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By Graham Hayday, 9 June 1999 11:40

NEWS Demon Internet has failed to overturn a High Court ruling that it acts as publisher of all information held on its servers, and can consequently be sued for carrying defamatory content, according to a physicist involved in a legal battle with the UK Internet service provider (ISP). A defamation case will now proceed in the High Court after Demon missed a deadline to appeal against a pre-trial ruling made in March. The lawsuit - filed by Laurence Godfrey - will have far-reaching implications for all ISPs. Godfrey, a London-based physics, mathematics and computer science lecturer, served a writ on Demon regarding an allegedly forged message posted in a Demon-hosted newsgroup in January 1997. Demon was informed in writing about the defamatory message, but failed to remove it from its servers. On 23 March, Mr Justice Morland made a preliminary ruling supporting Godfrey's assertion that Demon is responsible for all content held on its servers, striking out an 'Internet defence' relied on by ISPs in defamation cases, in which they can argue they are storing and passing on data and messages without being aware of their content. Morland said at the time: "In my judgement the defendants [Demon Internet], whenever they transmit and whenever there is transmitted from the storage of their news server a defamatory posting, publish that posting to any subscriber to their ISP who accesses the newsgroup containing that posting." Demon originally stated its intention to appeal against this on 26 March, claiming that the ruling would "effect the entire ethos of freedom of speech on the Internet and leave UK businesses lagging behind the rest of the world in electronic commerce". However, the deadline for that appeal passed at 4.30pm BST on 7 June, and the original ruling will be upheld. Demon has refused to comment on the case. Godfrey said: "I am not surprised if Demon has indeed made a U-turn and abandoned its much-publicised intention to appeal." The judgement will remain a precedent, according to Godfrey, and will be binding on the High Court and on all lower courts. Unless the Court of Appeal overturns the judgement at some point in the future, all ISPs in England and Wales are liable for any defamatory material that they know they are carrying, irrespective of where it originated. Yaman Akdeniz, director of civil liberties group, Cyber-Rights and Cyber-Liberties UK, said: "I think this is an unfortunate outcome. The law as it stands is clear, but doesn't give sufficient protection to ISPs. If an ISP has been given notice [of the existence of defamatory material], it either has to take it down or face the consequences. There is an urgent need for ISPs to lobby government to change the current laws."