Liability Issues and the Internet Part 3:
DEFAMATION, INVASION OF PRIVACY, AND COPYRIGHT

Scott F. Uhler and Phillipe R. Weiss

INTRODUCTION

While the Internet is a relatively new medium for communication and learning, many traditional legal principles and guidelines remain relevant to an impact upon its use. Issues related to defamation, invasion of privacy and copyright infringement are examples of general areas of legal concern that can have specific ramifications for libraries as providers and users of Internet services.

I. DEFAMATION

The traditional elements of a claim for defamation are:

• A false statement that defames or is harmful to the reputation of another;

• "Published" to one or more third parties without a legal privilege;

• By a "publisher" who is at least negligent in communicating the statement which results in damage or injury.

Liability for defamation transmitted via the Internet is a legal problem facing Internet service providers and Internet access providers as well as users. When defamatory information concerns a commercial enterprise, there also may be a claim for unfair competition of for interference with prospective or current business relationships.

There are very few court cases in the United States that involve defamation over the Internet, which may impact upon libraries. In some ways this is surprising because of the Internet practice known as "flaming," which is on-line statements indicating, frequency in rough and colorful language, disagreement with another person. On the other hand, the paucity of cases may be the result of the novelty of this technology or simply the difficulty in ascertaining the true name and location of the originator of the defamatory statement on the Internet, and because genuine questions exist whether the applicable law of defamation is that of the state where the message originated, or the state where it was viewed.

There have been some defamation cases involving on-line service providers. Cubby Inc., d/b/a Skuttlebut v. CompuServe, d/b/a RumorviIIe, 776 F.Supp 135 (S.D.N.Y. 1991), involved Cubby's claim that defamatory statements about its Skuttlebut computer database were published on an on-line information service run by CompuServe. CompuServe contracted with Cameron Communications Inc. to "manage, review, create, delete, edit and otherwise control the contents" of an electronic bulletin board known as "Journalism Forum." In turn, Cameron Communications Inc. contracted with Don Fitzpatrick Associates to provide an electronic newsletter providing reports about broadcast journalism and writers. The defamatory statements related to claims that Cubby and its Skuttlebut database improperly gained access to information first published in the "Journalism Forum," that one of Skuttlebut's principals was "bounced" by his previous employer, and that the Skuttlebut service was a "new, start-up scam." The court found that CompuServe was acting as a distributor, rather than a publisher. Under New York law, vendors and distributors, such as book sellers and newspaper stands, that transmit defamatory statements are not liable if they neither know nor have reason to know of the defamation. The court emphasized that CompuServe has little or no control over the information published on its network. As a result, the court analogized CompuServe and its computerized on-line service to a traditional news vendor and ruled that CompuServe was not liable unless it knew or had reason to know of the allegedly defamatory statement.

The Cubby decision poses a dilemma for Internet system operators, as well as for Internet access providers such as libraries, implying that the less control the operator exerts over the system, the less exposure to

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liability it incurs. Carried to an extreme, if the system operator were to run its system blindly, never looking at any of the messages contained thereon, its liability for defamation statements would seem to be minimized, even though its liability in other legal contexts may be increased as a result of its total failure to monitor the statement transmitted by its members.

In Stratton Oakmont, Inc. v. Prodigy Services Company, 63 US Law Week 2765 (NY Supreme Court 1995), the court ruled that Prodigy, unlike CompuServe in Cubby, had exercised sufficient editorial control over the contents of its bulletin board service to constitute it a "publisher" for purposes of the defamation claim. In that case, an unidentified user had posted statements that accused Stratton, an investment banking firm, and Stratton's president of criminal and fraudulent acts in connection with an initial public offering of Solomon-Page, Ltd. stock. Prodigy had advertised itself as a network exercising editorial control over the content of messages posted on its bulletin board, had promulgated "content guidelines" requesting users to refrain from posting insulting notes, had warned users that Prodigy would remove such notes, and used a software screening program to prescreen all bulletin board postings for offensive language.

A different issue was addressed in It's In the Cards v. Fuschetto, 193 Wis.2d 429 (1995). The plaintiff and the defendant in that case were participants in a bulletin board known as "SportsNet."A dispute arose between plaintiff and defendant over a cancelled trip the defendant planned to make to New York to visit the plaintiff. Discussions about who would pay for the cost of airline tickets, tickets to a basketball game and tickets to the David Letterman Show were carried online in private e-mail via SportsNet. The defendant then posted a note on the SportsNet bulletin board explaining his side of the story. The plaintiff sued, claiming defamation, negligence and tortious interference with business relations. The defendant asserted a Wisconsin statute, which requires defamation plaintiffs to give notice and an opportunity to correct a libelous statement before a suit can be instituted. The Wisconsin Supreme Court ruled that postings on an Internet bulletin board were not a newspaper, magazine or periodical, so that no prior notice in opportunity to correct was required before filing litigation.

