[ga] "Publication Occurs Where Article Downloaded" -- Australian Judge

["Patrick Corliss" <patrick@quad.net.au>]

Turf wars: Internet defamation
By Jeremy Szwider  27 November 2001

http://www.zdnet.com.au/newstech/ebusiness/story/0,2000024981,20261845,00.htm

OPINION: The Victorian Supreme Court handed down a landmark ruling on 28
August 2001 [Joseph Gutnick v Dow Jones & Company Inc. [2001] VSC 305] on the
contentious topic of jurisdiction on the Internet.

In response to an application to stop a defamation claim being heard in
Victoria, Justice Hedigan held that the "publication" of an online article
occurred in the jurisdiction where the article was downloaded, regardless of
where it was uploaded or where the publisher's server resided.

The global media giant Dow Jones, published an article entitled Unholy
Gains--which Gutnick claims defamed him--in a paper-based and an Internet
form--in its weekly financial journal, Barron's. The online version of the
article was uploaded via Dow Jones' Web server which resides in New Jersey.

Over 300,000 copies of the relevant edition of the magazine were
distributed--98 percent of which were sold in the United States. The magazine
had five subscribers in Victoria, including stockbrokers JB Were and two of
the large Australian investment institutions, AXA and AMP.

But it was not possible to establish how many Victorians downloaded the story
from the Internet. The site recorded about 550,000 hits, less than 0.01
percent of them from people with Australian credit cards. It was not
ascertainable how many of these users were Victorian but it was agreed that
"several hundred" downloads had taken place in Victoria.

Before the defamation action could be tried in court, the significant issue
was which jurisdiction would be the relevant forum. This was a major obstacle
for Gutnick as defamation is easier to prove in Australia than it is to prove
in the United States, where the First Amendment of the US Constitution
guarantees freedom of speech. It would also be less costly than briefing his
lawyers to attend proceedings in the United States.

Subscribers downloaded and paid for the article through a Victorian Web
browser and the meaning of the article was conveyed to the reader in Victoria.
For these reasons, Gutnick succeeded in establishing that Victoria was the
relevant jurisdiction. The Victorian Supreme Court will now hear the
defamation case, subject to any appeal on the jurisdiction issue by Dow Jones.

This ruling follows international precedents relating to Internet defamation
cases. It also follows traditional common law principles of defamation
established over several centuries and adapts it to the new Internet age. The
judgement follows the path of legal principles that have been able to adapt to
new technologies over the years, such as television, telex, fax, radio, and
now the Internet and e-mail.

This case is important for all Internet publishers and e-mail users as they
may need be answerable to the laws of overseas countries where the information
is downloaded. As the Internet has a worldwide reach, foreigners uploading
information to the Internet or sending e-mails to Australians need to be aware
of Australian laws.

The laws relating to cyberspace are still in their infancy and a landmark
ruling such as the Gutnick case is likely to be strongly considered in a
multitude of jurisdictions worldwide. Internet publishers will need to be
aware of the laws of all other countries that follow this path.

International publishers and media networks may consider restricting access to
their Web sites to certain foreigners to avoid unwanted defamation actions.
This is a strong public policy consideration that should be factored into this
ongoing defamation-jurisdiction debate, particularly as the nucleus of the
Internet revolves around the free flow of information around the world.

Jeremy Szwider is a solicitor at Phillips Fox. He can be contacted at
jeremy.szwider@phillipsfox.com or on 03 9274 5233.


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