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Click here to return to the Cyber Liability Insurance menu.Cyber Liability Insurance > Claims Examples

Third Party Liability

Breach of Intellectual Property rights:

  • Amazon vs. Barnes and Noble
    Amazon.com has filed a suit against its rival Barnes and Noble for patent infringement and for using the same business processes on its website.

  • Microsoft vs Priceline.com
    Priceline.com has filed a suit against Microsoft for copying its patented method of reverse auction. Priceline.com allows customers to name their price first for plane tickets and hotel rooms, in what is known as a reverse auction. In September, Microsoft launched a service that allowed customers to name their price for hotel rooms.

  • Easypeople.com
    Easy Group the company owned by easyJet found 60 separate cases of web companies that have the word "easy" in their registered internet domain name. In one specific case Easy Group took legal action against easypeople.co.uk and demanded that they pay the fee of £ 100,000 for its legal costs in pursuing the matter.

  • Napster August 2000
    Napster is standing trial for copyright infringement. The music piracy station was set up by a nineteen year old American Shawn Fanning.

    Artists and the music industry have accused the founder of having cost them an estimated £1.7billion pounds. If found liable they could be faced with millions of dollars in damages.

  • MP3 July 2000
    MP3 pays record labels £60 million for online rights infringements. Mp3.com publicly listed companies whose website came under fire for storing CDs in Mp3 format and making them available over the internet. In the US 13 million people have downloaded MP3 versions of songs free!

  • VNU vs Monsterboard
    In the Dutch case of VNU vs Monsterboard, Monsterboard made an arrangement whereby when people searched on an on line careers service site for one of the trade marks of VNU, a Monsterboard banner advertisement popped up at the same time as the search results.

    Monsterboard and VNU were competitors. The Dutch Court had no difficulty in finding that Monsterboard had infringed VNU's trademarks by arranging for this to happen. It is anticipated that a UK Court would decide similarly.

  • Russian Scam Artist vs Paypal.com
    This was an attempt by a Russian scam artist to get usernames and passwords to fraudulently withdraw money. The URL used was paypal.com with a capital I. In lower case it would be paypai, but when a capital I is used the urllooks just like a lower case L and the true url Paypal.com. This of course is a clear case of use of a confusingly similar mark to deceive and would be trademark infringement, copyright infringement and passing off.

  • The Religious Technology Center and New Era Publications International APS vs Dataweb BY & Others
    In the Dutch case of Church of Spiritual Technology, The Religious Technology Centre and New Era Publications International APS v Dataweb BY & Others, a free speech activist Ms Spaink had posted the writings of Ron Hubbard on the Internet. The church of Scientology sued her and the ISP hosting the material for copyright infringement. The Court held that not only was hosting a site contributory infringement, but so was enabling a link to such a site.

Intellectual Property (Attack) cover

  • Mandata
    An IT company was forced to pay an estimated £80,000 in respect of costs and damages after the company was found guilty of infringing the registered trademark of its rival. Road Tech Computer Systems. Mandata had included the trademark as one of the metatags on its website.

  • Starbucks vs Cybersquatter
    Starbucks coffee recently succeeded in the US in preventing a site containing a parody of their mermaid logo to criticise their business. The mermaid was given breasts and described as a Consumer Whore. Starbucks succeeded in obtaining an injunction to prevent this material from being distributed on the grounds of trademark and copyright infringement.

  • Yahoo and Yoohoo
    The American-based internet company, Yahoo, filed a lawsuit against the owners of a website called Yoohoo. Yahoo an American based company felt that the use of Yoohoo is a breach of their trademark.

  • Leonard-Cheshire.org and Leonard-Cheshire.com
    An individual set up an anti-site against the Leonard Cheshire foundation, complaining about the extravagance and patronising way it deals with disabled people. On 23 January the Leonard Cheshire foundation initiated action against the operators of Leonard-cheshire.com, by taking them the World Intellectual Property Organisation for arbitration in this matter. The outcome is pending.

Mispricing Disputes

  • Egghead.com vs Disgruntled Customers
    Egghead mistakenly priced the memory module 256MB at $34.85, this price was listed on its website for 7hrs. When customers ordered the product for that price Egghead.com cancelled the order on the basis that it was wrongly priced. Disgruntled customers are now threatening legal action against Egghead.com.

