Extradition Nightmare for Website Entrepreneur

Last week a judge ruled that a UK student can be extradited to the US on a charge of copyright infringement. Richard O’Dwyer funded his university education by setting up the website TVShack.net which hosted links to films and TV programmes.

In his defence O’Dwyer has pointed out that the material was hosted on a server based in the UK and did not contain copyright material. Further at no point during his activities did Mr O’Dwyer leave the UK.

The US Immigration and Customs Enforcement agency (ICE) has sought extradition of Mr O’Dwyer on the basis that even if the activity was legal in the UK, .net and .com addresses are routed through American infrastucture based at Verisign in Virginia and the prosecution can therefore be considered under US law.

The case is interesting for UK based web developers, IT consultants and businesses that specialise in the tech industry because it highlights the exposure that these businesses have to actions from around the world, even if the business is very small or does not trade outside of the UK. The nature of the business means that every web site has the potential to reach and breach the laws of countries around the globe. The result is the potential for legal action against both the business and the directors.

Whatever the rights and wrongs of the situation, O’Dwyer has had to face the onerous financial cost of defending himself against the extradition and the cost of appeal. These costs will be irrecoverable even if when the case is eventually heard, he is found to have done nothing wrong. In the event that he is found guilty then not only will he face up to five years in a US gaol, he may also have to pay damages for infringement of copyright.

This case highlights how owners of web sites with open forum discussion groups or income generating possibilities, whether small, huge or not for profit, must consider carefully how to protect themselves and why all Tech businesses, whether family run or Limited, should buy good quality insurance protection to pay the cost of defending this type of action.

There are two relevant types of insurance cover which are essential – Professional Indemnity and Directors and Officers cover.
Professional Indemnity Insurance (PII) for tech professions will provide cover for defending claims for inadvertent copyright infringement and will also cover the cost of damages which arise from such actions. The cover will be subject to a pre agreed limit and an excess, however if you buy a good quality insurance policy then the defence costs will normally be covered without excess or limit.

PII cover for tech professions needs to be on a geographical and territorial limit basis of Worldwide (including USA and Canada) for it to provide adequate protection.

Professional Indemnity cover will not provide insurance to pay for the cost of defending the extradition hearings or appeals. However a good quality Directors and Officers policy will provide this cover. A Directors and Officers policy is normally bought by Limited Companies or Clubs, Societies or Associations, however they can be adapted to suit sole traders to provide protection against the risks faced by individuals.

For further information about Professional Indemnity Insurance for IT professionals and Directors and Officers Insurance please call PI Expert on 01825 745 410

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