Cybersmear: The Internet versus your company’s reputation

Brad Hanna — a partner at Toronto law firm McMillan Binch LLP — had a client with a problem. A prospect had interviewed for a position with the telecom company. When he didn’t get the job, he decided to get even.

“”He registered a domain name with my client’s name,”” the lawyer recalls. “”He pre-empted

it — my client had not registered the domain name.”” There were no modifiers like “”sucks”” or ‘I hate.’ Hanna contacted the disgruntled job-seeker, who agreed to hand over the domain name. After the client had placed ads in several large circulation magazines with the domain name, though, he reneged — and linked the URL to kiddie porn sites.

Hanna sued the miscreant under the Uniform Domain Name Dispute Resolution Policy. An arbitrator, the World Intellectual Property Organization — WIPO, for short — took a few months before deciding in favour of Hanna’s client. A relief order shifted the domain name to the company. But no damages were awarded — that doesn’t fall under the WIPO mandate —even though the smutmonger of this piece had asked for as much as $35,000 (US) to transfer the domain.

Hanna’s case shows how vital it is for companies to monitor their names, trademarks and other intellectual property on the Web. Uncounted and perhaps uncountable bulletin boards, blogs, sites, and chat rooms can trash corporate reputations in front of an audience of millions. On the Internet, anyone can produce anti-corporate content with a potentially huge reach, once the purview of newspaper and magazine editorial boards.

What’s a business to do when it falls victim to a cybersmear campaign?

Scott Erickson is an associated professor of marketing at Ithaca College in New York. An authority on intellectual property, he says that in Web wars, the bad guys have a lot of weapons.

“”The situation is worse than it used to be,”” Erickson says.

“”Companies have always had to deal with bad word-of-mouth, but on the Web, it’s possible to tell something to millions at the press of a button. The potential is there for a lot of damage.””

Companies that value their good names need to take a careful view of what is said about them. Erickson suggests that the issue of finding out what is said is managerial, not technical. Still, by using search engines and bots, checking bulletin boards and roaming chat rooms, companies can monitor how they are spoken of.

Within a company, there should be someone, perhaps the chief information officer, appointed to organize what amounts to Web discipline, Erickson suggests.

Protecting the good name of a company begins with registering a suitable domain name.

Many companies, anticipating that others may try to pre-empt the name or vary it in a pejorative fashion, register hundreds of variations. But there is a limit to creativity.

“”If a site is so obscure that you can’t find it, the public probably can’t find it either,”” Erickson says. Still, there is good sense in monitoring the roots of the company or person’s name and checking bulletin boards, which, says Erickson, are virtual focus groups.

What a company has to watch for is more than just the digital version of bathroom scrawl, Erickson says.

“”If a site reveals trade secrets, such as when the company will have major discounts on merchandise, it can lose money.”” The company can take action in court, Erickson notes.

A company being slagged online can set up its own links to its sites to tell its side of the story, Erickson says.

“”Everybody is equal on the Web,”” he says. “”It’s important to be there with the critics and to put your case to people who may believe everything they read.””

Companies go to their lawyers to file defamation cases and other actions when other courses have failed.

But in spite of the unknown numbers of threatening letters that may be sent, actual defamation cases or more esoteric trademark cases are rare.

Few defamation cases get to trial. According to William McDowell, a partner in the defamation and public law area at Toronto firm McCarthy Tétrault LLP, there are about 500 suits for defamation filed in Toronto every year, of which just 25 may move to trial. The very threat of prosecution is a deterrent for responsible people, he suggests.

For the irresponsible, for the indigent who have nothing to lose, and for those who live and work in jurisdictions far from Canada, the prospect of being sued may be no threat at all.

For some people, a lawsuit can even be a forum to express themselves.

The moral of all this — choose your defendants carefully lest the case turn out to be a Pandora’s box.

Nothing illustrates the problem better than the famous “”McLibel”” trial in which a McDonald’s sued two impoverished activists for distributing a pamphlet in the U.K. others had written.

The pamphlet said defamatory things about the company, its labour relations, and its standards for handling animals destined for its buns.

McDonald’s was offended, anxious that the pamphlets would do it harm. The company sued and sustained a huge amount of bad publicity during a seven-year trial, spent $16 million (US) in legal fees, and wound up with an uncollectible judgment of $68,000 (US) against the indigent defendants. The defendants had promised, if the case went against them, to take the case to the European Court of Human Rights. One must be very careful of whom one sues.

The sensible thing for the reader of cybersmears to do is to take them with a grain of salt, McDowell suggests.

“”If there is an anonymous posting and there is no reason to think that information comes with an inside track, it is just graffiti. If you go to trial, you put your character at issue,”” McDowell says.

Sometimes companies just have to stand up for what they believe in. That’s the view of Stuart Biegel, a member of the law faculty at UCLA and author of Beyond Our Control? Confronting the Limits of Our Legal System in the Age of Cyberspace (MIT, 2001). He compares cybersmears to the McCarthyism of the 1940s and 1950s. Cybersmear camapaigns today are not unlike press reports that printed Senator Joseph McCarthy’s wild and wide-ranging accusations of communism in Hollywood, government and the U.S. military. McCarthy — and a press Prof. Biegel chastises as uncritical printers of rumour — ruined careers and shattered lives.

But suing a Web site, which could be in a foreign country, is a lot different from suing a newspaper with a fixed and known location, Hanna admits.

“”On the Internet, you can defame someone anonymously. The difficulty for a plaintiff is to find out who defamed him,”” says Hanna.

“”You may be able to trace the defamer. You can identify the computer from which a posting was made. But if the bulletin board service will not disclose the identify of the person who did the posting, you need a court order to get beyond the IP address.

“”And then you may only have a computer in an office. Then comes the question of who was at the machine at 3:53 p.m. on a certain day. You may be able to prove the defamation, but not find who uttered it.””

Cost can also be an issue. Don Douglas, a partner in Winnipeg law firm Thompson Dorfman Sweatman LLP, notes that a defamation case can cost the plaintiff $50,000 to $100,000. On top of that, there is the risk that the plaintiff can come out of it looking preposterous.

“”Is the case worth the adverse publicity it may bring?”” he asks.

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