This suddenly reminds me of a law that George W Bush had snuck into a bill that would make it illegal to be annoying online. Since anything and everything can annoy someone, you can easily see the stupidity of the law. As if we'd expect anything smart to come from Dubya's head.
This law is arguable worse, though, because a person can just SAY that they are humiliated or embarrassed in order to get someone thrown in jail out of spite.
A lot of companies these days seem to use the practice of "shoot first, ask questions later" when it comes to filing lawsuits. And they're learning the same lesson that Creative Lab has learned: think about the consequences before you litigate.
Some lawyers may be upset with the above statement, but only because they benefit from such behavior.