In the more recent case of Stratton Oakmont, Inc v Prodigy Services Company (1995) Supreme Court, State of New Yorkhttp://www.cpsr.org/cpsr/free_speech/so_v_prodigy_1995.txt], the ISP (Prodigy) was held liable for published defamations of Stratton Oakmont by Epstein, who it had contracted to be Board Leader for a 'Money Talk' discussion list. Ain J found Prodigy liable principally on the ground that it 'exercised sufficient editorial control ... to render it a publisher with the same responsibilities as a newspaper' (ie not an innocent disseminator like a newsagent). Actions by Prodigy taken into account included (i) it issued content guidelines; (ii) it used a screening program for offensive language; (iii) it used Board Leaders as discussion moderators; and (iv) it had technical means to delete after posting. Prodigy also held itself out to the public as a 'family network' that screened content. Ain J distinguished Cubby on the basis that (a) Prodigy held itself out as exercising control and (b) it did so - but he affirmed that the Cubby rule was generally the correct one.
In Australian defamation law, all ISPs 'handle' a defamatory message by passing it on will be at risk of being liable for `republishing' the defamation, unless the defence of innocent dissemination applies. The defence requires that the defendant had (i) no actual knowledge of the defamation; (ii) no reason to believe the material carried was defamatory; and (iii) no negligent in that lack of knowledge. The defence has usually applied to newsagents, booksellers, libraries and similar 'retail' distributors, but wholesalers or printers have not traditionally been able to rely on the defence.
The only fully argued Australian case to consider the innocent dissemination defence as yet, Thompson v Australian Capital Television (1994) 127 ALR 317, signals dangers for internet service providers. At first instance Gallop J held that the defence was available to a TV station republishing live by relay an interview originally broadcast on another TV station. However a full bench of the Federal Court (Burchett and Ryan JJ, Miles J dissenting) held that the TV station was an original publisher, not a republisher, of a programme that may never have been published in that area before. Policy factors were also in favour of limiting the defence, because of the possibility that overseas originators of defamatory material might be insolvent or could not be sued readily. Even if the defence did apply, the majority was of the view that it had not been made out because it was known that the programme was a current affairs programme, but no precautions were taken to guard against possible defamatory content.
Any ISPs carrying newsgroups or mailing lists dealing with `current affairs' would have to assume there is a risk that no innocent dissemination defence will be available, even in the absence of a reputation for carrying defamations (eg alt.flame newsgroup) or (ii) there is actual knowledge (.: failure to remove from archive after notice).
A more unusual cyberspace defamation issue has arisen recently, with solicitors for the University of Western Australia claiming that web sites and others who had published the URL of a web site in the USA which contained allegedly defamatory content were themselves liable for republishing that content.