Original URL: http://www.theregister.co.uk/2006/05/23/p2pnet_kazaa_legal/

Kazaa's P2P libel suit threatens to mute Canadians

Silence is golden

By Kevin Fayle

Posted in Media, 23rd May 2006 17:17 GMT

Valley Justice A fresh lawsuit making its way through Canadian courts threatens to result in severe restrictions being placed on what internet users can post to message boards. It just might enhance corporate abilities to strong-arm ISPs and authors, too.

In a strange new turn of events in the Kazaa saga, Sharman Networks and its CEO, Nikki Hemming, have filed a defamation suit in the Supreme Court of British Columbia against P2Pnet operator, Jon Newton, his ISP, and four as-of-yet-unnamed users of the site. Apparently, Hemming and Co. are hopping mad over a few of the articles and postings on the pro-P2P site concerning Hemming's recent Australian court appearance, during which she denied that she sold off a choice piece of Sydney real estate for the purpose of keeping her assets away from record companies out for restitution. 

The content that has so unforgivably bunched Ms. Hemming's knickers contains very little that most people would even think was inappropriate, much less defamatory. [We can't link to the comments in question for obvious reasons, but this story contains a copy of the original complaint, which does point to the P2Pnet articles and comments.] 

Ah, but this is Canada - land of hockey, Molson beer, and courts willing to shell out to almost anyone who feels their personal dignity has taken a hit because of someone else's nasty words. If the Sharman-Hemming duo can convince a court that the writings have tarnished their reputation, it will cost the authors a pretty penny and further limit what Canadians can say on the Net. Here's why.

Let's take a brief look at the basics of Canadian defamation law. A successful plaintiff must prove three essential elements in a libel case: First, that a statement was published and made available to a person other than the plaintiff; next, that the statement referred, directly or indirectly, to the plaintiff; and finally, that the statement was false and would discredit the plaintiff in the eyes of a reasonable person. 

The statements made on P2PNet definitely satisfy the first two prongs; the question is whether or not the court will find that the statements were false and damaged the plaintiffs' reputations in this case. Given the current state of Canadian defamation law, it may be safe to assume that the answer is yes. The B.C. Supreme Court recently determined that placing pictures of teachers on a web site under the subject heading "B.C.'s Least Wanted" constituted an act of defamation, so it's clear that this is a court that doesn't want people saying bad things about each other. 

The articles that Newton published were essentially extended quotations of the Australian Associated Press' account of Hemming's court appearance. As such, the articles would not count as defamation, since there is a qualified privilege to report accurately on court proceedings. Since it is generally reasonable to accept the Associated Press' reporting, Newton didn't act recklessly in putting the quotations on the site. 

Where he may have gone astray, however, is continuing on to quote a comment to his site that accused Hemming and Sharman of hiding money from the Australian government. That comment came from a P2Pnet reader and made its way into the body of the text rather than just the comments section. In the lawsuit, however, Sharman and Kazaa point out four comments - the kind you might find on Slashdot, Yahoo or anywhere else - that make up the majority of the lawsuit, including the one Newton quoted. It's these items that will put Canadian internet users to the test.

Now, most Netizens (the people to whom the statements were actually published) know that anonymous web postings basically amount to rants and raves and should not be taken seriously for any purpose whatsoever. The "reasonable person" who factors so heavily into Canadian libel law does not seem to have grasped this concept, however. For this person, it is reasonable to assume that a statement on an Internet message board carries just as much weight as a statement made in a newspaper or magazine. And a statement that accuses someone of criminal conduct will count as defamation so long as that person or corporation can show that the statement damaged their reputation.

Canadian courts jump at the opportunity to find that reputations have been damaged. Once that happens (and it will happen!), Newton and the poster can get off the hook by proving that the statements were actually true. This places a serious onus on the defendants, however, and will add up to serious time and money spent on litigation. If Newton and the poster can't go the distance and prove to the court that Sharman and Hemming actually hid money from the government of Oz, they will have to fork over cash for suggesting that Hemming and the company are crooks.

Given the likelihood that Sharman and Hemming probably don't want a trial going into the details of whether or not the statements were true, and the fact that the defamation charges against the other statements mentioned in the complaint are rather thin, the main purpose behind the action might actually be to discover the identity of the posters - after all, one of the posters accused Hemming of lying about her age, which she may have taken a little personally. That would essentially make this case a Strategic Lawsuit Against Public Participation (SLAPP).

SLAPPs involve a corporation suing over speech critical of the company. The charges (usually defamation) don't have much weight behind them, and the real purpose of the suit is generally to intimidate an ISP into removing the content, or to find out the identity of a poster so the corporation can terminate an employee, end a business relationship, etc. British Columbia, like many other jurisdictions, doesn't have an anti-SLAPP law on the books, so corporations can continue to use these suits to stifle free participation in ongoing public discourse with no deterrent other than the minimal threat that the weaker defendant will sue them for abuse of the judicial process. 

In this case, the strategy – if that is the strategy – has been working well so far. P2PNet has removed the articles and postings, and the identities of the posters will probably come out in pre-trial discovery - assuming that the postings can be effectively traced. That means that Canadians who have something to say about prominent corporations and their executives may want to think twice before posting it on their favorite website.

Canadians will want to keep their eyes open and mouths shut as this case proceeds. ®

Kevin Fayle is an attorney, web editor and writer in San Francisco and a graduate of the University of California, Hastings College of the Law. When he's not pointlessly running in circles around Golden Gate Park, he scrutinizes and analyzes U.S. Federal case law for the frequent signs of the Second Coming. He keeps a close eye on IP and International Law issues.