7OUTSOURCE

Introduction

It is generally accepted that defamation laws are necessary to protect individual’s reputations. At the same time, abuse of defamation laws is now one of the most significant constraints on the free flow of information and ideas in many countries. This is particularly true in many countries of transition, where cruder forms of restriction are no longer acceptable. However, the defamation laws in many established democracies have also been found to breach the guarantee of freedom of expression.

Internet Service Provider: A company that provides access to the Internet. Before you can connect to the Internet you must first establish an account with an Internet Service provider.

What is defamatory statement?

- A Defamatory statement is statement which is false and which impugns another person’s reputation, or adversely affects his standing in the community
- The publication of a statement which reflects on a person’s reputation and tends to lower him in the estimation of right-thinking members of society generally or tends to make others shun or avoid him.

The Internet and Defamation Liability

The tort of defamation, traditionally, attempts to balance society’s interest of free speech and the individual’s right to his reputation. The way in which this balance is struck varies from jurisdiction to jurisdiction (while some are more pro-plaintiff, others are more pro-defendant). However, the way this balance is struck in any jurisdiction determines how open a country is to free speech and dissemination of information.

That traditional function of the law of defamation is now under threat with the proliferation of information over the Internet and especially so due to its multi-jurisdictional nature. One big fear is that defamation laws can no longer effectively protect the reputation of the individual. Against this is the fear that the application of traditional defamation principles on the on-line environment is likely to fetter the effectiveness of the Internet as a channel of global communication and electronic commerce.

In so far as the Internet is concerned, defamation liability has its most important implication in respect of ISPs and websites (including e-business sites) which host the content of others. Thus, raising the prickly question of the liability of the so-called “innocent disseminators”. Their liability must balance the need to protect the reputation of individuals who are defamed by postings on a global scale, against the need to ensure that through the ISPs and hosting websites, global information flows unimpeded.

The Defence of “Innocent Dissemination”

Historically, publishers of material, like newspapers, who exercise editorial control have been held liable for defamation without the benefit of the defence of innocent dissemination. However, mere distributors, like newspaper vendors, have been able to avail themselves of that defence. It provides, in a nutshell, that if innocent disseminators of defamatory statements did not know of the statements, and there were no circumstances that ought to have alerted them to it (provided that they were not negligent in not being so alerted), they are protected from liability.

ISP Liability in the UK

The law of defamation in the UK differs both in subtle and dramatic ways with the law of defamation in the US. Although an examination of these differences is beyond the scope of this paper, they will be highlighted as they arise in the context of ISP liability. The American decisions discussed supra have been considered by the High Court in the one decision dealing with ISP liability to receive judicial attention in the UK, and as the Court stated in that decision, the American decisions were ‘educative’.[60]

Defamation Act 1996

In the context of ISP liability, the common law rules governing innocent disseminators have been supplanted by the wording of section 1 of the Defamation Act, 1996:

1(1) In defamation proceedings a person has a defence if he shows that:

(a) he was not the author, editor or publisher of the statement complained of,

(b) he took reasonable care in relation to its publication, and

(c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a ‘defamatory statement.’

Section 1(1) is the statutory equivalent of the innocent disseminator defence. The defendant must establish all three requirements for the defence to succeed, unlike in American law where the plaintiff must prove that the defendant was not an innocent disseminator. [62]

In determining the first requirement, section 1(3) states:

‘A person shall not be considered the author, editor or publisher of a statement if he is only involved:

(a) In printing, producing, distributing or selling printed material containing the statement;

(c) in processing, making copies of, distributing or selling any electronic medium in or on which the statement is recorded, or in operating or providing any equipment, system or service by means of which the statement is retrieved, copied, distributed or made available in electronic form;

(e) as the operator of or provider of access to a communications system by means of which the statement is transmitted, or made available, by a person over whom he has no effective control’.

