About Axact

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A case that highlights the lack oI uniIied global copyright and deIamation laws, and the business
and Iinancial ramiIications this has to on-line industries, is Axact Pvt limited vs Student Network
Resources.
The case
On November 14, 2007, Axact Pvt limited Iiled a complaint in New Jersey against Student
Network Resources`, SNR to stop it Irom making or publishing any Ialse statements against
Axact.
In its complaint Axact maintained that Student Network Resources, a company involved in
selling term paper to students, had used a screening name EssayIraud.org` and held itselI out to
be a watchdog` organization that investigates plagiarism in academia. Axact`s claim revolved
around the posting oI deIamatory material against Axact on this site. The complaint by Axact
listed 5 causes oI action: DeIamation, Trade Libel, Tortuous interIerence with prospective
economic advantage, False advertising and unIair competition and Consumer Iraud all against
Student Network Resources`. And that day a summons was issued as to Student Network
Resources`.
It is important to note here that Axact had earlier Iollowed-up to determine the owner oI the
website, www.essayIraud.org, who was also the poster oI the deIamatory material, with a series
oI subpoenas oI discovery in another State, Utah, through another attorney. It was through these
subpoenas, that the plaintiII Axact determined that the website run anonymously as an
independent Iraud watch-dog organization was in Iact owned by the deIendants, an allegation
SNR oIIicially admitted to at a later date, in their Answer to the Complaint, as per court records.
By Dec 21 2007, a notice oI appearance was Iiled by SNR, the deIendants, through their law Iirm
and they requested an extension oI time to answer, move or otherwise respond till Jan 10 2008.
AIter about 2 weeks, on the 3rd oI January, Axact`s attorney Iiled exhibits oI the complaint Iiled
in November. The latter`s attorney Iurther made a declaration on personal knowledge that the
Ioregoing is true and correct`. And within that week both parties, Axact and the deIendants
Student Network Resources` acting through their duly authorized counsel agreed that the time
Ior the deIendants to respond could be extended till February the 4th.
SNR responded with a counter claim on Feb 4th. Here they accepted the running oI both term
paper selling businesses and the maintaining oI the independent watchdog website
www.essayIraud.org, deIending all the deIamatory material by mentioning that all their
allegations are either true or just opinions. Near the end oI February, SNR Iurther submitted an
amended answer to the complaint and a counterclaim Ior copyright violations by Axact and sent
a Rule 11 letter to its Attorney; who had also made a mistake in obtaining one oI the subpoenas
and so chose no longer represent Axact. At that point, as per court records, Axact would rather
have pursued the case pro se.
efault 1udgement in favour of SNR - compensation US $694,750
Now as is standard in the US a corporate cannot Iile pro se, so it appears Axact decided not to
proceed with securing other counsel and so a deIault judgment was entered in Iavor oI SNR. The
judgement entered the statutory damages on the DeIendants` copyright claim in the amount oI
$300,000, attorney Iees, other Iees and an injunction against Axact and any Internet search
engines, Web hosts and domain-name registrars that are provided with notice oI the injunction
on a restriction Irom any Iuture copyright violations Ior the works oI SNR (3 copyrighted papers)
by Axact.
efault judgement in favour of Axact - compensation US $6,000,000
Axact meanwhile adhering to advice Iorm their local legal consul, Iiled a lawsuit in Pakistan in
the High Court oI Sind at Karachi, Ior damages and injunctions amounting US $6million and
other remedies. In Pakistan the deIendants opted not to join the suit even aIter served with
several court notices/summons and so Axact received a deIault judgment against SNR.
Conclusion
To conclude, though both countries have strong deIamation laws, neither legal process lead to an
eIIective resolution oI the underlying matters. Firstly,
1. Neither party can eIIectively pursue and claim their deIault judgment compensation amounts,
as no such treaty exists; this means it is highly unlikely that either the US $694,750 in Iavor oI
SNR or the US $6million judgement in Iavor oI Axact can be collected.
2. SNR has not secured a site stoppage order, whereas Axact has secured a site stoppage order
where they have the option to have SNR`s sites closed through their deIault judgment issued in
Pakistan, as the large internet search providers` accept such international stoppage orders.
3. In terms oI exposure oI their cases, Companies based in the US beneIit as all such US cases
are extensively shared and reported on, so they beneIit Irom a positive or deIault judgement,
whereas in other countries cases may not be reported so widely.
Fundamentally cases such as these will lead to businesses with operations on-line Iiling in their
countries oI origin, expecting deIault judgments and continuing business as usual. Ultimately it
appears the lawyers beneIit, but there is no net gain.