Pursuant to a California court order of February 24, 1999, Microsoft was ordered to remove an anti-spam filtering feature from the new version of Outlook Express, the email program scheduled to be shipped mid-March as part of Microsoft's Internet Explorer 5. The issuance of a preliminary injunction by a California Superior Court on February 2, resulting from a lawsuit by Blue Mountain Arts, required that Microsoft remove a filter that diverts "bluemountain.com" e-mail greetings to the "Junk Mail" folder.

Blue Mountain's web site, developed in 1996, allows customers to send customized, interactive greeting cards to other Internet users via e-mail free of charge. Blue Mountain derives revenue through commissions from banner advertisements with direct electronic links to the advertiser's web site. In November, 1998, Blue Mountain discovered that the trial version of Microsoft's Internet Explorer 5.0 comes with a filter that sends Blue Mountain's greeting cards to a "Junk Mail" folder, rather than to the inbox where the intended recipient would be more likely to read it. When Blue Mountain contacted Microsoft on November 19, 1998 to complain, they were informed that the problem was caused by a bug in the email software and that Microsoft would fix it. The following day, Microsoft informed Blue Mountain that it would not fix the problem until an unknown future date.

In its complaint filed on December 8, 1998, Blue Mountain alleged that Microsoft was able to block Blue Mountain from delivering its electronic greetings to the intended recipients during the popular and busy holiday season as a result of the filter. Blue Mountain points to the concurrent development of Microsoft's own Internet site for greeting cards as the impetus for the filter of their cards. At the time that the complaint was filed, Microsoft was distributing the trial versions of Internet Explorer 5.0 for free through its web site. In addition to the complaint, Blue Mountain also requested a restraining order on December 9 to prevent Microsoft from blocking the delivery of the electronic greeting cards.

In response to the request for the restraining order, Microsoft asserted that greeting cards from their web site, as well as those from other electronic greeting card companies, were equally affected by the experimental email filter. In addition, Microsoft alleged that Blue Mountain knew that it could fix the problem by changing certain attributes in its notification message that is sent to the recipient of the greeting card and, in fact, that Microsoft even provided Blue Mountain with a proposed notification message that would not be rejected by the filter. Microsoft defended its position by pointing out the advantages of "spam" filters, which providers users with the option of sorting their important email from unsolicited commercial email, or "junk mail." The filter developed by Microsoft uses an algorithm to determine whether a message is junk mail. Microsoft insists that the filter was not designed specifically to reject the notification messages from Blue Mountain's web site. In addition, Microsoft points out that the email filter on this test version must be activated by the user, it is not automatically set up to reject the mail that it considers "junk."

On December 17, 1998, a California Superior Court granted Blue Mountain's restraining order, requiring Microsoft to provide Blue Mountain with the information necessary to change its notification message so that it would pass through the filter at its default setting. In addition, the order required Microsoft to post a short warning at its site where the software can be downloaded, informing users that it they turn on the filtering device, some messages will be routed to the "Junk Mail" folder. The final part of the order required Microsoft to inform Blue Mountain, in advance, of any change in the software program that would affect the filter.

On January 28, 1999, the Superior Court of California granted a preliminary injunction against Microsoft. The court proceedings point to the fact that the two parties are competitors and that Microsoft actually attempted to or explored the possibility of buying out Blue Mountain in the past. The court did not accept Microsoft's defense that the developers of the filter were unaware of the greeting card aspect of Microsoft's business. In fact, the court found intent on the part of Microsoft not only to filter out unsolicited commercial email in general, but to target Blue Mountain in specific as well. The court was concerned, most importantly, with the fact that the final version of this software has not been released; the versions that were blocking the notification messages from Blue Mountain was just a test version. The court, mentioning that there is nothing in the prior restraining order to prohibit Microsoft's final version from allowing its own cards through while rejecting those of Blue Mountain, determined that it was necessary to issue the preliminary injunction.

The injunction orders Microsoft to restrain from including a filter that impedes the delivery of Blue Mountain greeting cards or notification messages, although consumers would still be allowed to adjust the filter knowingly to block the receipt of Blue Mountain's greeting cards and notification messages. On February 18, 1999, the court modified its order by stating that the conditions would not apply to Microsoft's Outlook 98 and 2000 as long as Microsoft did not change the program for its junk mail filter from that which was produced to Blue Mountain, without its consent. In addition to the injunction, Microsoft was also ordered to pay Blue Mountain $8,468.77 in attorney's fees and costs.