Cybersmears – another great Net tradition falls by wayside

Cybersmearing, otherwise known as online defamation, became a trickier pastime last week when a New Jersey state judge ruled that anonymous messages on Yahoo! Finance by three defendants constituted libel against Biomatrix, a bio-medical firm which previously employed two of the libellers.

The next step will be the assessment of damages, which are likely to be greater than the defendants are able to pay. This appears to be the first US case where a court has decided that online posting could constitute libel, since previous cases have been settled or dropped.

Biomatrix objected to a comment that its CEO was a doctor who worked for a well-known German political party which ceased after the war (by not saying Nazi, the search engines won't catch this and result in our getting flames...), and that Synvisc, a drug it produced for arthritis, killed people.

"Baseless and false," was Biomatrix's response, its sensitivity perhaps being increased as the result of an intended merger with Genzyme Corp and fears that this could be prejudiced, since the shareholders hadn't at that time voted on the deal.

Defamatory

There have been hundreds of cases, mostly connected with comment on companies in a stock market context, where the companies concerned have subpoenaed the ISPs to discover the identity of the anonymous cybersmearers before taking action against them.

They usually succeed, since an ISP is unable to deny a subpoena request. True to the tradition of American ambulance-chasing entrepreneurism, there's already a company offering to help find the identities of cybersmearers: the Internet Crimes Group's eWatch service boasts it assists PRNewswire customers to counter such "malicious and criminal acts".

A contentious issue is whether the cybersmearers should be first warned before their identity is revealed by the ISP. Yahoo!, which has figured prominently in such cases, now has a policy of giving a 14-day advanced warning to the smearer, in order that a defence to the revelation could be entered if desired.

Yahoo even has a message board for John Doe defendants. Lawyers for smearers have argued that it should be necessary for the criticised companies to prove damage before identities are revealed, but courts usually do not like defendants to be unidentified.

AOL and MSN also inform users of unmasking subpoenas, but in general the ISPs wriggle and do not like to take a public position on such matters.

First amendment

A Florida county court decided in June that First Amendment arguments may not be used to protect anonymity, but there is a problem since there is a deep tradition of free-ish speech in the US, starting with the 1787/8 Federalist Papers by "Publius" that criticised the US Constitution.

Some say that the authors wanted to protect themselves and so remained anonymous, while others like Paul Finkleman of the University of Tulsa suggest that it was the intellectual fashion of the time to do this, unlike today when we venerate celebrity rather than the ideas themselves.

A question that the courts will need to consider is the possible difference between political comment and business comment, as well as the tricky but more mundane business of deciding the boundary between legitimate criticism and defamation, on a case-by-case basis.

So far the courts seem to finding that there is no difference in defamation law between printed and online media. As might be expected, the American Civil Liberties Union has been active in defence of the right to criticise and for the John Does to remain anonymous, with this being breached "only when necessary".

In many cases, the smeared party wants to find out who is doing the smearing, and since it is often an employee (or ex-employee). Threats by the employer then often result in the employee being dismissed and the case being dropped.

These muzzling attempts are appropriately called SLAPP actions (a strategic lawsuit against public participation), with corporate legal action being more concerned with suppression than retribution. ®

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