  • Buy.com
    Online store buy.com has agreed to pay $575,000 to settle a court dispute over a mistakenly priced item in a Web store. The lawsuit against Buy.com stems from a 19-inch Hitachi computer monitor that the company mistakenly priced in February 1999. During a four-day period that month, Buy.com listed the monitor for $164.50, some $400 less than its normal list price.

    Buy.com said that the price difference was due to a data entry error. Despite that, a group of customers filed suit against the company in March 1999.

  • Argos
    Customers visiting the Argos website found that goods had been wrongly priced.

Domain Names

  • Rossa Parks vs Cybersquater
    Rosa Parks, who stood against racism by refusing to give up her seat on a bus in 1955, was no more inclined to give up when someone else registered her domain name (www.rosaparks.com) and has now been successful in acquiring it from the' cybersquater' at the grand old age of 87. This is the latest in a long line of domain name dispute decisions which appears to be a rapidly growing industry .The legal issues surrounding domain disputes can sometimes be very complex although, after legal advice, more cost-effective solutions such as the WIPO dispute resolution service may be your best option.

  • Juliaroberts.com vs Cybersquater
    A cybersquater registered Julia Roberts domain name and turned it in to a porn site. The actress took the squatter to court to claim back her name.

  • Madonna vs Cybersquater
    Madonna has won control of the domain name Madonna.com after the World Intellectual Property Organisation ruled that the domain, which was previously controlled by an entrepreneur who runs a successful porn site, was being used in bad faith -featuring sexually explicit photographs.

  • Barcelona City Council vs. Barcelona.com Inc
    In 1996 Barcelona.com was registered by Concepico Riera and an American company was set up. In May 2000, Barcelona City Council filed a complaint with the World Intellectual Property Organisation claiming ownership of the Domain. Although their trademarks are not identical to "Barcelona" or "Barcelona.com their case was upheld, and the domain was transferred in arbitration.

Defamation/Libel/Slander

  • Downing Street June 2000
    The Downing Street internet pages have been hijacked by extremists. The message, and others equally insulting, stayed on the No10 site for seven days until the Sunday Times contacted Downing Street.

  • Norwich Union 1999
    Perhaps the most serious libel case of recent times was that against Norwich Union. An employee circulated a series of internal emails claiming one of their competitors was being investigated by the Department of Trade and Industry. These found their way to Norwich Union's competitor who promptly started legal action. The result was that Norwich Union paid £450,000 in compensation.

  • Amazon.co.uk vs David Trimble
    A libel action is being taken against the internet's largest bookseller Amazon.com for selling offensive material from its website. The First Minister David Trimble felt his reputation was put on the line and is seeking an apology and damages from the book seller. (BBC Online).

  • Asda vs Eggleton 1999
    After buying some beef from Asda, policeman David Eggleton discovered it was off. He returned it to the store, where he was refunded. However the Asda employee he dealt with, believed that Mr Eggleton was acting dishonestly. He circulated the policeman's details on Asda's electronic bulletin board, effectively accusing him of fraud. This was discovered by Mr Eggleton and an action for libel was threatened. Asda accepted this and paid a "substantial sum" in compensation.

  • Laurence Godfrey vs Demon (ISP) March 2000
    In January a posting appeared on one of Demon's news groups which was 'squalid', obscene and defamed Mr Godfrey. The obscene web page was said to have been written by Mr Godfrey, but it was a forgery. Laurence Godfrey has won £15,000 in damages for two newsgroup libels. Demon have also been reported to pay legal costs of £250,000.

  • English Tour Company vs Disgruntled Customer
    A disgruntled Australian customer posted derogatory statements on the website of an English tour company. The offending web pages made defamatory allegations against the company. This caused a substantial decline in the company's bookings. The case was referred to lawyers who managed to persuade the ISP to remove the pages of their server.

  • Chevron USA Inc
    Last year the Oil Company paid $2.2 million to settle a sexual harassment lawsuit over its e-mail content. The allegations were made by a group of women employees who alleged a Chevron subsidiary allowed its internal email system to be used to transmit sexually offensive messages.

  • Jimmy Hill vs Scottish & Newcastle
    The brewing company Scottish and Newcastle ordered that controversial material appearing on the Tartan Army internet site insulting Jimmy Hill be deleted in a bid to avoid costly court actions. The football commentator felt offended after reading the Scottish and Newcastle's "We Hate Jimmy Hill" page. Further to this Jimmy Hill discovered the chant " We hate Jimmy Hill He's a**** had been translated into 32 languages. Tartan Army and Scottish & Newcastle later reached an amicable agreement out of court.

