By Richard Stobbe

In the midst of a challenging period for a condominium owners association in a property located in Costa Rica, the president of the association resigned in frustration. Someone had overheard a rumour that the president resigned because he had been accused of theft. This rumour was false and when it was repeated by email – an email sent by means of the trusty ‘reply-all’ feature – all 37 condo owners were copied with the defamatory rumours.

An Ontario court recently rendered a decision in this email defamation case (McNairn v Murphy, 2017 ONSC 1678 (CanLII)), noting that the defamation occurred in ‘cyberspace’: “Communications via the Internet such as email, are potentially more pervasive than other forms of communication since control over its distribution is lost in numerous people may have access to it [and an] email containing a defamatory statement may be sent by [a] recipient to others who in turn may send it to an even larger audience. The Internet has the extraordinary capacity to replicate a defamatory statement, in [its] sleep. As a result, the mode in extent of publication, is [a] particularly significant consideration in assessing general damages [in]Internet defamation cases.”

In awarding damages of $160,000 against two defendants, the court noted that damages in defamation cases are assumed if publication of defamatory statements is evidenced, assuming there are no defences. The defamed individual need not show any specific loss. General damages in defamation cases can serve three functions:

(a) to console the plaintiff for the distress suffered in the publication of the defence;

(b) to repair the harm to the plaintiff’s reputation including, where relevant, business reputation; and

(c) to vindicate the plaintiff’s reputation.

The court applied the following six factors in determining general damages in defamation cases:

1. the plaintiff’s position and standing;

2. the nature and seriousness of the defamatory statements;

3. the mode or type of publication;

4. the absence or refusal to retract or apologize for the statements;

5. the conduct and motive of the defendant; and

6. the presence of aggravating or mitigating circumstances.

Defamation by means of mouse click is easy to do.

And, it should be noted, it’s not that difficult to make a full retraction and apology by the click of a mouse, particularly in a small community of 37 individuals. From the facts available in this case, an unreserved retraction and sincere apology may have been worth $160,000.

Calgary – 07:00 MT

By Richard Stobbe

A patent owner notices that knock-off products are listed for sale on eBay. The knock-offs appear to infringe his patent. When eBay refuses to remove the allegedly infringing articles. The patent owner sues eBay for patent infringement, claiming that eBay is infringing the patent merely by hosting the listings, since listing the infringing articles amounts to an infringing “sale” or an infringing “offer to sell” the patented invention.

These are the facts faced by a U.S. court in Blazer v. eBay Inc. which decided that merely listing the articles for sale does not constitute patent infringement by means of an infringing sale, where it’s clear that the articles are not owned by eBay and are not directly sold by eBay.  In fact,  in the eBay model the seller makes a sale directly to the buyer – eBay can be characterized as a platform for hosting third party listings, rather than a seller.  

Some interesting points arise from this decision:

• Prior patent infringement cases involving Amazon and Alibaba have suggested that the court will look closely at how the items are listed. For example, in those earlier cases, the court noted the use of the term “supplier” to describe the party selling the item, whereas the word “seller” is used in the eBay model. The term “supplier” might be taken to mean that the listing party is merely supplying the item to the platform provider, such as Amazon or Alibaba, who then sells to the end-buyer. Whereas the term “seller” identifies that the listing party is entering into a separate transaction with the end-buyer, leaving the platform provider out of that buy-sell transaction.
• The court in Blazer was clear that it will look at the entire context of the exchange to determine not only if an offer is being made, but who is making the offer.
• The “Terms of Use” or “Terms of Service” will be scrutinized by the court to help with this determination. The eBay terms explicitly advise users that eBay is not making an offer through a listing, and eBay lacks title and possession of the items listed.

Related Reading: eBay Not Liable for Listing Infringing Products of Third-Party Sellers – Not an Offer to Sell by eBay

Calgary – 07:00 MT