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Through the use of pseudonyms, many people chat online anonymously and freely discuss a wide variety of topics on Internet message boards. In certain instances, companies and individuals who believe that some of this online speech is false and defamatory, file lawsuits seeking damages for the harm supposedly done to their reputations. These lawsuits seek the identities of the anonymous persons who made the allegedly defamatory statements. An appellate court in New Jersey, in the case Dendrite International, Inc. v. John Doe No. 3, has enunciated a four-step series of guidelines that must be satisfied before “identity unmasking” can occur in this context. While the protection of freedom of speech is a laudable goal, in some respects the burdens imposed by these guidelines go a bit too far. THE ‘DENDRITE’ CASE Dendrite International, Inc. is a New Jersey corporation that provides product and service offerings for pharmaceutical and package goods industries. Dendrite filed suit with respect to certain allegedly defamatory comments made about the company on a Yahoo bulletin board by an anonymous person referred to as John Doe No. 3. Dendrite filed an appeal when the trial court denied its request to conduct legal discovery to ascertain the true identity of John Doe No. 3. Before reaching its ultimate holding, the Appellate Division of the New Jersey Superior Court examined the particular comments at issue in the case. The comments were contained on a Yahoo bulletin board specifically devoted to Dendrite. This bulletin board hosts exchanges of messages and comments about issues related to the company’s stock performance. During a several month period during the first part of 2000, John Doe No. 3 posted various anonymous comments on this bulletin board under the pseudonym “xxplrr.” Some of these comments related to Dendrite’s revenue recognition accounting and stated that there had been a change in this accounting by Dendrite’s president to boost his earnings. Another comment stated that Dendrite “does not appear to be competitively moving forward” and that the company’s president “knows it and is shopping hard.” Dendrite maintains that these comments are false, as Dendrite did not change its revenue recognition accounting and because Dendrite was not in trouble and was not seeking to sell the company. Dendrite argues that these comments damaged its reputation and otherwise caused it harm. NEW JERSEY COURT ARTICULATES NEW GUIDELINES Rather than simply decide whether revealing the identity of John Doe No. 3 was appropriate in the case before it, the appellate court went much further and offered “guidelines to trial courts when faced with an application by a plaintiff for … discovery seeking an order compelling … the identity of anonymous Internet posters who are sued for allegedly violating the rights of individuals, corporations or businesses.” According to the appellate court, a trial court should utilize these guidelines in “striking a balance between the well-established First Amendment right to speak anonymously, and the right of the plaintiff to protect its proprietary interests and reputation through the assertion of recognizable claims based on the actionable conduct of the anonymous, fictitiously-named defendants.” The guidelines first require the plaintiff to attempt to notify anonymous posters (including notification on the relevant Internet message board) that they are the subject of discovery and to afford a reasonable opportunity to oppose the request for identity disclosure. The guidelines next require the plaintiff to identify and set forth the exact statements made by the anonymous poster that the plaintiff alleges constitute actionable speech. After that, the guidelines require the trial court to determine whether the plaintiff has established a prima facie case against the anonymous defendant; namely, the plaintiff must adequately state a legal claim and must provide sufficient evidence supporting each element of its claim. Finally, if the plaintiff has established its prima facie case, then the trial court “must balance the defendant’s First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure of the anonymous defendant’s identity to allow the plaintiff to properly proceed.” No question, the guidelines require a significant and serious showing before the true identity of someone who operates online under a pseudonym can be unmasked. ELEMENT OF HARM NOT SATISFIED The appellate court ruled under the guidelines that Dendrite was not entitled to find out the real identity of John Doe No. 3. The appellate court reached this result because in its view Dendrite did not establish that it had been harmed by John Doe No. 3′s online comments, and harm is a necessary element of Dendrite’s defamation cause of action. Dendrite had asserted that John Doe No. 3′s comments harmed the value of its stock. The appellate court disagreed. As to the period following the posting of the comments, Dendrite experienced losses on 40 days, gains on 32 days, and no change on two days, with a total loss of 29/32 of a point during this period. Yet, while Dendrite’s stock value was relatively stable during this period, it is possible that the stock would have done better had the negative comments by John Doe No. 3 had not been made, and perhaps the appellate court should not have cut off Dendrite’s right to pursue its case against John Doe No. 3 without further consideration. PROTECTING ANONYMITY AT WHAT COST? Certainly, freedom of speech and freedom of online anonymous speech deserve protection. Valid criticism of corporate and other practices should be free from unfair intimidation, and in many respects, anonymity can ensure that freedom. Still, much harm can result from false statements that now can reach thousands and millions of people on the Internet. Erecting barriers that are too steep to allow discovery of the identity of persons who post defamatory comments about others may lead to freedom of defamation, not true freedom of speech. Generally speaking, when initiating litigation, a plaintiff does not need to prove up his or her case in advance. Yet, the guidelines practically require that. Plus, truth is an absolute defense in defamation cases. Thus, if someone posts comments on an Internet bulletin board, and if the comments are true, there will be no liability even if his or her identity is revealed. While the guidelines are a step in the right direction in terms of requiring a plaintiff to provide notice to the anonymous author of the comments and to set forth exactly the comments at issue, the other requirements may go too far. And even with all of the guidelines in place, online privacy unfortunately can be breached in many ways. Thus, in an abundance of caution, people should assume that their online comments will be attributed specifically to them. In short, one should not make statements on Internet bulletin boards, in e-mails and the like that he or she is not willing to individually own. Eric J. Sinrod is a partner in the San Francisco office of Duane Morris, where he focuses on technology and litigation matters. His Web site is sinrodlaw.com and his firm’s site is Duane Morris.Mr. Sinrod may be reached by e-mail at [email protected]

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