Go Ahead and Spout Off on the Web. But It Can Cost You
When companies sue critics, they win even when they lose
A group of bicycle enthusiasts stages a lively annual demonstration at the Chicago Auto Show—all those cars, all that pollution—and this year the cyclists added another front to their protest: the Web. Their parody site, autoshowshutdown.org, aimed to boost public awareness of global warming, traffic fatalities, and other auto-induced ills.
But days after the February event, the activists received a strong E-mail from a lawyer for the Chicago Automobile Trade Association claiming that the website violated the organization's trademark. It ordered the bikers to take it down or face legal consequences. The bikers' lawyers fired off a response: The First Amendment was on their side. That ended the matter. "I guess we called their bluff," says Daniel Korn, an organizer.
Online critics have turned to the Web to blast everything from pet food supply companies to Jerry Falwell to Wal-Mart. Like the bike group, they have often found themselves in legal battles with the companies they target. And though court rulings have tended to favor the critics, the very threat of such suits has shut down some sites, largely because defending them is so costly. The cases highlight the difficulty of defining the boundaries of free speech on the Internet, and they show that there are limits even for unknowing offenders.
Companies say that lawsuits, which usually allege trademark violations or defamation, are often the only way to protect their businesses from unfair accusations—particularly because Web-based critics can damage reputations worldwide. The threat of a lawsuit can also serve to inject responsibility into Internet discourse—especially important when anonymous attacks come from competitors. Golf equipment manufacturer Callaway Golf complained when an anonymous poster maligned the company in 2000 and urged people to sell Callaway stock. When Callaway discovered that the culprit was a competitor, it was able to secure a public apology without going forward with a suit. But consumer advocates say many companies file spurious lawsuits simply to intimidate critics, thus limiting consumer access to valuable information. And the suits can succeed only because the targets lack resources to fight them. In such cases, says Greg Beck, an attorney with Public Citizen, "There is no protection for Internet speakers who didn't do anything wrong."
Airline bashing. Judges have routinely upheld the legality of websites playing off a company's name, as long as they are not easily confused with the real ones. The sites get added protection if they have no commercial use. That's why, for instance, a site called alitaliasucks.com can legally continue to bash the big Italian airline. But it's a different story when money is involved. In 2004, a court denied an individual the right to raise funds for antiabortion causes on sites like MyCocaCola.com. Some courts have also protected Internet service providers from having to disclose the names of anonymous blog posters unless the company could immediately show sufficient damage. In a landmark 2001 case, a New Jersey appeals court ruled that Dendrite International, a pharmaceutical company, had to show at the outset of litigation what damages posters had caused. The court found that only two of the posters had made remarks explicit enough to require that they be identified; the other two were protected from legal action.
Companies are beginning to take note of these rulings, and some are holding their legal fire in favor of a quieter resolution. Says Joseph Berghammer, a professor of trademark law at Northwestern University: "While you might win the legal battle you may have lost the public relations one."
As for the critics' battles, they are not always easily won. Philip Smith, a South Carolina computer consultant, hired a local eBay drop-off, BidZirk, to help get rid of a backlog of computer parts. He alleges in court filings that the company sold the parts for half the "appraised eBay value," cutting his profit. He detailed his troubles in a blog entry called "You Gotta Be Berserk To Use An eBay Listing Company."
Within weeks BidZirk sued him for trademark infringement and defamation. Although he has won a number of motions over the past two years, he has spent hundreds of hours defending himself and lost income. In other words, he says, even if he wins, he's lost.
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