Internet Lawyer Blog

Samsung Electronics, the second largest maker of mobile phones, claims that Apple Inc. has infringed upon its patents since entering the mobile-phone market with the iPhone 3G, a lawyer for Samsung told a Dutch court as the Korean company seeks a ban on some Apple products in the Netherlands.

"Apple just entered the market in 2008 without taking care of the licenses," Bas Berghuis van Woortman, a lawyer for Simmons & Simmons LLP who represents Samsung, said in The Hague court. "Apple is consciously, structurally infringing the 3G patents."

The parties will be discussing settlement soon as this is yet another legal battle between two technology giants over intellectual property rights.

In the recent years, numerous Internet forums (aka "online message boards") have provided a place for Internet users to discuss issues, entities/companies, and persons or individuals, who are often disguised in some form of anonymity. Sometimes, the targets of disparaging comments react by filing lawsuits in state or federal courts against unidentified ("John Doe") defendants for claims such as violation of securities laws, breach of confidentiality agreement, and libel. Generally, in such disputes subpoenas are submitted to the message board hosts so to identify the authors. Notwithstanding the various challenges, the courts differ in their treatment of such subpoenas.

For example, see Jon Hart & Michael Rothberg, Anonymous Internet Postings Pit Free Speech Against Accountability, WSJ.com (March 6, 2002).

In Mobilisa, Inc. v. Doe, 170 P.3d 712 (Ariz. Ct. App. 2007) Mobilisa, a communications company, filed a complaint against numerous "John Doe" defendants who had submitted an anonymous e-mail to Mobilisa's management team about the company's founder and CFO's conducts. Thereafter, Mobilisa attempted to compel The Suggestion Box, which was the service provider through which the e-mail was submitted, so to obtain the person's identity who had submitted the e-mail. The trial court granted Mobilisa's request and ordered The Suggestion Box to reveal the identities of the anonymous senders. Thereafter, The Suggestion Box and the senders of the e-mail appealed the trial court's decision.

The Arizona court of appeals ruled that a court considering a request to require disclosure of the identity of an anonymous speaker must consider three factors: (1) whether the defendant was given adequate notice and opportunity to respond to the request, (2) whether the plaintiff's cause of action can survive a motion for summary judgment on elements not dependent on the speaker's identity, and (3) whether a balance of the competing interests weighs in favor of disclosure. Because the trial court considered only the first two factors, the court remanded the case to the trial court to consider the third factor.

Also, in Columbia Insurance Co. v. Seescandy.com, 185 F.R.D. 573 (N.D. Cal.1999), plaintiff attempted to sue anonymous defendants for registering the plaintiff's trademark as the defendants' domain name. The court would not issue a temporary restraining order against the defendants until they were properly served with the complaint, which required the plaintiff to identify the anonymous defendants. Balancing the public interest in providing injured parties with a forum to seek redress for grievances against the legitimate and valuable right to participate in online forums anonymously, the court formulated a four-part test for deciding when to permit discovery to uncover the identity of an anonymous defendant before a complaint has been served.

The district court held that plaintiff must: (1) identify the anonymous defendant with sufficient specificity to allow the court to determine that the defendant is a real person or entity that could be sued in federal court; (2) identify all previous steps taken to locate the elusive defendant; (3) establish to the court's satisfaction that the plaintiff's suit against the defendant has sufficient merit to withstand a motion to dismiss; and (4) file a request for discovery with the court, along with a statement of reasons justifying the specific discovery requested, and must identify a limited number of persons or entities from which the plaintiff could take discovery that might lead to identifying information making service of process on the defendant possible.

As readers can see, a claimant who is seeking to discover the identity of an anonymous Internet user and seek damages, must prove several elements. Please contact us if you have any questions or concerns relating to this topic.

Pursuant to Section 230 of the Communications Decency Act, no provider of an interactive computer service may be treated as the publisher of information provided by another information content provider. See 47 U.S.C. § 230(c)(1). The term "interactive computer service" means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.

Generally, holding a website operator as the publisher of an allegedly libelous statement by a third party violates the Act. See Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997), cert. denied, 524 U.S. 937 (1998). Accordingly, the standard pursuant to Zeran is that when an online service provider receives a retraction demand regarding statements the service provider did not write, the demanding party should be re-directed to the third-party originator (i.e., the person who originally wrote the defamatory statement).

