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No answers in Scientology case

Now that Netcom and the Church of Scientology have reached a settlement, analysts will have to wait for another case to establish a copyright precedent.

Many Internet legal analysts are disappointed by an out-of-court settlement between Netcom and the Church of Scientology because now they'll have to wait for another case to come to light before a court sets a firm precedent on Internet access providers' liability for online copyright infringement.

Netcom and the church announced an out-of-court settlement Sunday in a copyright infringement dispute dating from December that many expected to set a precedent for Internet service providers' liability.

The case involved church allegations that Netcom should be held liable for copyright infringement after former minister-turned-critic Dennis Erlich of Glendale, California, used Netcom-provided Internet access to post literature copyrighted by the church. Not only did Netcom protest that it wasn't responsible for Erlich's alleged copyright infringement, but it also refused a request from the church to remove the material while the case was in dispute.

On February 8, 1995, U.S. District Judge Ronald Whyte found no direct liability against Netcom for Elrich's actions, ruling that an ISP can't reasonably monitor all the content that passes over its network. But he issued a temporary restraining order against Netcom and Elrich to stop posting church materials in violation of the church's copyrights. The complaint that Netcom acted irresponsibly by not deliberately removing the contentious material was still outstanding until Sunday.

If the case had resumed, the judge could have held Netcom responsible for failing to remove the documents once they were informed of the suit. Helena Kobrin, an attorney for the church, said the company is pleased with the settlement but refused to comment further. So legal observers are in the dark about whether a court would have decided that Netcom should have removed the material when the church first complained.

"This is definitely a plus for Netcom depending on how much they settled on, but this decision means that the issue will continue to be unresolved until we have a case that goes all the way through," said Patricia Gima, an intellectual property attorney who specializes in online law. "But you better believe there will be an appeal when it happens so it will be a while before anything is set in stone."

Lee Gesmer, a partner with Lucash, Gesmer & Updegrove, said the private settlement of the case leaves a message to other ISPs that the reasonable course is to investigate the litigant's claims rather than ignore them. "The message to ISPs is to take immediate and reasonable steps to determine whether there is a valid claim," Gesmer said. "Netcom didn't do that here. Had this case gone to trial, the issue for the jury would have been did Netcom act reasonably."

That question is now left open; most agree that there will surely be such a case sooner or later, involving attacks not only on users but also on providers for copyright infringement, libel, or other claims. "The ISP has the money so they are the target," said Gima.

When the case does surface, the same question that Netcom answered privately with the church will have to be answered publicly for the court. "If ISPs are held liable once they know, what will the standards be? Will they wipe out any infringing materials that get published through their system?" asked Gima. "That would be a lot of work, so I'm not quite sure what the solution is?I think it's clear that no ISP can be in a position to monitor everything that comes in their system and I'm hoping that's crystal clear to any court that hears a case like this, but it raises a lot of questions," Gima said.

Related story:
Netcom and Scientology settle