Volume I

Issue : 5: September 4, 2003

• U.S. Court of Appeals (9th Cir.) Asserts Jurisdiction over Online Retailer
• Court Limits Extraterritoriality of the U.S. Copyright Act
• Amazon.com Launches Lawsuits in U.S. and Canada to Stop Spoofing
• Property and Trade Secret Rights Outrank Free Speech Rights in DVD Copying Code Case
• Parties To Litigation Do Not Hold Copyrights Over Examination for Discovery Transcripts
• U.S. Court of Appeals Upholds Statutory Damages for Domain Registered Prior to the Enactment of ACPA
• Major U.S. ISP EarthLink Sues John Doe Spammers in B .C. and Alabama
• Defence of Misuse Extended to Suppression of Criticism in Copyright
• Online Broadcasters Sue Recording Industry (RIAA)
• Sixth Circuit Court Strikes Down Michigan Wine Law as Unconstitutional
• Saskatchewan Court of Appeal Upholds Criminal Conviction For Online Marketing Scheme
• U.S. First - North Dakota Prosecutes a Man for Gambling on the Internet
• U.S. Appeals Court (9th Cir.) Rules Massively Overbroad Subpoena For E-Mails Led to Privacy Violation

Home > Volume I > Issue 5: September 4, 2003 > Saskatchewan Court of Appeal Upholds Criminal Conviction For Online Marketing Scheme

Saskatchewan Court of Appeal Upholds Criminal Conviction For Online Marketing Scheme

In R. v. Friskie, the Saskatchewan Court of Appeal upheld the conviction of a retired school teacher under section 206(1)(e) of the Criminal Code for her part in an online marketing operation involving the sale of turn-key Internet websites through a multi-level distribution network.

The turn-key Internet website marketed by the appellant, known as the "Skybiz 2000", had consisted of a 15 megabyte website, free email, free Internet access, tutorials and other educational materials on computer use and website development. The websites were leased to purchasers for one year at a cost of US$100, plus an administration fee of $10. Purchasers were encouraged in turn to sell the "Skybiz 2000" product through multi-level distribution networks in return for commissions of 70% of the sales price. The appellant began marketing the "Skybiz 2000" product in the fall of 1999 and within eight months had earned more than $US130,000 from this business.

In her defence, the appellant argued that she had been engaged in the distribution of a valuable product by means of a legitimate multi-level distribution network. While acknowledging that the "Skybiz 2000" product was of some value and may have been acquired by some purchasers on that basis alone, the Court of Appeal concurred with the trial judge's finding on the facts that the online marketing operation was "a pyramid or money circulation scheme of the type prohibited by s. 206(1)(e)". As the Court of Appeal noted: "[t]he sales were not bona fide sales of websites to persons who purchased them for their intrinsic value. They were sold and purchased with a view to the purchaser receiving larger amounts of money from the commission pool created from the purchase price paid by subsequent recruits."

For a copy of the decision, visit:

http://makeashorterlink.com/