A disgruntled ex-employee registers the dot-com version of the employer’s dot-ca domain name.  Then, just before leaving on vacation out of the country, the ex-employee directs the dot-com domain name to a gay porn site.  The employer sues for damages.

In a recent judgement (Inform Cycle Ltd. v. Draper, 2008 ABQB 369), the Court has awarded damages against the ex-employee for passing-off and defamation, to the tune of $15,000.00.  The case is interesting for a few reasons: first, it is one of the few decisions dealing with both online corporate defamation (defamation of business reputation on the internet) and domain name issues.  And it is interesting for the summary way in which the Court concluded that damages were appropriate.

In the B.C. case of Crookes v. Yahoo, the Court disposed of an online defamation claim by reasoning that there was no evidence that the alleged defamatory material was accessed by someone in B.C.  “Publication is an essential element for an action in defamation,” said the judge. “In this case … [t]here is no evidence anyone read the material in British Columbia.”

Contrast that with the analysis in the Inform Cycle case: “There is no record of the number of people who were forwarded to the gay pornographic website…the people referred to the ‘.com’ site over that 16 day period were people who had made an error by choosing ‘.com’ instead of ‘.ca’. We do not know how many people made that error. We do not know how many actually thought that the referral to the porn site was deliberate rather than a computer or internet glitch. We do not know if anyone, or how many, actually believed that Inform was involved in the porn site or business.” (emphasis added) Despite those apparent gaps in the evidence, the Court had no problem concluding that defamation had occurred, and that damages were appropriate.  The difference might be explained (at least partly) by the fact that the alleged defamatory comments in the Crookes case were made in a members-only discussion forum. It’s likely that the nature of the site where the domain name was directed also has something to do with it.  It is clear that further clarity on these issues is required.

Calgary – 15:30 MST