i-News
The rapid growth and expansion of e-commerce and technology based
industries is accompanied by a fast changing legal background. New
rules, regulations and cases have established a global approach to
the technology law. Anyone in business needs to be aware of these rules
and how they can best be used to ensure your business success. i-News
is a regular update on developments in this area.
Your Website – Exposure To Foreign Courts and Laws
The use of the internet for business continues to increase, and there
is no doubt that websites can be a great tool for business. But a recent
decision by Australia's highest court provides a salutary reminder
of the risks of maintaining an on-line presence.
Publication of Defamatory or Misleading Statements occurs with
Downloading
The case was brought in Victoria, Australia by Joseph Gutnick, a
prominent Australian businessman. He sued Dow Jones, the publisher
of the Wall Street Journal and Barrons Online magazine. He complained
that an article in Barrons implied that he was 'masquerading' as a
reputable citizen when he had laundered large amounts of money through
a gaoled money launderer and tax-evader, and bought his silence.
The magazine was put on-line and placed on Dow Jones' website in
New Jersey. The website had 50,000 subscribers including at least 1,700
in Australia, several hundred of which were from Victoria. Subscribers
could download the article by using an entry password and by agreeing
to pay Dow Jones for an on-line copy of the magazine.
Dow Jones tried to get the proceedings thrown out of the Australian
Courts, claiming that the on-line article was not published in Victoria,
where it was downloaded, but in New Jersey where it was uploaded. They
argued that any defamation took place in New Jersey, and America was
the only country where they could be sued.
Both the Victorian Supreme Court and the Australian High Court disagreed.
They dismissed Dow Jones' argument that there should be special rules
on where publication on the internet occurs, to avoid the risk that
internet publishers could be sued the world over.
The High Court said that by publishing information on the internet,
Dow Jones knew it would have far-reaching effects. They therefore had
to accept the risk of being called to account for such effects, even
on the other side of the world.
Implications for your Business
Your business needs to take steps to reduce the risk of being sued
overseas, as well as in New Zealand, as a result of your on-line activity.
Here are some basic guidelines:
- Comply with your obligations under New Zealand law. For example,
take steps to ensure that anything you publish on your website is
not defamatory of anyone, whether or not they are resident in New
Zealand. Ensure that you do not make statements or representations
which could be construed as misleading or deceptive by anyone, including
foreigners who might not know the background.
- If your internet activities are targeted at any foreign countries,
get a lawyer there to advise you on whether your activities comply
with their laws.
- Check overseas to see that your trade names have not been registered
there and avoid well known trade names even if they are not used
in New Zealand.
- Consider registering your trade names in overseas markets.
- Ensure that your customers agree to your terms of sale. These
should include a term that New Zealand law applies to the contract
and any dispute must be heard by the New Zealand courts.
- Consider restricting access to your site, or online sales, to residents
of certain countries or states.
Conclusion
You must remember that the internet is global. Whatever you do via
the internet has the potential to be read by and affect people throughout
the world.
Border Protection
The recent television programme Border Patrol highlights the work
done by the New Zealand Customs Service in patrolling and protecting
our borders against unwanted pests and substances. However, many of
you will not be aware that the Customs Service can also act as your
eyes-and-ears in policing against the importation of unauthorised or
counterfeit copies of your copyright or trademarked goods.
If you are a copyright or trade mark owner and have legitimate concerns
about a competitor importing counterfeit or unauthorised copies of
your goods, then you can file a notice with the Customs Service requesting
the detention of any goods that may infringe your rights. It is worth
consulting a lawyer before filing a notice to ensure that the procedures
are followed and that the notice achieves what you intend. The Customs
Services will require a bond to cover any costs it may incur, but this
will be worth its weight in gold if a shipment of counterfeit goods
is uncovered! If the bond is not used, it will be refunded once the
notice is withdrawn.
Once the notice is in place, the Customs Service will detain any
goods that may contravene the notice. An investigation is then carried
out and the importer is given the opportunity to either voluntarily
forfeit the goods or to submit to the determination of the Customs
Service. Often, importers of counterfeit goods will realise they have
been caught "red-handed"
and will forfeit the goods or be quick to enter into settlement negotiations.
If the goods are not voluntarily forfeited, the Customs Service will
issue a notice of determination. You will then have 10 days from the
date of the notice within which to file court proceedings against the
importer, so you must act quickly. We suggest therefore that you take
the notice straight to your lawyer to discuss your options. This might
include applying to the court for an order that the counterfeit goods
be destroyed or for an award of damages. If the importation is on a
small scale, it may not be economic to bring court proceedings but
that would be your decision, and by then you will be aware of the infringing
imports and be in a position to negotiate with the importer. The only
hook is that if you do not file court proceedings within the time limit,
the goods will be released to the importer.
For more information, please contact:
John Ferner
Partner
t: +64 9 979 2153
m: +64 21 901 498
el: John Ferner
Last updated: June 2003
These articles are intended to be brief in nature and should be used for information only. They should not be relied on as legal advice. |