II. INVASION OF PRIVACY

The tort of invasion of privacy involves a number of separate torts such as intrusion, disclosure of private facts, portrayal in a false light and appropriation of a name or likeness. While these torts bear some similarity to defamation claims, invasion of privacy through publication generally relates to the disturbance of a person's "right to be let alone," by publicizing personal matters, creating misimpressions about a person, or misappropriating someone's name or likeness without consent. In Stern v. Delphi Internet Services Corp., 626 NYS.2d 694 (1995), Howard Stern, a radio celebrity, sued Delphi, a provider of Internet access and related services. Delphi had created an electronic bulletin board to debate the merits of Mr. Stern's announced candidacy for New York State Governor. To advertise the bulletin board, Delphi ran advertisements in New York Magazine and in the New York Post. A portion of the ad consisted of a picture of Mr. Stern wearing leather pants that largely exposed his buttocks. Mr. Stern sued for invasion of privacy under a New York statute. Delphi claimed that use of the photograph was within the scope of the "incidental use" and "news-worthiness" exceptions to that statute. The "incidental use" exception is available to news disseminators, and the court found that the exception was apposite. The court ruled that Delphi had not acted unlawfully, but rather its services were analogous to that of a news vendor or bookstore, relying upon the holding in Cubby.

In Steve Jackson Games, Inc. v. United States Secret Service, 36 F.3d 457 (5th Cir 1994), a bulletin board operator sued the Secret Service for invasion of privacy. The Secret Service suspected that an illegally obtained document had been uploaded and stored on the plaintiff's bulletin board service. The Secret Service obtained a warrant, searched the plaintiff's offices and confiscated all computers, including those used for publishing the plaintiff's simulation games. Although the Secret Service searched the computer files and plaintiff's e-mail without finding the document it sought, the Secret Service kept the computers for many months. As a result, the plaintiff sued the Secret Service for violating the federal Privacy Protection Act and the federal Electronic Communication Privacy Act.

These acts proscribed the intentional inception of electronic communications and the intentional, unauthorized access to stored electronic communications. The court ruled in favor of the plaintiff, awarding $303,040.00 in damages, attorney's fees and costs.

III. COPYRIGHT LIABILITY

There has been an ever-increasing volume of litigation concerning use of the Internet to perpetrate copyright violations. In Playboy Enterprises Inc. v. Frena, 839 F.Supp 1552 (M.D.Fla. 1993), a subscriber uploaded pictures from Playboy Magazine onto an Internet bulletin board service. Playboy had a copyright on the pictures. Although there was no evidence the bulletin board operator had uploaded the photographs, or even knew the photographs had been posted on the bulletin board, the court held that the operator of the bulletin board had contributed to copyright infringement due

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to its failure to monitor bulletin board activities, which resulted in the "distribution" of the photographs to subscribers who could, then, download them. Similarly, in Sega Enterprises Ltd. v. Maphia, 859 F.Supp 679 (M.D.Cal. 1994), Sega sued a bulletin board operator for the unauthorized uploading and downloading of Sega's computer game software by subscribers to the bulletin board service. Although the operator of the bulletin board did not actually post the computer games to the bulletin board, the operator did encourage its subscribers to do so. The court upheld a preliminary injunction against the bulletin board operator on the basis of contributory infringement.

The lesson to be learned from the Playboy and Sega cases is that bulletin board operators will be liable when their subscribers upload infringing information to the bulletin board. Thus, if a library allows its patrons or employees to operate a bulletin board or Web page on the Internet, the library must take great care to avoid using copyrighted material, particularly because liability can be imposed regardless of actual knowledge of the infringing activity.

This lesson is brought home by the recent decision in Religious Technology Center v. Netcom On-Line Communications Services Inc., (presently pending on appeal in the Federal District Court in California). In this case, a former member of the Church of Scientology, who has become a critic of the church, began posting Scientology's secret religious texts to news groups through the Internet. Because these materials are copyrighted by the plaintiff, the former minister is now a defendant in the case. In addition, the plaintiff demanded that the operator of the Internet bulletin board service stop the former minister from posting infringing articles on the bulletin board. When the bulletin board operator asked the plaintiff for proof that they owned the copyright in the materials being posted, the bulletin board operator was also made a defendant together with Netcom On-Line Communications, one of the nation's largest Internet service providers, which provided access to the bulletin board service. The federal judge exonerated Netcom On-Line Communications from direct liability, but the court indicated it could be vicariously liable as a contributory infringer together with the operator of the bulletin board service, where the defendant "with knowledge of the infringing activity induces, causes or materially contributes to the infringing conduct of another."

Some cases hold that an Internet conduit provider may still be vicariously liable for copyright infringement even without knowledge. In Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2nd Cir 1963), the court held that a vicarious infringer is one who has the right and ability to control the actions of the actual infringer, and who receives a direct financial benefit from the infringement. It seems clear that libraries do not receive any direct financial benefit from providing Internet access to students or faculty, thereby foreclosing this aspect of vicarious copyright liability.

As with issues of Internet privacy and cyberporn, there are federal studies and legislation currently pending, which would spell out in more detail the rules that libraries need to follow to avoid liability in this area.

A 1993 federal study contained a number of proposals, including an amendment to the copyright law to clarify that digital transmissions are "distributions" of copies to the public, and a proposal to ban computer devices and services aimed at by-passing technological protection for copyrighted works, such as decoders and password breakers. A further suggestion would prohibit the practice of attaching copyrighted documents to otherwise valid Internet transmissions. Critics of this report claim it is biased toward today's copyright holders and the proposals would inhibit the development of new communications technology.

The laws governing Internet use are clearly in the formative process. Until legislatures and courts address the issues involved in this new communication technology, we can only look to the laws presently governing similar issues. As the number of Internet users increases, we can expect to see a response by both legislatures and courts.

This article is the third part of a three-part series dealing with the Internet.

* Scott F. Uhler is a partner and Philippe R. Weiss is an associate with the firm of Klein, Thorpe and Jenkins, Ltd. with offices in Oriand Park and Chicago. KT&J represents numerous library districts, local libraries, and other local government clients.

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