Thus, because of section 1(3), an ISP will normally meet the requirement of s. 1(1), unless the ISP had effective control over the person who made the statement.[63]

Section 1(5) lists some factors to consider when determining the second requirement, taking reasonable care:

In determining for the purposes of this section whether a person took reasonable care, or had reason to believe that what he did caused or contributed to the publication of a defamatory statement, regard shall be had to:

(a) The extent of his responsibility for the content of the statement or the decision to publish it;

(b) The nature or circumstances of the publication, and

(c) The previous conduct or character of the author, editor or publisher’.

The UK legislation therefore adapts the traditional innocent disseminator defence to the on-line environment. It does not provide the carte blanche protection from liability that s. 230 of the American CDA does. An ISP, which by virtue of s. 1(3) is not an author, editor, or publisher; that takes reasonable care, having regard to the factors listed in s. 1(5); and does not know or have reason to believe that what he did caused or contributed to the publication of a defamatory statement, will be protected from liability for defamation.

Would AOL have been protected in the circumstances of Zeran ? Since s. 1(1)(c) requires that the ISP not know that it contributed to the publication, and s. 1(1)(b) requires that a standard of reasonable care be exercised, the facts in Zeran may have produced a different outcome under the UK legislation.

The US & the EU

This position, it must be said, is dramatically different from the position in US which gives absolute protection to ISPs and hosting websites under the US Communications of Decency Act 1996 (section 230). Moreover, it is not in accord with the call by the EU in its recent E-commerce Directive [Article 14(1)] that ISPs should not be held liable for information stored at the request of a recipient of the service, provided there is lack of knowledge or expeditious action is taken upon receipt of such knowledge.

An Inherent Contradiction

One major problem with section 1 of the Act, in its attempt to apply the common law defence of innocent dissemination, is the inherent contradiction (and uniquely inherently so in respect of the Internet) between the requirement that the ISP or hosting website is not a publisher - which is so if it does not exercise editorial control over content - and the added and cumulative requirement that it takes ‘reasonable care’ in relation to the content: which would logically require some form of editorial control.

Case of Defamatory Statement

Bensusan Restaurant Corp. v. King: Protecting the Stream of Commerce Approach

Another emerging line of Internet-based personal jurisdiction cases rejects the sliding scale analysis of Zippo as insufficient to establish personal jurisdiction under traditional notions of fairness. Courts in this line of cases demand more than a Web site to assert jurisdiction, requiring a showing of more purposeful activity on the part of the defendant.

This reasoning can be traced to one of the first Internet cases of note, CompuServe, Inc. v. Patterson, in which a United States district court concluded that asserting personal jurisdiction over Internet users would violate due process. The issue arose as the result of a trademark infringement dispute between a Houston resident who had entered into software agreements with CompuServe, an Ohio corporation. The court held that Patterson’s contacts with Ohio — which were limited to accessing CompuServe’s dial-up network — were too tenuous to establish jurisdiction. The view that a more expansive exercise of jurisdiction over Internet activity is warranted led the United States Court of Appeals for the Sixth Circuit to reverse the decision in 1996, however. Thus, the original Patterson decision is of persuasive but not precedential value to the analysis.

In Bensusan Restaurant Corp. v. King, a New York federal district court considered whether the existence of a Web site, without anything more, was sufficient to exercise personal jurisdiction over a Missouri-based defendant. The plaintiff, owner of a jazz club in New York City known as “The Blue Note,” sued the defendant, the operator of a Missouri night club also known as “The Blue Note,” for trademark infringement, trademark dilution and unfair trade. The alleged infringement occurred on the defendant’s Web site, which contained a logo “substantially similar” to the plaintiff’s and contained references to the plaintiff’s New York club. The defendant moved to dismiss the action for lack of personal jurisdiction, and the court granted the motion, concluding that merely posting a Web site was insufficient to subject the defendant to a suit in New York.