  • Yahoo.New Jersey
    For the first time ever a New Jersey State judge ruled that anonymous messages on Yahoo by three defendants constituted libel against Biomatrix, a bio-medical firm which previously employed two of the accused.

  • Leonard-Cheshire.org and Leonard-Cheshire.com
    An individual set up an anti-site against the Leonard Cheshire foundation, complaining about the extravagance and patronising way it deals with disabled people. On 23 January the Leonard Cheshire foundation initiated action against the operators of Leonard-cheshire.com, by taking them the World Intellectual Property Organisation for arbitration in this matter. The outcome is pending.

Privacy/Confidentialitv/Data Protection

  • British Gas
    A payment of around £200,000 was made to an ex-employee arising from comments circulated via the internet.

  • Ikea September 2000
    A security blunder at IKEA's online store left a database file containing customer information unprotected and accessible to any web visitor. The glitch revealed the names, addresses, telephone numbers and e-mail information belonging to customers who had ordered a catalogue from IKEA.

Jurisdiction Issues

  • Yahoo July 2000
    The internet service provider has argued in a French court that it was technically impossible for it to comply with an order to block French users from Nazi material auctioned on its US site. The court has threatened daily fines of more than £100,000. The case has big implications for national court abilities to impose their jurisdiction on global internet sites, legal experts say.

  • David Trimble Vs Amazon UK June 1999
    Northern Ireland's First Minister has recently sued the online bookstore for selling a "politically offensive" book. Amazon UK has removed the book from its UK site but not from its other sites which means customers can still buy the book from international sites.

Credit Card

  • Powergen July 2000
    Have confirmed a security breach in which thousands of customers may have had their banking details revealed. John Chamberlain, of Leicester decided to test Powergen security after seeing the Panorama programme on Cyber Attack. In under three minutes Mr Chamberlain had access to 5,000 credit card details, names & addresses etc. Powergen have contacted each customer advising them to change their card numbers and £50.00 compensation was paid to each customer. System experts confirmed that this was a one-off incident. Initial investigations showed that the information, which had been accessed, was in a file which due to a technical error was temporarily outside of the security gate of the system.

  • Scottish Widows 22 August 2000 - postal breach, not internet/ email
    Scottish Widows admitted a breach of security after policyholders were wrongly sent other people's confidential banking details including account numbers and password information. The incident occurred as the insurance group started sending out windfall cheques averaging £5,7000 to almost I million policyholders.

  • Western Union -10 September 2000
    Western Union suffered a security breach due to human error when performance management files were left open on the site during routine maintenance. Around 15,700 credit and debit card details was stolen by a hacker but no fraud has yet being detected.

  • Citibank
    1994: Vladimir Levin hacked into Citibank, and stole around £6.25m using an old computer in an accountancy office in St Petersburg. In 1995, he was arrested in the UK and extradited to the US where he is now serving a prison sentence. The FBI has still not recovered £250,000 of the funds taken from client accounts.

  • Egg August 23 2000
    Three internet robbers succeeded in stealing from Egg the online bank. The hackers were able to make multiple credit card applications over the internet. It is not clear how much the robbers managed to steal but what is evident is that online companies need insurance in the event that such incidents happen.

  • Barclays
    Barclays Online, suffered a breach which allowed at least four customers to access the bank details of other Barclays customers.

  • IKEA 7 September 2000
    The Swedish furniture firm IKEA experienced a security blunder at its online store this week, exposing the private details of hundreds of customers online. The glitch revealed the names, addresses, telephone numbers and e-mail information belonging to customers.

  • Expedia February 2000
    Expedia is an internet success story, selling more than $1 billion in airline tickets, hotel and car bookings. But in February 2000, it announced it had been the victim of massive fraud and had taken charge of between $4 and $6 million in one quarter to cover the cost of purchases made with stolen credit cards. These losses could be as much as 16% of revenue and wipe almost 30% off their gross profits.

  • Real Names.com 1999
    Customer database was hacked into, and that customer credit card numbers and passwords may have been accessed. The company substitutes complicated web addresses with simple keywords. The attacks have prompted a security audit for Real Names.com

Hacking

  • Hackers attack Microsoft's network: October 27 2000
    Hackers broke into Microsoft's computer network and gained access to blueprints of its latest Software. The hackers gained access to source codes -for software products such as the Windows operating system. It is not clear whether any of Microsoft's intellectual property was stolen but the incident does raises fears that companies may be facing greater threats from hackers of all sorts.

