Wire Drops Lawsuit Alleging Extortion from Signal Co-Founder
May 13, 2016
Shah Sheikh (1294 articles)

Wire Drops Lawsuit Alleging Extortion from Signal Co-Founder

The company that makes the Wire encrypted messaging app dropped a lawsuit they filed against Open Whisper Systems, makers of the Signal app, in which Wire accused one of Signal’s co-founders of extortion.

According to court documents filed in April, Wire accused an Open Whisper Systems exec, saying the creators of the Signal app tried to make them pay a license fee and also threatened to release details to the public about a vulnerability in the Wire encryption system.

After a month, the company has now filed a voluntary notice of dismissal, abandoning all legal procedures and extortion accusations, in what seemed to be a classic SLAPP lawsuit.

Wire wanted a judge to rule that it didn’t infringe on Signal’s IP

Let’s start with the beginning, and that’s with the Wire accusations. The lawsuit was filed last month by Wire Swiss GmbH, the company behind the Wire encrypted messaging app. Court documents revealed that Wire Swiss was seeking a jury trial for judgment that it didn’t infringe on any of Quiet Riddle Ventures LLC (doing business as Open Whisper Systems) proprietary software code while accusing one of the company’s execs of extortion.

Wire Swiss claimed that Moxie Marlinspike (monicker), co-founder of Open Whisper Systems, had contacted the Wire team and accused it of using some of Signal’s proprietary code in the Wire app’s encryption system.

Wire representatives said that when they inquired about “which part,” Marlinspike declined to provide details and only said it related to Open Whisper Systems (OWS) software.

The Wire app is built on open source code, freely available on GitHub under the GPLv3 license, but also with some code taken from the Signal project.

Wire also made allegations of extortion

In the court documents it filed, Wire Swiss accused Marlinspike of attempting to blackmail the Wire team with the threat of “publicly exposing” their copyright infringement unless Wire Swiss agrees to pay a license fee in excess of $2 million (€1.76 million).

All of these communications took place supposedly via email and phone calls between Marlinspike and Wire Swiss CTO Alan Duric in the month of March, per lawsuit documents.

Wire Swiss also claims that Marlinspike has recorded these conversations without Duric’s consent, and attempted to use them as leverage in the extortion attempt, threatening to release them in case Wise Swiss did not agree to pay the license fee.

On top of these accusations, Wire Swiss also said that in order to be more convincing, Marlinspike revealed to the Wire team that he and his team had conducted a security analysis of the Wire app and have found a vulnerability, which they didn’t report to Wire Swiss, and threatened to make public.

Somehow, Facebook was at the middle of things

A month later, Facebook announced the integration of the Open Whisper Systems encryption technology into WhatsApp. Wire Swiss concluded that Open Whisper Systems only wanted to “squash” “a plain competitive threat to the Signal Protocol,” and filed their lawsuit a day after Facebook’s announcement, on April 6.

Last week, on May 5, events took a 180-degree turn and Wire Swiss filed a voluntary notice of dismissal with prejudice. This means the company dropped the lawsuit on its own decision and will not be allowed to bring up this issue in court again.

Open Whisper Systems cleared of all allegations

Softpedia reached out to Open Whisper Systems. Mr. Marlinspike denied any allegations of extortion, claiming that his company only contacted Wire Swiss because they discovered the company was employing parts of their open-sourced code without compliance with the open source license requirements, that also mandated proper attribution.

“  A company called Wire Swiss recently released an update to their app that uses some of our cryptographic protocols. Even though their user base is very small, we were excited, since we like to see our work used in the world.  We were subsequently disappointed to discover that Wire had used some of the code from our open source libraries without preserving our copyright notices. We initially thought this was an oversight, but after contacting them and walking them through the situation on the phone, eventually learned that (contrary to their marketing material) the app itself is not actually open source, so they removed our copyright notices in an effort to avoid the perception that they were in violation of the GPL.  ”

Regarding the $2 million extortion allegations, Mr. Marlinspike provided the following statement:

“  We asked that they either license their software appropriately or re-write it so that it didn’t use our software. We even offered them a dual license at no cost that would allow them to continue distributing a derivate work of our GPL code in binary-only form so long as they complied with the GPL for their source distributions of the modifications they made to our library. […] At no point during this exchange have we asked Wire for any money.  ”

Open Whisper didn’t want to settle and held its ground, preparing to fight in court. As mentioned above, Wire Swiss eventually dropped the lawsuit. Following the lawsuit’s dismissal on behalf of Wire’s part, at the time of writing, Wire is providing copyright attribution to Open Whisper in its code.

“  We were able to convince Wire Swiss of the strength of our position, however, and reached an agreement where they added the attribution to the license section of their source code as we had originally requested, and dismissed their own claims with prejudice.  ”

A lot of these short-burst lawsuits happen in Silicon Valley, where companies try to intimidate each other or bury one another in legal fees. This one caught our attention because of the “alleged” extortion attempt that a company exec “allegedly” tried right before his technology was integrated into the product of one of the world’s biggest companies.

The original lawsuit is now history, and Wire has never provided any proof regarding the extortion allegations.

Softpedia has reached out to Wire Swiss, but the company did not respond to our inquiries. Below is a copy of the original court documents, courtesy of PlainSite. A copy of the Notice of Dismissal is behind a paywall at PacerMonitor.

Source | SoftPedia