In concluding that creating a Web site, without more, is not an act purposefully directed toward the forum state, the New York federal district court rejected the popular argument that on-line personal jurisdiction be decided according to the “stream of commerce” theory originated in World-Wide Volkswagen. Instead, the court embraced a more lenient approach along the lines of Asahi , in which the U.S. Supreme Court ruled that placement of a product into the stream of commerce is not an act of the defendant purposefully directed at the forum State unless other corroborative elements are present.

The same court again rejected personal jurisdiction based solely on a Web site in Hearst Corp. v. Goldberger. In Hearst, a New Jersey lawyer established a Web site using the domain name “Esqwire.com,” to offer legal services. The New York publishers of Esquire magazine sued for trademark infringement, despite the fact that the site did no more than invited users interested in its legal services to contact the lawyer via e-mail. New Yorkers were found to have accessed the site, but the court found this unconvincing, comparing the site to an advertisement in a national magazine, which had been found in a previous case to be insufficient to provide personal jurisdiction under the state’s long-arm statute. Because the defendant had in no other way directed its products or services to New Yorkers, the court refused to assert personal jurisdiction. In fact, the court took the opportunity to pointedly reject courts that has asserted personal jurisdiction in similar factual scenarios — namely the Inset court — stating that, under that line of reasoning, “this Court, and every other court throughout the world may assert personal jurisdiction over all information providers on the global World Wide Web.” By so doing, the Hearst court rejects the Inset court’s distinction between interactive and non-interactive Web sites and focuses the inquiry instead on the very real issue of whether the site does more than simply allow a user to contact a site host.

Other courts have followed the New York district court’s analysis developed in Bensusan and Hearst . In McDonough v. Fallon McElligott, Inc., a federal district court in California held that allowing mere computer interaction via the Web to establish minimum contacts would “eviscerate the personal jurisdiction requirement as it currently exists.” In SF Hotel Co. v. Energy Investments, Inc., a federal court in Kansas also dismissed a trademark claim on jurisdictional grounds when the sole basis of jurisdiction was the fact that the defendant had a Web site accessible by Kansans.

In a hint of the endless reach of the Internet, a New Jersey resident attempted to exercise personal jurisdiction over an Italian hotel in a personal injury case because the hotel had a web site with pictures and descriptions of the hotel facilities and rooms. The court in Weber v. Jolly Hotels found the Web contact insufficient to exercise personal jurisdiction, stating that the The theme emerging from cases rejecting personal jurisdiction over out-of-state parties with little other contact than e-mail or Web site presence in a state is recognition of the vast interconnectivity of the Internet and the possible consequences of extending personal jurisdiction indefinitely on the judicial system. Due process considerations, and simple judicial efficacy demand that courts take a close look at whether the Internet defendant is truly purposefully availing another jurisdiction

Conclusion

Overall, the Act has failed to make the critical distinction between every other media known to man and the Internet. Until the uniqueness of the Internet is realized, provided for and accommodated by legislation, the position as regards the implication of defamation on the Internet and e-business will remain unsatisfactory. The position can only become anywhere near satisfactory if the law establishes that ISPs and hosting websites - even if they exercise some editorial functions - should not, as a general rule, be liable for defamation for third party content, unless it can be shown that there has been an obstinate failure to provide sensible mechanisms for the prevention of the dissemination of defamatory material.

The liability of ISPs for defamation in the United States and Britain has been addressed by both the courts and legislatures in the respective countries. Early American decisions focused on distinguishing between ISPs that acted as publishers or distributors. Subsequent legislation in both jurisdictions has resulted in marked differences in the potential for legal liability of ISPs in America and Britain that supposedly reflect the inherent government policies of each country. These policies reflect a balancing of such interests as freedom of speech, personal reputation, and the promotion of electronic communication and commerce. The author argues that a liberal judicial interpretation of the relevant provisions of the U.S. Communications Decency Act of 1996 has exceeded the scope of government policy, whereas the U.K. Defamation Act 1996 does little to recognize the Internet as a unique communications medium.