Former employee pays price for fake website
For the London Free Press – July 14, 2008
For 16 days in November 2004, customers of Inform Cycle Ltd. were shocked and embarrassed to find unexpected content on what they believed to be Inform Cycle’s website.
Inform Cycle’s actual site was at informcycle.ca. A month prior, a disgruntled former employee of Inform Cycle had purchased the domain name InformCycle.com. He had hoped this “.ca” to “.com” variation would be enough to wreak havoc with Inform Cycle’s customers and owners.
The former employee, now employed with a competitor, initially set up the Web domain to redirect users to his current employer’s website.
On Nov. 7, 2004, the former employee changed the forwarding address for InformCycle.com to a pornographic website. He then left for vacation in Costa Rica.
In a decision by the Alberta Court of Queen’s Bench released last month, the former employee was ordered to pay Inform Cycle $15,000, including aggravated and punitive damages.
Inform Cycle brought the action against its former employee citing the torts of passing off and defamation.
Passing off is about a misrepresentation that creates a public belief that the party at risk was associated with the action. It’s essentially a form of trade-mark infringement, usually found in cases in which a business leads customers to believe they are selling a better-known competitor’s product.
In this case, through his actions, the former employee tried to make it appear as though Inform Cycle was supporting a porn website. Obviously, the owners of the company were upset by being associated with this content. Without being able to disclose any financial evidence of direct loss of sales, the judge put this loss at $5,000.
Inform Cycle also argued that the former employee’s actions were a defamation of the company’s character. The decision states that the worldwide extent of the defamation over the Internet and the absence of any public apology on the part of the former employee exacerbated the company’s loss.
Though a company does not have a character in the general sense, it nonetheless has a reputation which the court felt deserving of compensation. This loss was put at a further $5,000.
Lastly, the court considered aggravated and punitive damages. Though a corporation can endure defamation of character, it is unable to suffer mental distress or hurt feelings and consequently cannot be compensated for aggravated damages. However, the malicious and oppressive conduct of this defendant so offended the “court’s sense of decency” that the judge awarded punitive damages of $5,000. It was an important deterrent to ensure such a grievous action was not replicated.
The courts recognize that the use of the Internet as a tool for committing such torts has the potential for wider damage than print media. With the assistance of the Internet and e-mail, damage to a character can potentially reach millions within seconds
