Tech Law update

I have been blogging less because I am working on a technology & law related project (more information soon). In the meantime:

Online Defamation

Kiwiblog noted an interesting Canadian defamation case (Baglow v Smith) involving defamation on political blog sites:

On 30 August 2011 the Ontario Superior Court of Justice handed down judgment in the case of Baglow v. Smith, 2011 ONSC 5131. The decision suggests that an allegedly defamatory statement made in a debate on a blog or internet forum may not be found to be defamatory if the plaintiff previously engaged in the debate but did not respond to the statement despite having the opportunity to do so.

Canadian law firm Heenan Blaikie has a summary of the case here:

At the risk of over-simplifying the matter, the court’s decision can be summarized as this: there is something meaningfully different about online statements, particularly those which are made on political blogs and discussion forums, which militates that they be treated differently for purposes of defamation law. Put somewhat differently (and, again, with the qualification that this over-simplifies matters): impugning someone’s name on the broadcast evening news is different from impugning their name on a blog.

New Zealand courts give weight to Canadian judgments, and it will be interesting to see whether this case is raised in a New Zealand defamation proceeding in due course.

Amazon’s “one click” patent reaffirmed in NZ

Amazon’s infamous “one click” patent has been reaffirmed in New Zealand by a decision of the Commissioner of Patents, Amazon.Com, Inc v Patrick Ryan Costigan [2011] NZIPOPAT 12 (21 July 2011). The opposition to the patent does seem to have been somewhat quixotic – the opponent was not represented at the hearing, whereas Amazon had a team headed by a QC appear to defend its patent, as well as evidence from US and Australian patent experts. The Commissioner also noted that the patent had been upheld in Australia.

Google cleared in Australian ad-word case

The Australian Competition and Consumer Commission – the equivalent of NZ’s Commerce Commission (but rather tougher, it has to be said) – has lost a case it brought against Google alleging that Google engaged in misleading and deceptive conduct by mixing ads into its search results. The Court also found Google had not breached trade practices law by using (or allowing the use of) competitors’ names and trademarks in sponsored links. The full 73 page judgment is here.

UK Govt asks for Search Engine De-optimisation

Computerworld reports:

Google and other search engines, including Microsoft Bing and Yahoo, will be asked by the UK government to push copyright-infringing websites down their search results under new plans.

Which sounds like it could open a can of worms… The article also notes:

… it is understood that there could be forthcoming legislation, within the Communications Bill, if an industry-run solution is not found.

Which will certainly be a can of worms.

Watch the UK Supreme Court live

In what is understood to be a first, the UK Supreme Court (which in 2009 replaced the House of Lords as the UK’s highest court) now transmits a live coverage of hearings. This is a good step forward for open justice, because while most court hearings are open to the public, they are usually rather inaccessible. The Supreme Court coverage is available here streamed via Sky UK.

Tech law update 9 June 2010

Software patents and venture capital

An argument often made in support of software patents is that attracting investment will be harder without them. Clearly this isn’t always the case. US venture capitalist Brad Feld has written an open letter against software patents:

In more recent years, patents on software have been granted – hundreds of thousands of patents. These patents cover essential techniques in computer programming, and their existence is having a chilling effect on the startup companies that I work with… Venture capitalist like me, who work with new innovative start-ups can testify that software patents have a chilling effect on the market.

He joins a number of other venture capitalists who have expressed similar sentiments. Now, this is not an either/or situation. There is no doubt that many investors have been, and will continue to be, attracted by a potentially lucrative software patent. But comments such as Feld’s highlight the potential “chilling effects” of software patents, as seen by some investors, and also (further) dispel the myth that software patents are necessary for investment – as reflected by the fact that a huge amount of IT investment has always occurred in situations without software patents.

See also: Protecting IP in a post-software patent environment

Waiting for Bilski

Feld’s letter also highlights the long-awaited Bilksi decision. The case has attracted attention for the potentially major implications on the US patent system – of relevance to all patent-holders including in New Zealand – as well as the long wait for judgment.

