This is a copy of the C2Net Press Release from 14 Oct 1996
C2Net is an ISP, providing shell accounts and web hosting services. But the company is primarily a software vendor, selling Stronghold, one of the most popular secure web servers on the market. "We were looking into joining the Software Publisher's Association, who filed the suit on behalf of the plaintiffs," said Parekh, "but it's not very likely to happen at this point."
The lawsuit appears to charge C2Net with liability based upon allegations that C2Net's customers provide links to pirated software on other machines and "cracker tools" that allow users to beat copy-protection mechanisms like software serial numbers.
"It's completely outrageous that the SPA has nothing better to do than to file frivolous lawsuits against hard-working Internet Service Providers," said Parekh. "We are not aware of any such links on our pages or our customer's pages, and if our customers are breaking any laws, we want to know about it so we can terminate their accounts." (The lawsuit provides no specific examples.)
The lawsuit was apparently filed after a single attempt to contact the company with a form-letter e-mail. The copy of the alleged e-mail included as an attachment to the suit shows the SPA's real motive. "They want us to sign a 'Code of Conduct'," said Parekh. "Among other things, we'd have to agree to routinely monitor our customer's web pages, which we won't do. We deal with complaints about our customers on a case by case basis, and we have a firm and clear policy against illegal activity of any sort. We've shut down accounts for less than what they're alleging in this lawsuit."
"This is clearly a frivolous lawsuit," said Terry Gross, counsel for C2Net. "The plaintiffs know that an ISP can only be liable if it participates in and has knowledge of the improper activity, and it is clear that they have no such basis."
Although the lawsuit does not mention the "Code of Conduct", it appears that most ISPs who received the e-mail ended up signing it, largely to avoid legal action from the much-feared SPA. Those that didn't kowtow got sued.
"The terms of the 'Code of Conduct' are completely unacceptable," said Parekh. "It basically gives the SPA the right to go on an ongoing fishing expedition through our customer's files, and requires us to do the same as their agent on a regular basis. The Code would classify us as 'publishers', and we would become responsible for everything our customers do. We've built this business on a solid foundation of respect for our customer's privacy. Monitoring their activities without grounds for suspicion is completely inconsistent with maintaining their privacy."
"This lawsuit is grossly unfair, and it's going to cost us a lot of time and money, but we don't have any choice but to fight it," said Parekh. "What we have here is three giant software companies and their well-funded bag of lawyers trying to bully a smaller software company into adopting costly policies that invade customers' privacy."
A coalition is currently being formed to fight this case and make sure that this form of legal terrorism does not occur in the future against internet providers. The coalition will probably include the three companies that have been served in the suit and other organizations with a stake in creating a rational legal enviroment for ISPs and their customers.
C2Net provides high-security encryption solutions for the Internet worldwide. More information about C2Net's products are available at https://stronghold.c2.net/. Information about the forming coalition may be found at https://www.c2.net/ispdc/.