Bose dodges Wiretap Act claims, but case still moves forward

Inspiration

Bose Corporation is a true American success story. Bose was founded in 1964 by Amar Gopal Bose, the American son of a refugee Bengali freedom fighter, who was educated at the Massachusetts Institute of Technology and began his career there as an assistant professor. A tinkerer in the best sense of the word, Bose began putting together audio technology products in the 1950s.

Today Bose is a household name and the company’s products are celebrated for their high quality. Bose (the company) is also distinguished by the fact that Bose (the man), who held a professorship at MIT for decades, donated the majority of his company’s nonvoting shares to his employer. The dividends are used by MIT to advance the mission of the school.

Zak attack!

Bose’s reputation for technical excellence took on some tarnish in 2017 when it was sued by Illinois consumer Kyle Zak. Zak’s complaint – filed in the Northern District of Illinois – asserted that an app promoted along with Bose speakers and headphones was listening in on the products’ Bluetooth connections. The alleged eavesdropping would deliver user information – including song selections – to a third-party data miner that, in turn, would hand the data back to Bose so that it could build detailed user profiles around their preferences.

Zak couldn’t deal, so he went ahead and filed suit.

But he brought an interesting set of charges against the company: violations of the federal Wiretap Act, the Illinois Eavesdropping Statute and Intrusion Upon Seclusion, a tort claim (alongside more mundane charges under Illinois’ Consumer Fraud and Deceptive Business Practices Act, a common-law unjust enrichment claim).

The takeaway

Bose moved to dismiss an amended complaint in August 2017, but only prevailed in part.

The court dismissed Zak’s novel wiretap and eavesdropping claims, writing that the complaint failed to adequately allege that Bose is not a party to communication, as is necessary for violations of these statutes. “ … [T]he relevant inquiry,” the court wrote, “is whether the defendant is a participant in the conversation, as opposed to a nonparticipant that uses other means to gain access to – i.e., intercept – the communication.” Bose wasn’t an intruding third party, so this line of attack was shut down.

Nonetheless, the unjust enrichment and Illinois state consumer fraud charges survived. And, to make things a little more interesting for the defendant, the court left the door open for Zak to file again under the Wiretap Act if he could prove “that Bose is in fact not a party to the communication or that Bose, while a party, nevertheless intercepted a communication with the purpose of committing a crime or tort independent from the alleged interception.”

Alleging eavesdropping is a novel approach to a consumer app-related privacy suit, but in a win for industry, the court determined that there’s a radically different set of questions raised by wiretapping allegations than one finds in a run-of-the-mill data privacy case.