 In Solers, Inc. v. Doe, 2009 WL 2460862 (D.C. 2009), Solers, Inc. (“Solers”) filed an action against “John Doe” defendant, alleging defamation and tortious interference with prospective advantageous business opportunities based on a report to the SIIA alleging that Solers was using unlicensed software. Solers served a subpoena on the SIIA to learn the informant’s identity. The Superior Court granted SIIA’s motion to quash the subpoena and dismissed the action for failure to state a claim. However, on appeal the District of Columbia Court of Appeals vacated the order and remanded the case to the Superior Court, holding, among other things, that a court should apply a five-step test when presented with a motion in a defamation action to quash or to enforce a subpoena which seeks the identity of a defendant who speaks anonymously over the Internet. This decision represents a significant development for businesses accused of copyright infringement based on reports of informants to software trade associations regarding alleged software copyright infringement. At least one court now recognizes the necessity, in some cases, of permitting businesses to learn the identity of a confidential informant in a trade association software audit.
The case began in May of 2005 when Solers filed a complaint against “John Doe” alleging one count of defamation and one count of tortious interference with prospective advantageous business opportunities. The complaint requested injunctive relief, compensatory damages, and punitive damages. Solers then issued a subpoena to SIIA seeking production of all documents related to the identity of Doe, Doe's initial report and his ensuing correspondence with SIIA, and all documents believed to be “evidence” of Solers' alleged copyright infringement. SIIA, which is not a party to the underlying suit, filed objections to the subpoena, and, in response, Solers moved to enforce the subpoena. SIIA then filed a motion to quash. The Superior Court asked Solers to demonstrate financial or economic harm so that it could withstand a motion to dismiss on its claim of defamation. Solers was unable to identify any financial or economic harm at that time without the informant’s identity and the content of the informant’s report. The court dismissed the suit in its entirety for failure to state a claim upon which relief can be granted. On appeal, the court established that speech on the Internet must be protected as any other speech but that such protection is limited. The right to speak anonymously, on the Internet or otherwise, is not absolute and does not protect speech that otherwise would be unprotected. Tests from other jurisdictions evaluating free speech rights in Internet defamation claims did not satisfy the court’s desire to fairly evaluate Solers’ interest in pursuing its defamation claim, SIIA’s interest in protecting Doe’s identity and, more generally, free speech rights for Internet communication. The court opted instead to develop a hybrid tests based on tests from other jurisdictions faced with the same issue. When presented with a motion to quash (or to enforce) a subpoena seeking the identity of an anonymous defendant, the D.C. Court of Appeals stated that a court should: (1) Ensure that the plaintiff has adequately pleaded the elements of the defamation claim, (2) Require reasonable efforts to notify the anonymous defendant that the complaint has been filed and the subpoena has been served, (3) Delay further action for a reasonable time to allow the defendant an opportunity to file a motion to quash, (4) Require the plaintiff to proffer evidence creating a genuine issue of material fact on each element of the claim that is within its control, and (5) Determine that the information sought is important to enable the plaintiff to proceed with his lawsuit. The court’s test does not require a separate balancing test at the end of the analysis, nor does it require a showing that the plaintiff has exhausted alternative sources for learning the information. SIIA argued the court’s test would have a chilling effect on informant reports and that such speech would disappear. The court dismissed SIIA’s claims as hyperbole and stated that the test takes SIIA’s concerns into account. The court determined that Solers need not demonstrate entitlement to judgment in its favor at this stage in the proceedings. Rather, Solers merely must show that it has a viable claim of defamation. In other words, Solers must show that there is a genuine issue of material fact on each element of the claim that does not depend on knowledge of the defendant's identity. The court vacated the judgment of the Superior Court and remanded the case to give Solers an opportunity to present evidence supporting its claim of defamation. This case, though not a carte blanche for businesses seeking to obtain the identity of informants who reported the business to the SIIA, BSA, or other software auditors, may prove helpful in recovering damages against informants who breached employment or confidentiality agreements signed with the business. Alternatively, as in Solers’ case, business may elect to file defamation or interference with contract claims against the informants. If you have been contacted by a software trade association alleging that your business engaged in copyright infringement, you should contact counsel experienced both in resolving software audit matters and pursuing other forms of relief to which you may be entitled. |