Defamation by hyperlink

A US court ruling that “forwarding a link to defamatory material can be considered defamation” has caused some consternation, showing again that, thanks largely to constitutionally protected free speech, US defamation laws are rather less stringent than in New Zealand. Under New Zealand / English common law, such actions have long been capable of being defamatory. For example, in the old case of Hird v Wood (1894) 38 SJ 234, a Court found that a man sitting in a chair and pointing at another person’s defamatory sign contributed to the defamation. If linking is “innocent”, however, the publisher has a defence.

Trade Me, but don’t defame me

A defamation lawsuit against an eBay buyer who left negative feedback has received comment from New Zealand defamation experts:

“The law is no different if someone writes it online or in a newspaper” – William Akel of law firm Simpson Grierson.

“People get away with an awful lot online and it’s been going on for a while but I haven’t seen a flood of complaints. We don’t live in a litigious environment.” – David Campbell of Campbell Law.

Victoria University defamation expert Professor Bill Atkin said the online community should remember “the wisest course is often the cautious one”.

This is good advice, although people should not be afraid to state (non-recklessly) their genuine honest opinions. Free speech is protected in New Zealand via two laws. First, section 14 of the Bill of Rights 1990 (an unsatisfactory piece of legislation) states:

Freedom of expression: Everyone has the right to freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind in any form.

Second, section 10 of the Defamation Act 1992 allows a defence of honest opinion. However, this is not completely unrestricted and generally requires that:

  • The opinion is based on true facts;
  • The comments must be reconisable as opinion; and
  • The opinion is genuinely held.

Two important facts about the eBay lawsuit are:

  1. The alleged defamatory comment was: “Bad seller, he has the ethics of a used car salesman“.
  2. The buyer’s listing said “We cannot give you any guarantees and must offer it on an as-is, where-is basis only”.

It will remain to be seen whether the claim succeed, bearing in mind that defamation law in the US is relatively restricted.

Possibly the buyer’s mistake was to comment too broadly on the seller’s ethics. It can be safely assumed he is expressing his opinion on that point, but such a broad statement is open to allegations of defamation. Of course feedback comments are supposed to be very brief, but if the buyer had taken a little more care the situation would likely have been avoided. For example, the buyer could have said “I was very misled by this seller’s listing.”  That would be much more difficult to attack because it is a comment on the buyer’s own feelings, not a sweeping accusation of dodgy ethics.

In the case of Trade Me / eBay feedback, it will also be interesting to see whether a defence of consent (section 22 Defamation Act 1992) could protect (or limit) otherwise defamatory feedback. When users buy or sell on auction sites, they know that feedback will almost always be given. Users know the purpose of the feedback is to share trading experiences – good, bad or neutral. A user could not reasonably claim that they never expected an upset trader to post critical feedback as “their side of the story”, whether based on correct or incorrect facts. Responding to critical comments is also provided for and expected.

It is also worth noting, in the eBay case, that the plaintiff (the seller) is a Miami lawyer, and the defendant claims to have spent USD$7,000 fighting the $15,000 suit. In the highly litigious United States (where even a dry-cleaned pair of trousers can turn into a $67 million lawsuit) this is relatively small. In New Zealand, which is not litigious, in most cases it would probably be completely uneconomic for an occasional, sole trader to make a defamation claim. The best first step in the case of unfair or defamatory conduct would be to contact the website in the first instance. Trade Me has policies on feedback on its website.

Tech law news 12 April 2010

Government confirms ban on software patents

Commerce Minister Simon Power has confirmed that the Government will adopt the recommendation to ban software patents in New Zealand. The speed of this announcement is somewhat surprising, as lobbying against the ban had been signalled.

The Economist on shorter copyright terms

The Economist says it is “time to tip the balance back” on copyright terms:

Largely thanks to the entertainment industry’s lawyers and lobbyists, copyright’s scope and duration have vastly increased. In America, copyright holders get 95 years’ protection as a result of an extension granted in 1998, derided by critics as the “Mickey Mouse Protection Act”. They are now calling for even greater protection, and there have been efforts to introduce similar terms in Europe. Such arguments should be resisted.

In New Zealand, the copyright term is generally the life of the author plus 50 years – meaning that the period often cannot even be determined while the author is still alive.

