In re Pharmatrak, Inc.

Pharmatrak, Inc. (defendant) sold a service to pharmaceutical companies called NETcompare intended to collect information about internet usage and web traffic on their websites. When a user first visited a website that used Pharmatrak, the website’s code instructed the user’s computer to retrieve an invisible, clear GIF called a web bug. Pharmatrak’s server responded by placing a cookie on the user’s computer that tracked use of the website. The companies asked for and received assurances from Pharmatrak that NETcompare could not and would not collect users’ personally identifiable information. Some explicitly conditioned buying NETcompare on it not collecting such information. But due to software errors in an email program and a web browser, combined with an interaction between NETcompare and one client’s computer code, NETcompare stored users’ personal information. A group of users whose personal data was collected brought a class action asserting Pharmatrak intercepted electronic communications without consent in violation of the Electronic Communications Privacy Act of 1986 (ECPA). The district court granted summary judgment for Pharmatrak under an exception that applies if a party consented to the interception of data. The court reasoned that by contracting with Pharmatrak, the pharmaceutical companies arguably consented to it tracking user information. The claimants appealed.