California's Retraction Statute under Cal. Civ. Code § 48a states that:

1. In any action for damages for the publication of a libel in a newspaper, or of a slander by radio broadcast, plaintiff shall recover no more than special damages unless a correction be demanded and be not published or broadcast, as hereinafter provided. Plaintiff shall serve upon the publisher, at the place of publication or broadcaster at the place of broadcast, a written notice specifying the statements claimed to be libelous and demanding that the same be corrected. Said notice and demand must be served within 20 days after knowledge of the publication or broadcast of the statements claimed
to be libelous.

2. If a correction be demanded within said period and be not published or broadcast in substantially as conspicuous a manner in said newspaper or on said broadcasting station as were the statements claimed to be libelous, in a regular issue thereof published or broadcast within three weeks after such service, plaintiff, if he pleads and proves such notice, demand and failure to correct, and if his cause of action be maintained, may recover general, special and exemplary damages; provided that no exemplary damages may be recovered unless the plaintiff shall prove that defendant made the publication or broadcast with actual malice and then only in the discretion of the court or jury, and actual malice shall not be inferred or presumed from the publication or broadcast.

3. A correction published or broadcast in substantially as conspicuous a manner in said newspaper or on said broadcasting station as the statements claimed in the complaint to be libelous, prior to receipt of a demand therefor, shall be of the same force and effect as though such correction had been published or broadcast within three weeks after a demand therefor.

4. As used herein, the terms "general damages," "special damages," "exemplary damages" and "actual malice," are defined as follows:

(a) "General damages" are damages for loss of reputation, shame, mortification and hurt feelings;

(b) "Special damages" are all damages which plaintiff alleges and proves that he has suffered in respect to his property, business, trade, profession or occupation, including such amounts of money as the plaintiff alleges and proves he has expended as a result of the alleged libel, and no other;

(c) "Exemplary damages" are damages which may in the discretion of the court or jury be recovered in addition to general and special damages for the sake of example and by way of punishing a defendant who has made the publication or broadcast with actual malice;

(d) "Actual malice" is that state of mind arising from hatred or ill will toward the plaintiff; provided, however, that such a state of mind occasioned by a good faith belief on the part of the defendant in the truth of the libelous publication or broadcast at the time it is published or broadcast shall not constitute actual malice.

A defamatory statement is one that injures the reputation of another. The common-law torts of libel and slander punish the publication of statements that are both defamatory and false. Generally, a libelous statement is a false and defamatory statement published in writing. A slanderous statement is a false and defamatory statement expressed orally. False and defamatory oral statements broadcasted over the radio or television are now widely considered libel, rather than slander. In some cases, money damages may be awarded to compensate the victim of libel or slander for the reputational injury caused by publication of the false and defamatory statement.

However, in recent years there has been significant tension between the common-law protections of reputation and the mandate of the First Amendment to the Constitution that "Congress shall make no law . . . abridging the freedom of speech, or of the press. . . ."

To ensure that debate on public issues remains "uninhibited, robust and wide-open," New York Times v. Sullivan, 376 U.S. 254, 270 (1964), the United States Supreme Court has found that the First Amendment limits the circumstances under which a speaker or publisher may be punished for making false and defamatory statements: "Neither lies nor false communications serve the ends of the First Amendment . . . [b]ut to insure the ascertainment and publication of the truth about public affairs, it is essential that the First Amendment protect some erroneous publications as well as true ones." St. Amant v. Thompson, 390 U.S. 727, 732 (1968).

As such, in order to recover for libel or slander, a plaintiff must establish not only that: (1) defendant published a defamatory statement; (2) statement was made about the plaintiff; and (3) the statement was demonstrably false; but a plaintiff must also prove that the statement was made with "fault."

The degree of fault plaintiff must establish depends on whether the plaintiff is a public official or public figure, or a private figure. A public official or public figure must establish constitutional "actual malice" (i.e., publication with knowledge of falsity or subjective awareness of probable falsity). A private figure need only demonstrate that the wrongdoer/defendant was "at fault" in publishing the false statement at issue and a showing of negligence is sufficient in most states.

