Has to turn over name of customer accused of libel:

The Virginia Supreme Court ruled against America Online in its efforts to protect the identity of one of its 35 million subscribers by asking the court to quash a subpoena calling for the member's name in an issue that goes to the heart of the anonymity of the Internet.

The ruling against the world's largest Internet service provider, based in Dulles, Virginia, was the latest in the evolution of privacy laws as they pertain to the Internet and identities of Web surfers, privacy experts said.

"The law is very unsettled and still being written. Any decision by the highest court of any state — particularly the one where AOL resides — is significant," said David Sobel, general counsel at Electronic Privacy Information Center.

The Virginia Supreme Court sided with a lower California court's ruling that supported Nam Tai Electronics Inc.'s request to subpoena the identity of an AOL user as part of a complaint that alleged libel, trade libel and violations of California's unfair business practice statutes.

The electronics company alleged in its complaint, filed in January 2001 in California Superior Court, that 51 unknown individuals, including an AOL subscriber, posted "false, defamatory and otherwise unlawful messages" about the company's stock on an Internet message board.

"The case is important to the extent that AOL was attempting to ask the Virginia Supreme Court to adopt a rule of law for Internet speech that was different than the law as it exists for the bricks and mortar world," Jon Talotta, associate at Kirkpatrick & Lockhart, which represents Nam Tai, told Reuters.

"This ruling makes this a traditional defamation case," added Robert Feyder, litigation partner at the law firm.

In April 2001, AOL filed a motion to quash Nam Tai's subpoena. arguing it should not be required to reveal subscriber information because it would "infringe on the well-established First Amendment right to speak anonymously."

....Privacy experts called the ruling significant but said more litigation involving online privacy issues would likely unfold before a determination is made about what a company needs to prove before winning such cases.

More AOL:

Following months of watching startups attack its public instant messaging (IM) service as too consumer-oriented, America Online on Monday delivered a new gateway that provides enterprise-class features but also provides easy access to its 180 million IM users.

AOL's new AIM Enterprise Gateway manages corporate IM behind company firewalls, providing features such as chat logging, auditing and local routing of instant messages.

In addition, enterprises can centrally set up and take down screen names, map users to a corporate directory and set up user controls via an optional add-on dubbed Private Domain Service with Federated Authentication.

All that is missing in the first release is security — a key requirement for many enterprises. AOL says it will add encryption via a partnership with Verisign early next year, but both IM users in a conversation will need encryption capabilities to make it work.