Venting on the Internet.

Insurers need to be aware that the law doesn't strictly prohibit individuals' use of their brand name on the Internet.

The Internet has changed the landscape of many insurance issues. Most of these changes have fallen within two frontiers: coverage questions concerning claims arising from the Internet and procedural questions concerning where Internet-related disputes will be litigated.

A recent case opened a third frontier: How can an insurance company protect itself against a disgruntled policyholder who is using the insurer's trademark to voice dissatisfaction on the Internet? This was the issue before the court in the recent decision arising from Northland Insurance Companies vs. Blaylock.

In this case, the policyholder had purchased coverage for his yacht. A dispute arose over a claim. Litigation followed. The policyholder was disappointed with the result and angry with the insurer. The policyholder then registered the domain name www.northlandinsurance.com. At this site, he published: "If you feel you have been ABUSED at the hands" of this insurer, "please click the link above. You're not alone." The visitor was then brought to a second Web site that presented the policyholder's negative views concerning this insurer.

Northland sued. Naturally, the company wanted an immediate end to the Web site, even before the case proceeded to trial. The insurer asked the court to issue a preliminary injunction, the immediate issuance of an order controlling the Web site.

Courts scrutinize requests for injunctions, particularly injunctions that are issued before a case is litigated. Scrutiny becomes even more intense when the injunction, as in this case, would affect free speech.

To obtain a preliminary injunction, the party seeking the injunction must show, among other things, a substantial probability of success on the merits. In plain English, the party asking for the injunction must convince the court that it is likely to win the case.

The insurer was careful. Rather than relying on one theory to get the relief, it presented four: common law trademark infringement, trademark dilution, unfair business practices and cybersquatting. Each basis for relief was codified in a statute. But each statute limited its relief to circumstances where the wrongdoer had a commercial or profit-seeking motive.

Does a disgruntled policyholder on the Internet have a commercial or profit-seeking motive? The policyholder in Blaylock was not altruistically providing a forum for free speech. He had been angered by the result on his claim and financial issues were at the forefront. At the outset of the dispute, the insurer offered the to pay $3,500 to the policyholder in return for the domain name. The policyholder responded that this figure "way undervalued" the domain name, and he referred the insurer to instances where multimillion-dollar payments were made for domain names.

To me, the discussion concerning settlement value shows that the policyholder had a profit-seeking motive. The court saw it differently, concluding that the insurer had failed to demonstrate the requisite interest in profits. Consequently, the court concluded that it was uncertain whether the insurer would win on the merits. The request for a preliminary injunction, therefore, was denied.

This case, while not uniquely applicable to insurers, offers several lessons to this industry.

First, while there are statutory protections concerning trademarks and Internet conduct, these statutes do not guarantee protection. Even with a variety of statutes and theories, corporations remain vulnerable to Internet attacks.

Second, different facts or even a slightly different view of the facts can lead to a very different result. In a case involving Columbia Insurance Co., the court granted a preliminary injunction to bar the misuse of a trademark (OBH Inc. vs. Spotlight Magazine Inc.). The critical difference between the cases: The OBH court found that the defendant had a commercial motive.

But if the court in the Blaylock case had considered the settlement negotiations as profit-seeking, the court might have granted the injunction there. It is difficult to reconcile the different outcomes in these cases.

Third, what about defamation? In Blaylock, defamation was not among the theories addressed by the court. Perhaps the Web site message was considered truthful. Truth, of course, is a defense to defamation. But if a defamation claim is possible, it should be considered, as defamation does not require a showing that the defendant intended to profit.

Insurers, particularly personal lines insurers, must be aware that individuals are using the Internet as a coercive weapon.

Alan S. Rutkin, a Best's Review columnist, is a partner in Rivkin, Radler & Kremer, Uniondale, N.Y.