The Real Threat of Internet Jurisdiction

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Michael Geist <mgeist () uottawa ca>
Date: Mon, 24 Feb 2003 06:45:30 -0500
To: dave () farber net
Subject: The Real Threat of Internet Jurisdiction

Dave,

Hope all is well.  My column today on Internet jurisdiction, which argues
that the real jurisdictional threat comes not from high profile cases such
as Gutnick and Kazaa but rather from statutory developments that adopt an
expressly extra-territorial approach.  In particular, recent decisions
interpreting the Anticybersquatting Consumer Protection Act ensure that U.S.
law applies to every dot-com domain, regardless of where it was registered,
when it was registered, or what a foreign court has to say about it.

Column is online at
<http://shorl.com/bedridagrisovu>

<http://www.torontostar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/
Article_Type1&c=Article&cid=1035778088598&call_pageid=968350072197&col=96904
8863851>


Best,

MG
In Web disputes, U.S. law rules the world

Few Internet law issues generate more controversy than concerns surrounding
Internet jurisdiction.  In recent months, courts in both Australia and the
United States have grappled with the issue in high-profile cases.  The first
involved an allegedly defamatory Wall Street Journal article about Joseph
Gutnick, an Australian businessman, who chose sue in Australia rather than
in the United States, where the newspaper is based. The second involved a
copyright infringement suit launched in a California court against Kazaa, a
leading online peer-to-peer file sharing service that is owned by an
Australian company and incorporated in the Pacific nation of Vanuatu.

In both instances, the courts chose to assert jurisdiction over the
disputes.  While the Gutnick case spurred several ominous editorials in the
U.S. about the negative implications for free speech that could ensue as a
result of the decision, the truth is that both courts merely adopted an
approach that is commonly used worldwide.

Simply put, courts in all countries are inclined to assert jurisdiction over
online activity, wherever it originates, so long as harm is experienced
locally and the sense is that the party responsible either knew or ought to
have known that the harm was a likely consequence of their actions.  This
approach has been applied by French courts in cases involving the online
availability of Nazi memorabilia, by U.S. courts in cases involving
copyright and online gambling, and by British and Australian courts in cases
involving online defamation.

While the debate over cases such as Gutnick and Kazaa are bound to continue,
a much greater Internet jurisdiction threat has arisen despite scant
attention.  The larger threat comes not from courts asserting jurisdiction
over online activity, but rather from national legislatures that create laws
that are expressly designed to apply not just in their own country but
worldwide.

The United States has begun to use this approach quite regularly with new
privacy, copyright, and computer crime legislation that feature
extra-territorial provisions ensuring that the law may be applied both in
the U.S. and abroad.

The most blatant example of this extra-territorial approach comes from the
U.S. Anticybersquatting Consumer Protection Act, a law enacted in 1999 to
deal with cases of domain name cybersquatting.  Over the past three years,
U.S. courts have faced numerous cases involving the application of the ACPA
and it has gradually become apparent that this law has no limits.

The drafters of the ACPA recognized that one of the challenges inherent in
resolving domain name disputes is that the plaintiff, invariably the
trademark holder, will frequently reside in a different jurisdiction from
that of the domain name registrant. While the trademark holder may be able
to obtain a local court order to have the domain name transferred or
cancelled, enforcing the order against an out-of-country defendant is an
expensive undertaking.

The ACPA overcomes this problem by granting trademark holders the right to
file a lawsuit against the domain name itself, rather than against the
domain name registrant.  That approach, known as in rem jurisdiction, treats
the domain name as property that can be sued.  The statute, which applies to
dot-com, dot-net, and dot-org domains, reaches that conclusion by referring
to the fact that the domain name system's root server, the database that
houses all domain names and their corresponding numeric addresses, is
located in Virginia.

The use of the in rem jurisdictional provision is a classic example of
legislating outside national borders.  For example, the provision surfaced
in 2000 in a dispute between two Canadian parties over the technodome.com
domain name. Although the trademark holder could have launched a trademark
infringement action in Canada, where the courts have addressed
cybersquatting issues on several occasions, it chose instead to launch an
ACPA action in Virginia where it successfully invoked the in rem
jurisdiction clause by suing the domain name, rather than its owner.

The controversy stemming from ACPA cases do not stop with the technodome.com
decision.  In a case that will be the subject of an appeal to be heard later
this week, the City of Barcelona sued the longtime owner of the
Barcelona.com domain name by invoking the ACPA.  The U.S. court asserted
jurisdiction over the dispute despite the fact that the City did not hold a
U.S. trademark in the name Barcelona.  Rather, the court concluded that the
ACPA could be applied equally to foreign trademarks.

Earlier this month, two new decisions stretched the boundaries of the ACPA
even further.  In one case, a U.S. appellate court ruled that the statute
governed domain names that were registered before the statute even came into
effect, effectively ensuring that all dot-com domains are included
regardless of when they were registered.

The same week, another U.S. court ruled that it could order the transfer of
the domain name even where a foreign court had issued an order barring the
transfer.  The U.S. court reasoned that its ACPA decision trumped a Korean
court's order blocking the transfer since the U.S. court had been the first
to address the validity of the domain name registration.

The collective result of these cases is that the ACPA now covers every
dot-com domain, regardless of where it was registered, when it was
registered, or what a foreign court has to say about it. While U.S. free
speech interests may fret about the effect of foreign decisions involving
the Internet, they would do well to consider the impact of U.S. legislation
on courts and legislatures worldwide.  With the extra-territorial
applicability of laws such as the ACPA, judges and policy makers now find
themselves unable to establish their own laws and policies since the U.S.
has in effect done it for them.
Michael Geist is a law professor at the University of Ottawa and technology
counsel with the law firm Osler Hoskin & Harcourt LLP. He is on-line at
www.lawbytes.ca and www.osler.com (mgeist () uottawa ca).
-- 
**********************************************************************
Professor Michael A. Geist
University of Ottawa Law School, Common Law Section
Technology Counsel, Osler, Hoskin & Harcourt LLP
57 Louis Pasteur St., P.O. Box 450, Stn. A, Ottawa, Ontario, K1N 6N5
Tel: 613-562-5800, x3319     Fax: 613-562-5124
mgeist () pobox com              http://www.lawbytes.ca

BNA's Internet Law News - http://www.bna.com/ilaw
Toronto Star Law Bytes columns at http://shorl.com/derakoprutapu
Internet Law Text - http://www.captus.com/Information/inetlaw-flyer.htm
Canadian Privacy Law at: http://www.privacyinfo.ca
ICANN UDRP Info at http://www.udrpinfo.com
ccTLD Governance Project at http://www.cctldinfo.com


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