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To: Jeffrey S. Mitchell who wrote (1000)	7/12/2001 8:15:01 AM
From: Jeffrey S. Mitchell	Read Replies (4) \| Respond to of 12465

Re: 7/12/01 - [DRTE] NJ Daily Record: Dendrite loses appeal against online critic Dendrite loses appeal against online critic By Tim O'Reiley Daily Record In the first appellate decision defining confidentiality rights on the Internet, a state appeals court ruled Wednesday that a company must show that it has been damaged by an online critic before it can learn the person’s identity. The unanimous opinion, written by Judge Robert Fall, denied the attempt by Harding-based Dendrite International to force the Web portal Yahoo! to disclose the true name of "xxplrr." In spring 2000, a person using that online pseudonym had criticized some of Dendrite’s financial practices on a bulletin board about the company maintained by Yahoo!, which promises to keep its users’ real names secret. In the key point of the case, the three-judge panel ruled that Dendrite had not produced any hard evidence that the critic’s comments, though inaccurate, had harmed the company’s operations or stock price. Dendrite had argued for an easier threshold that would entail taking its attorneys’ statements of facts at face value. Even if a company can show damage, the court said, the damage must be weighed against the First Amendment right to anonymous free speech. This was part of a four-step procedure the court enunciated for deciding future Internet identity cases. In establishing the framework, the court relied heavily on a California case where the goal was to create a "flexible, non-technical, fact-sensitive mechanism for courts to use as a means of ensuring that (companies) do not … ascertain the identities of unknown defendants in order to harass, intimidate or silence (Internet) critics." Paul A. Levy, a Washington, D.C., attorney with the Ralph Nader group Public Citizen that had entered the case against Dendrite, said the ruling makes it "much harder for a company to learn an identity, but not impossible." "I think this case gets pretty close to the right balance," he said. Levy said this was the first appellate court in the country to decide the issue. But Steven B. Stein, an attorney for an online critic in a companion case brought by Morris Plains-based biotechnology company Immunomedics, found a serious flaw in the decision. The ruling put online critics in the "Catch 22" situation of having to disclose their identities to argue that they should remain anonymous. His client, identified only as "moonshine_fr," lost on appeal because of Immunomedics’ suspicions that she was an employee who had violated provisions in her contract prohibiting her from making public statements about the company. Stein said he would appeal to the New Jersey Supreme Court. "What the court didn’t provide was a mechanism to preserve someone’s anonymity," such as allowing a judge to review key evidence in the privacy of his chambers, he said. If Stein loses, Yahoo! would have to disclose "moonshine_fr’s" name. Dendrite and its attorneys did not comment on the ruling. Immunomedics and its counsel could not be reached for comment. The Dendrite case dates to August 1999, when company financial statements said revenues from its sales of software packages for the pharmaceutical industry might be booked more quickly than had happened with previous contracts. The company attributed this to the changing nature of its products. Some outsiders, however, interpreted this as a way of papering over weaknesses. In nine instances from March 14, 2000, to June 2, 2000, "xxplrr" posted comments on Yahoo!’s bulletin board for Dendrite, saying the company was in trouble and up for sale. Dendrite sued this person and several others for defamation, learning the identity of two on technical grounds but pursuing an appeal only against "xxplrr." In an opinion dated Nov. 23, Superior Court Judge Kenneth C. MacKenzie, sitting in Morristown, found no evidence that "xxplrr’s" statements had harmed Dendrite’s stock price or its ability to recruit people, as the company argued. On this basis, MacKenzie protected "xxplrr’s" identity and was upheld by the appeals court. Immunomedics, however, presented some evidence that "moonshine_fr" worked for the company when she made statements on a Yahoo bulletin board about alleged problems with the company’s European operations. Superior Court Judge Barbara Zucker-Zarett, also sitting in Morristown, granted Immunomedics’ motion to subpoena Yahoo! records when no evidence was presented to say "moonshine_fr" was not an employee. Instead of claiming defamation, Immunomedics said she broke the confidentiality promises in her employment contract. Tim O'Reiley can be reached at toreiley@morristo.gannett.com or (973) 428-6651. ©2000 Gannett Satellite Information Network Inc. dailyrecord.com