For more information see: New York Times Co. v. Sullivan, 376 U.S. 254 (1964); St. Amant v. Thompson, 390 U.S. 727, 732 (1968); Gertz v. Robert Welch, 418 U.S. 323, 347 (1974); Philadelphia Newspapers v. Hepps, 475 U.S. 767, 768 (1986); and Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990).

The issue of online service provider liability comes up often in today's high-tech world. In order to promote free discussion and private investment in the Internet, the United States Congress immunized providers of "interactive computer service[s]" against liability arising out of content provided for publication by any other "information content provider." See Section 230 of the Communications Decency Act of 1996, 47 U.S.C. § 230. This section does not limit the application of intellectual property laws or criminal laws, but it protects Internet service providers and website operators against a broad range of tort, contract, and other claims arising out of content created by third parties.

Section 230(c)(2)(A) states that "[n]o provider or user of an interactive computer service shall be held liable on account of...any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected."

Section 230(c)(2)(B), provides immunity for "any action taken to enable or make available to information content providers or others the technical means to restrict access to [such material]." The immunity offered under Section 230(c)(2) is also referred to as the "Good Samaritan" protection.

Generally, most courts have applied the protection of Section 230 broadly, ruling that ISPs (e.g., AT&T, TimeWarner, AOL) and those operating websites enjoy immunity from liability. Stated otherwise, as long as the material complained of was written by a third party, rather than an agent or employee of the ISP or website, the ISP or website is immune from liability. In addition, the operator of a website may choose to exercise control over the content of its site by removing or editing content provided by third parties without becoming liable as the "publisher" of the third-party statements.

In 1998, the U.S. Court of Appeals for the Fourth Circuit held that even if a publisher or website is put on notice that it is distributing a libelous statement posted by a third party, it cannot be held liable for failure to remove the statement. The court also held that the scope of Section 230 extends to "any cause of action that would make service providers liable for information originating with a third-party user of the service." See Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997), cert. denied, 524 U.S. 937 (1998).

In New York Times Co. v. Sullivan, 376 U.S. 254 (1964), the United States Supreme Court ruled that the First Amendment limits common-law defamation claims brought by public officials. The Court held that to recover for publication of a defamatory falsehood, a public official must prove that the challenged statement was "of and concerning" the public official plaintiff, that the statement was false, and that the defendant acted with "actual malice." The Court defined "actual malice" as publication with knowledge that the statement was false or with reckless disregard of whether the statement was false or not.

Later, the Supreme Court extended the standard announced in New York Times Co. v. Sullivan to defamation cases brought by "public figures." Public figures include individuals who voluntarily inject themselves into public controversy, as well as those who are involuntarily thrust into the limelight, even if only with respect to a particular activity or incident.

A private-figure defamation plaintiff can recover damages based on the defendant's negligence (or a more speech-protective standard, under the law of some states). In no instance, however, can a private-figure plaintiff recover damages for defamation without a showing of fault amounting to, at least, negligence. Any lesser standard, the Supreme Court concluded, would unduly burden free speech. Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974). And, at least when the speech relates to an issue of public concern, a private-figure plaintiff must bear the burden of proving falsity; the defendant speaker is not obligated to prove the truth of the challenged statements. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 768 (1986).

A defamatory statement is one that injures the reputation of another. The common-law torts of libel and slander punish the publication of statements that are both defamatory and false. Money damages may be awarded to compensate the victim of libel or slander for the reputational injury caused by publication of the false and defamatory statement.

A libelous statement was traditionally a false and defamatory statement published in writing. A slanderous statement is a false and defamatory statement expressed orally. False and defamatory oral statements broadcast over radio or television are now widely considered libel, rather than slander.

Click here to review Sections 44-48 of the California Civil Code.

To reconcile the tension between libel law, which punishes speech, and the First Amendment guarantee of freedom of speech, the Supreme Court has limited the circumstances under which a publisher may be punished for making false and defamatory statements.

A libel plaintiff must prove that the challenged statement is false; the publisher does not have the burden of proving truth.

A plaintiff that is a public official or a public figure can only recover for libel if he/she/it can prove that the defendant published the defamatory statement either with knowledge that the statement was false or with serious subjective doubt about the truth of the statement.

