In addition to Cyber Squatters (CSQs) hijacking trademarks, personal names, and other intellectual property, lawsuits involving libel, defamation, and product liability are creating legal quagmires for Internet users. Consider a case involving Dow Jones and an Australian industrialist over an allegedly defamatory article that appeared on a U.S – based Dow Jones Web sites. The plaintiff sued Dow Jones, the Web site owner, as the author of the article. Dow Jones argued that the suit should be tried in a New Jersey court, where its servers, the point of publication, are located. The Australian argued that the suit should be brought to Australia because that is where his reputation had been damaged. Australian law favors plaintiffs, whereas in the United States First Amendment rights demand a high burden of proof in libel cases. Australian courts sided with the plaintiff.
It is easy to imagine many situations where the actions of companies or information posted on a site can lead to lawsuit when internet content is lawful in one country but not in the host country. For example, an American studio that makes a movie with nude scenes could be prosecuted in a country that bans nudity in movies. Not only would the movie studio be libel, but the Internet service provider could be liable for material posted on its Web site. Writers and publishers could face libel suits in countries with laws restrictive of free speech where weak or nonexistent free speech protections are tool to intimate and censor. Internet publishers or individual Web site owners fear they can be sue for defamation from any or many jurisdictions, merely because their articles can be downloaded anywhere in the World. Lawsuits involving libel, defamation, and product liability cause companies to voluntarily restrict their Web sites to selected countries rather than leave themselves open to legal action. The Internet is not a libel free zone.
The United States has taken a giant step in dealing with domain names pirates by passing the Anti Cyber Squatting Consumer Protection Act (ACPA) and the World Intellectual Property Organization (WIPO) established a structure through the Internet Corporation for Assigned Names and Numbers (ICANN) in which anyone registering a domain name with complying registries must agree to dispute resolution. This is known as the Uniform Dispute Resolution Policy (UDRP). Neither the ACPA nor the UDPR provides all safe ways of recovering a domain name once it has been cyber squatted.
A study indicated that protection is needed for geographical names, ethnic groups, and pharmaceutical substances, all of which have been appropriated by CSQs. These abuses will continue unless preventive steps are taken. Agencies like the Artists Coalition against Piracy (ACAP), DRS and WIPO are useful, but besides being costly the only address disputes involving sites using names that are trademarked and have commercial value or are so well known they have common law trademark rights. Even though protection from cyber squatters is not perfect, if a business has taken steps to properly defend its brand names, trade names, or product names and properly registers them, it greatly enhances its ability to defend against improper use of the name by a third party. Countries that recognize intellectual property will generally refer to those laws to resolve disputes.
Most country’s courts are inclined to assert jurisdiction over online activity, where originates, so long as harm is experienced locally and the sense is that the party responsible either knew or ought to have known that the harm was a likely consequence of its actions. Most agree, though, that laws that are expressly designed to apply not just in a single country but worldwide are necessary to untangle the legal hassles that are occurring.
Of 100 business leaders polled by the International Chamber of Commerce, more than one third said legal uncertainty covering Internet operations affected significant decisions. The most immediate impact, according to the ICC, is clear: many online merchants refuse to sell outside their home countries.