Website operators: edit comments at your own risk

The Register reports on a recent case highlighting the defamation risk of editing website comments. A key issue in New Zealand is whether the website operator “assumes responsibility” for another person’s potentially defamatory comment. As I say in my article published here:

If your website publishes third-party content (e.g. forums, search results of other sites, user ratings, etc), ensure that you are not seen as “assuming responsibility” for that content. In practice, this can include not exercising editorial control over articles and comments. This will not always be possible or appropriate on some websites.

The long reach of the e-law

The global reach of the internet sometimes creates practical difficulties for law enforcement and, for private litigants, in “getting a remedy”. In essence, one country’s laws do not have (without special arrangements) “extraterritorial” effect in another country. But that does not mean that just because something or someone is located overseas, a court in another country cannot claim jurisdiction.

This issue has arisen several times in defamation proceedings, where a person complains that they have been defamed in another country, even though they would not be able to sue for defamation in that second country. A few years back, an Australian court ruled that an article posted on the internet is considered published wherever it is downloaded. So an article written in the United States by a US citizen, and not actionable in the US, could be actionable in Australia if it is defamatory under Australian law.

Another example, this time involving criminal law, is currently underway with the Australian Human Rights Commission threatening to lay charges against the US-based operator of Encyclopedia Dramatica over an offensive entry on Aborigines.

Similarly, a UK court recently confirmed that English criminal law can apply to internet content accessible in the UK, regardless of where in the world it is hosted. Meanwhile, three US-based Google managers were convicted in absentia by an Italian court for “allowing”  disturbing footage of an Italian boy being bullied to be posted online, and not removing it.

In other cases, specific legislation (e.g. section 7A of the Crimes Act) or public policy may compel or be used to justify a court exercising jurisdiction. For example, in New Zealand the Commerce Commission has successfully prosecuted overseas residents for breaches (in New Zealand) of the Fair Trading Act.

In summary, it does not typically matter that a server, or a person, is located outside of the jurisdiction. The fact that conduct occurs in a jurisdiction (e.g. material can be accessed in a jurisdiction in the same manner as if the server or material were located there; conduct by an overseas person is “aimed” at the local jurisdiction)  is often sufficient.

Name suppression and the internet

The Law Commission has published its report on name suppression. On the issue of name suppression on the internet it makes one recommendation:

Where an Internet service provider or content host becomes aware that they are carrying or hosting information that they know is in breach of a suppression order, it should be an offence for them to fail to remove the information or to fail to block access to it as soon as reasonably practicable. [7.16]

With regards to hosts, this is largely the status quo. It is less clear what an ISP that is “carrying” suppressed information is supposed to do. It would be impractical and ineffective, for example, to require ISPs to block access to sites it didn’t host. Of course, once a suppressed name has been communicated beyond our shores, any restrictions imposed by New Zealand law ceases to have any effect. If a major sports star had name suppression in New Zealand, and it was reported by Australian newspapers, would every ISP in New Zealand be expected to block access to those Australian websites?

The report’s findings on internet issues are brief, and don’t quite grasp the essential difficulties that the internet presents to the name suppression regime.  It states:

Where information as to the identity of someone appearing before a court is already in the public domain, it will not generally be appropriate to grant name suppression. The law will not undertake an exercise in futility, which would bring its own authority and processes into disrepute. [3.65]

Yet in many recent cases involving name suppression, that is precisely what has occurred. Twitter, Facebook and other local and international web sites are routinely used to blithely report (or more often, speculate on) the identity of the individual. An invariable side effect is the gross defamation of innocent persons unlucky enough to fit some “non-identifying” criteria not covered by the suppression order. There is every reason to think this phenomenon will become more and more common. In fact, the application of a suppression order, in many cases, simply has the effect of causing more speculation and breaches of the order – a manifestation of the Streisand effect.

The report noted that name suppression is generally more readily available in New Zealand than in Australia or the United Kingdom. One interesting statistic which the report did not appear to have considered, however, is how effective name suppression orders (in high profile cases) have been. Anecdotal evidence as well as personal experience suggests they are increasingly ineffective.

If the law is not to permit exercises in futility, this issue may need to be revisited again before long.