• by Wendy Davis  @wendyndavis, February 12, 2018

The technology company Lisnr has gone on the offensive in a privacy battle stemming from claims that it helped to eavesdrop on Colts fans.

Lisnr, which was sued in late 2016 over privacy allegations, is now claiming that it was defamed by the plaintiffs in the lawsuit and Edelson PC -- the law firm that brought the case.

The lawsuit against the Cincinnati-based data-over-audio company centers on allegations that the Indianapolis Colts' app -- which allegedly used Lisnr's technology -- surreptitiously listens to users. Last October, U.S. District Court Judge Tanya Walton Pratt in the Southern District of Indiana, refused to dismiss the allegations against Lisnr, the Colts and the technology company Adept Mobile, also named as defendants.

That class-action complaint alleges that the NFL team worked with Lisnr and Adept Mobile to integrate beacon techology into the Colt's app, in order to send users ads and content based on their locations. The app allegedly activates phones' microphones in order to listen to Lisnr's beacons, and following this, the app may display ads to consumers. The app also allegedly "listens to and records all audio within range -- including consumer conversations."

In a counterclaim made available this month, Lisnr says it's the victim of "malicious prosecution." The company contends it was defamed by the Edelson law firm -- which is well-known for bringing privacy lawsuits. Lisnr also says it lost the Colts' business as a result of the lawsuit.

Lisnr alleges that the original lawsuit was "baseless" and that Edelson "persisted in prolonging and extending the present proceedings."

The company disputes allegations that it violates the federal wiretap law, which prohibits companies from intercepting electronic communications without consent. Lisnr says in its counterclaim that Edelson and the plaintiff "failed to disclose that they knew the app only used (and then discarded) no more than .04 seconds of audio data, failed to disclose that they had not found evidence that the data was ever decoded or evidence of any voice analysis or transmission, and failed to disclose that they knew the App did not hear or listen to human speech."

Lisnr CEO Rodney Williams tells MediaPost his company's data-over-audio technology, which transmits at high frequencies, doesn't interpret human voices. "It just doesn't work like that," he says, adding that the technology doesn't carry privacy implications.

Edelson says in papers filed Friday that a disagreement between itself and Lisnr about the merits of the case "does not render the litigation 'baseless.'"

The firm also argues that even if Lisnr discards audio data, the company still may have violated a privacy law.

"Lisnr seems upset that Edelson has not disclosed, either in its communications with potential clients or in the pleadings it has filed the fact that the App filters collected audio for certain sounds and discards all other data," the law firm writes. "But whether that fact is material is one of the very things in dispute."

The law firm also argues that longstanding legal principles protect it from liability for defamation for statements made in connection with litigation. While there's an exception for "sham" lawsuits, Edelson says this case doesn't fit into that exception.

"Edelson attorneys presented to the court the facts they believed were material to the Wiretap Act claims at issue, presented them in the best light, consistent with their obligation to zealously advocate on behalf of their clients, and explained to the court why they did not believe the claims were foreclosed by existing law," the law firm writes. "This is all perfectly normal behavior."

Lisnr also alleges that the app used by the original plaintiff in the lawsuit, Alan Rackenmann, didn't include Lisnr's technology. But last November, the law firm sought to substitute a different app user, Jeff Evans, as the lead plaintiff. "Evans intends to continue litigating the underlying theory," the law firm says.

The Golden State Warriors, along with Signal 360 and Yinzcam, face a similar privacy lawsuit in California. That matter is pending in front of U.S. District Court Judge Jeffrey White.