  • Hacker defaces HSBC website
    HSBC bank faced an internet security scare today when a hacker defaced several of its website pages. The hacker broke into the bank's British home page and posted a picture of Prime Minister Tony Blair and a message in support of the recent fuel protests. Sites in Spain and Greece where also affected.

    The same hacker has also been behind a string of similar recent attacks on web sites including several local government agency sites and legoland.co.uk.

  • Manchester United April 2000
    Hackers hijacked 2000 websites. Some of the high profile sites included Manutd.com, Adidas.com and Mgm.com. The hackers were able to access e-mail and financial details of registered customers. Spoof emails were sent to customers seeking them to change their registration details to addresses in Serbia, Kosovo, and Albania. Visitors to the affected sites were greeted with the message, "Kosovo is Serbia. Be happy if we hacked your site because we only hack the best sites on the internet!".

  • E-Bay 1999
    Hackers gained access to the E-Bay on-line auction site disrupting records and trades. It took 22 hours to restore the site but the damage to E-Bay's reputation resulted in tens of millions of dollars being wiped from its stock market value.

  • UBS
    2000: UBS, The Swiss banking group, was forced to issue a warning to its customers after they received an e-mail virus that attempted to steal their Pin numbers. UBS later said that only a small proportion of its e-banking clients were at risk as most did not use the bank's PIN number-based software. (Telegraph 31/08/00)

  • Microsoft
    1999:Microsoft's free e-mail service Hotmail was attacked, exposing the personal correspondence of more than 40m users. The service was shut down for around five hours. 1998: Two Chinese brothers were sentenced to death for hacking into a Shanghai bank's computer and stealing £20,000.

  • Hacker Targets Bill Gates
    A hacker defaced the website of a California newspaper, to read that the Microsoft Chairman Bill Gates was arrested for breaking into NASA computers. To date the case is being investigated by the Federal Bureau of investigation.

  • Labour party
    1996: The Labour party's website was hacked into and the contents changed. The strapline "New Labour-New Britain" was changed to "New Labour -Same Politicians, Same Lies". Tony Blair's picture was altered to a spitting image-style caricature.

Viruses

  • Love Bug May 2000
    The virus paralysed networks for days. It appeared in the form of an 'I Love You' e-mail with an attachment that people were encouraged to open. Estimates of the worldwide damage from the virus range from hundreds of millions of dollars to $10bn, mostly in lost work time. The havoc affected some of the biggest companies in the world and thousands of business hours were lost in attempting to recover data.

  • New Love e-mail virus 19 May 2000
    The New Love e-mail virus, which originated in Israel, affected several hundred companies in Europe and the US. The self-mutating virus is carried by e-mail messages that include attachments. Once the virus finds its way into your Outlook address book it sends e-mails to everyone listed in the address book.

  • Melissa March 1999
    An e-mail virus called Melissa swept throughout the work place in March 1999. The virus replicated itself and sent itself on to other networks undetected, corrupting files in nearly 60 major companies in the USA. Furthermore, thousands of other companies were impacted around the world. The final cost implications of this have not yet been established.

  • Kak Worm
    Shoppingplanet.com accidentally sent a virus to 50,000 subscribers in its promotional newsletter. The virus infects a computer when the user previews or reads the offending message in Outlook Express. This incident highlights the need for companies to be more aware of the e-risks and should constantly update their anti-virus packages.

Ransom

  • Yahoo
    Hackers caused disruption when they penetrated the Yahoo Website in 1997, replacing the homepage with a ransom note demanding the release of celebrity hacker, Kevin Mitnick. He had been jailed for five years for breaking into the systems of several multinational companies, and was the first computer criminal to appear on an FBI "most wanted" poster. He was released earlier this year, although he is banned from using any computer equipment for three years.

  • CD Universe vs Maxus
    Maxus a 19 year old Russian computer hacker demanded £62,000 worth of Christmas gifts from CD Universe in return for 300,000 credit card numbers he had stolen from the company's computer systems.

  • Misuse of Emails
    Orange the mobile phone company, sacked 45 members of staff for distributing pornography at work in clear breach of the company's internal rules.

  • Former Employee
    A dismissed Employee of the IT department encrypted the entire database of his ex-company. He demanded £1,000,000 in ransom. The company was preparing to call his bluff, when it found out that not only had he actually succeeded, but it would cost at least £5,000,000 in computer and employee time to undo the damage. The compromise was that they gave him a generous consultancy 'fee' to sort out the problem and agreed that no crime had taken place.

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