Adblade Responds to Lawsuit about its Competitor, Broadspring’s, Reported Links to Malware, Spyware and Deceptive Advertising

Competitor has sued Adblade for obscure post containing links to published news reports connecting Broadspring to Mindset Interactive and New Motion, Inc.

NEW YORK – Broadspring, publisher of HowLifeWorks and Content.Ad, issued a press release announcing their month-old lawsuit against Adblade and Adblade Executives for alleged defamation by an Adblade employee. The statements in question are related to an online post connecting Broadspring to Mindset Interactive and New Motion, Inc. dba Atrinsic.

“Vinay Jatwani – Founder, Head of Sales.”

Adblade and the other defendants in the suit have contended that the statements made by the Adblade employee are protected by the First Amendment and substantially based on publicly available information concerning Broadspring and individuals and entities with which it has been publicly connected in published news reports. Broadspring is engaging in a competitive gambit in an attempt to win AdBlade clients while distancing its own executives from reported connections to spyware, malware and deceptive advertising practices.

“We were shocked by Broadspring’s transparent attempt to hurt our company and executives through their press release. We feel that we have no choice but to respond with a more complete story,” said Ash Nashed, CEO of Congoo, Adblade’s owner. “By suing us for an obscure online post containing reviews of more than 10 other ad networks, Broadspring is seeking to injure Congoo while effectively encouraging people to read the very comments they object to. As the leader in Content-style marketing, we expect competition; however, we believe that the players in the marketplace should be held to certain ethical standards of business practice.”

As Congoo has asserted in pleadings filed in the lawsuit, the statements in the online post, which Broadspring primarily objects to, are all based on information that has been available on the internet, some of which was even posted by Broadspring itself. For example:

  • According to Broadspring.com, Broadspring acquired Mindset Interactive, and Mindset Co Founder Vinay Jatwani, whose bio was recently removed from Broadspring.com, became CEO of Broadspring and remained CEO until 2012. An archived version of the Team page from the Broadspring website from 2012 lists Jatwani as “Vinay Jatwani – Founder, Head of Sales.” The archived page states that “Mr. Jatwani was previously the COO and co-founder of Mindset Interactive Inc.”
  • Also, the Federal Trade Commission website includes a copy of a judgment obtained by the FTC in an action commenced in Federal Court in which Mindset is parenthetically identified as Broadspring.
  • Congoo has also sought to rebut Broadspring’s claim that Mindset was not a “notorious spyware company” by referring the Court to numerous sources that have described Mindset’s involvement with spyware. The Wall Street Journal reported, “Ask Jeeves also has abandoned …Mindset Interactive, a maker of spyware that installs other spyware…”
  • ZDNet reported that “[a]ccording to information around the Web” Mindset Interactive’s FavoriteMan “periodically connects to its home servers, piggybacking on Internet Explorer so firewalls won’t catch it, and downloads other spyware applications such as nCase, Bargain Buddy, and HotBar. FavoriteMan comes from Mindset Interactive.”
  • Software security firm and Microsoft partner, ParetoLogic, points to another program it identifies as having been authored by Mindset that is problematic: “VX2.Clean Get-Away application also records pieces of data entered on Web forms. This feature of the program allows the application to capture personal data such as email addresses and credit card numbers…. Its author is MindSet Interactive, developers of a number of Spyware, Adware and Malware programs.”

Congoo has also presented the Court with information concerning the relationship between Broadspring and New Motion, Inc.

  • According to public filings, the stockholders of Broadspring formed New Motion and transferred a business to New Motion.
  • Additionally, according to this SEC filing made by New Motion on July 20, 2007, Mindset’s CEO Scott Walker, “was with BroadSpring Inc., which he helped form. From 1997 to 2004, Mr. Walker headed up Mindset Interactive, Inc.…”
  • New Motion settled a class action lawsuit involving “alleged unauthorized subscriptions and deceptive advertising” as described on the settlement’s website.
  • New Motion also settled in 2009 with the Florida Attorney General and their CyberFraud unit, as reported in MobileMarketer.com, “over allegations relating to improper billing of mobile content.” According to the article, “Per the attorney general, the advertising for these products was problematic in that the ads often failed to clearly and conspicuously describe the price and terms of the purchase. Consequently, consumers were unwittingly being signed up for costly monthly subscriptions, Florida’s top cop claimed.”

Congoo, LLC, owner of Adblade, intends to defend itself vigorously and has filed counterclaims against Broadspring.

About Adblade

Adblade, the only premium content-style ad platform online, works with more than 1,000 premium distribution partners on behalf of more than 15,000 advertisers. Adblade reaches more than 200 million users a month according to comScore, and is rated by Integral Ad Science as one of the most brand safe ad networks in the US. For more information visit www.adblade.com.