges are exclusive of taxes. You are responsible for paying (y) all taxes and government charges, and (z) reasonable expenses and attorney fees l7 EXHIBIT A Case 5:05-cv-02885-RMW Document 21-3 Document 1 Filed 03/09/2006 Page 19 of 19 Case 5:05-CV-02579tjT Filed 06/24/.5 Page 18 of 18 800gle incurs collecting late amounts. You waive all claims relating to charges unless claimed within 60 days after the charge (this does not affect your credit card issuer rights). Charges are solely based on Google's click measurements. Refunds (if any) are at the discretion of Google and only in the form of advertising credit for Google Properties. You acknowledge and agree that any credit card and related billing and payment information that you provide to Google may be shared by Google with companies who work on Google's behalf, such as payment processors and/or credit agencies, solely for the purposes of checking credit, effecting payment to Google and servicing your account. Google may also provide information in response to valid legal process, such as subpoenas, search warrants and court orders, or to establish or exercise its legal rights or defend against legal claims. Google shall not be liable for any use or disclosure of such information by such third parties. 6 Indemnification. You shall indemnify and defend Google, its agents, affiliates, and licensors from any third party claim or liabiliy (including without limitation reasonable legal fees) arising out of your Program use, Targets, Creative and Services and breach of the Agreement. 7 Miscellaneous. The Agreement must be construed as if both parties jointly wrote it, governed by California law except for its conflicts of laws principles and adjudicated in Santa Clara County, California. The Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. You may grant approvals, permissions and consents by email, but any modifications by you to the Agreement must be made in a writing (not including email) executed by both parties. Any notices to Google must b sent to: Google Inc., AdWords Program, 1600 Amphitheatre Parkway, Mountain View, CA 94043, USA, with a copy to Legal Department, via first class or air mail or overnight deemed given upon receipt. Notice to you may be effected courier, and are by sending email to the email address specified in your account, or by posting a message to your account interface, and is deemed received when sent (for email) or no more than 15 days after having been posted (for messages in your AdWords interface). A waiver of any default is not a waiver of any subsequent default. Unenforceable provisions wiIbe modified to reflect the parties' intention, and remaining provisions of the Agreement will remain in full effect. You may not assign any of your rights hereunder and any such attempt is void. Google and you and Google and Partners are not legal partners or agents, but are independent contractors. Apri/19, 2005 /8 EXHIBIT A

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