A private figure plaintiff must prove, at a minimum, that the defendant was negligent in publishing the allegedly defamatory falsehood.

Courts have long distinguished among those who publish or republish a defamatory statement, those who deliver or transmit material published by a third party, and those who merely provide facilities used by a third party to publish defamatory material.

"Publishers," such as newspapers, magazines, and broadcasters, control the content of their publications and are, accordingly, held legally responsible for any libelous material they publish.

"Distributors," such as bookstores, libraries, and newsstands, cannot be held liable for a statement contained in the materials they distribute unless they knew or had reason to know of the defamatory statement at issue. Distributors are under no duty to examine the publications that
they offer for sale or distribution to ascertain whether they contain defamatory statements.

Common carriers, such as telephone companies and Internet service providers, which do no more than provide facilities by which third parties may communicate, cannot be held liable for defamatory statements communicated through those facilities unless they have participated in preparing the defamatory material.

Section 230 of the Communications Decency Act immunizes the provider of an "interactive computer service" from being held liable as the publisher or speaker of any information provided by "another information content provider." With only a few exceptions, courts have interpreted Section 230 broadly, immunizing publishers from liability for freelance content, bulletin-board postings, and other third-party content. Also, click here for more information.

No other country enjoys defamation laws that are as speech-protective as those of the United States. A number of U.S. publishers have been sued for libel in foreign jurisdictions based on statements published on their websites, which are accessible worldwide.

Many states have retraction statutes that protect writers and publishers by requiring that a potential libel plaintiff give notice before filing suit to allow the publisher and/or the writer to issue a clarification, correction, or retraction, if warranted. Depending on the state, publishing a retraction that conforms to the statutory requirements can reduce the damages available to the plaintiff or even bar a libel claim completely.

It is not clear that all categories of online "publication" fit within the definitions of such statutes. However, courts have indicated that the closer an online publication is in form and content to a protected "traditional" printed publication, the more likely the online publisher will be protected under the retraction statute. Similarly, the more broadly the statute is written, the more likely "new" media publishers will be able to argue successfully that the statute applies to them.

Courts have ruled that an electronic version of a print original does not constitute "republication." Archived copies of original publications are likewise part of the original publication (and not separate "republications").

In the recent years, politically-motivated hackers have made sensitive information available to bloggers and mainstream media at unprecedented rates. For example, Wikileaks released leaked Afghan war logs and government diplomatic cables. Anonymous individual hacked and released emails from the computer security firm HBGary. A college student gained access to and released emails from Sarah Palin's Yahoo account. LulzSec hacked into and publicly released confidential data belonging to Sony and others. Most recently, the Antisec movement hacked into over 70 police departments and released confidential emails and other files.

A this time, some important questions to ask ourselves would be as follows:

1. What are some applicable legal issues when publishing information obtained by hackers?

2. Is there any limit on the type of information that may or may not be published?

3. Is it necessary to revise the laws that protect sensitive information?

Please contact our offices if you are facing similar legal issues.

The United States government recently filed suit against 17 financial companies, including, but not limited to, the largest domestic banks, for selling Fannie Mae and Freddie Mac mortgage-backed securities worth billions of dollars that turned bad when the housing market collapsed.

Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. were some of the financial firms which were targeted by the lawsuits. Also, European banks including the Royal Bank of Scotland, Barclays Bank, and Credit Suisse were also included in the recent lawsuit.

These complaints were filed by the Federal Housing Finance Agency. This agency oversees Fannie and Freddie which purchase mortgage loans and securities issued by lenders. The total price of the mortgage-backed securities sold to Fannie and Freddie equals $196 billion.

At this time, the federal government has not disclosed the amount of damages it is seeking against the aforesaid entities. However, it is speculated that it seeks to cancel the securities sales and to be compensated for the lost principal, interest payments, and the associated legal fees. It is generally expected that the parties settle legal disputes in the near future and before reaching the trial.

This epic battle between the federal government and banks is a by-product of the lack of regulation in the mortgage industry which has caused significant distress to the public. As we all know, many Americans faced or are facing foreclosure of their homes. This matter begs the question as to what happened to capitalism and the American dream? Is this the end or just the beginning of our financial crisis?

Please stay tuned for more news and analysis of this important topic on future blog posts.