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H E U N I V E R S I T Y O F
P E N N S Y L V A N I A L A W S C
H O O L
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L E C T R O N I C C O M M E R C
E : V E R S I O N 2.0
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Congratulations to the Fall 2001 class for an excellent semester.
eCommerce will return next year.
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Personal Jurisdiction I: Locating Web
Sites
Thursday, September 13,
2001
R E A D I N G S
Minimum Contacts in Cyberspace
In considering personal jurisdiction, we'll primarily
look at the limits on jurisdiction imposed by the United States Constitution,
and the ways that courts have adapted the "real world" rules
and procedures to fit this new era of eCommerce.
The primary reading is a section of a draft eCommerce
casebook:
Margaret Jane Radin,
John Rothchild and Gregory M. Silverman, Internet Commerce: Doing
Business in a Networked World (2001) [excerpts from Chapter 16]
[pdf, 75 kb]
As the notes in the casebook indicate, neither the
Zippo test nor the "effects" test have been hailed
as shining examples of the careful application of existing law to
eCommerce. Why do you think? Can you think of a better way to determine
whether jurisdiction exists?
Geography & Jurisdiction
The cases we have studied so far make an assumption
about the nature of geography on the 'net -- that it is either (a)
unimportant, or (b) impossible to determine. In fact, as we touched
upon in our class on the Architecture of the Internet, neither is
true. As you read the following, consider whether the increasing importance
(and awareness) of realspace geography should impact the way that
jurisdiction is considered.
Putting
it in its Place, Economist, August 9, 2001.
The
Internet's New Borders, Economist, August 9, 2001.
The availability of geographic information suggests
at least one possible solution to the question of jurisdiction over
web sites: that jurisdiction is deemed to exist wherever the site
is accessible (i.e., wherever, the site does not exclude visitors).
What are the pros and cons of this approach? Is is better than the
current Zippo-style approach?
N O T E S & Q U E S T
I O N S
1. The Downside of Jurisdiction.
Consider for a moment the "downside" of a liberal approach
to jurisdiction over web sites. What, specifically, are we worried
about? Traditionally, we have been worried that defendants would be
unfairly prejudiced by having to litigate in far-off places. The cases
describe these concerns in terms of "burdens" or "fairness".
Does the eCommerce context accentuate or reduce these concerns? On
the one hand, web sites can be accessed from essentially anywhere,
potentially leading to unlimited jurisdictional possibilities. On
the other hand, the widespread access is an often-touted reason to
engage in eCommerce -- the reach of even the smallest companies is
unprecedented. Should a two-person company located solely in Hawaii,
selling toy bears via a web site, be subjected to jurisdiction nationwide?
See, e.g., Ty, Inc. v. Baby Me, 2001 U.S. Dist. LEXIS 5761
(N.D. Il. 2001) (yes). Is fairness / burden the only relevant concern,
or does the eCommerce context suggest other potential downsides to
widespread jurisdiction?
2. International Issues. What happens if the
web server is located outside of the United States, but accessible
within the United States? Professor Jane Ginsburg of Columbia has
theorized the following:
If interactivity is the key to minimum contacts,
must in-state residents have in fact interacted with the website,
or does the potential for in-state viewing and storage suffice?
Courts that have found the minimum contacts standard satisfied by
the in-state accessibility of an out-of-state webpage appear to
emphasize potential access by in-state computer users, rather than
actual in-state access measured by the number of "hits" to the website.
Where in-state users have viewed or downloaded Le Grand Secret from
the foreign site, it should be clear that the out of state website
operator has initiated infringing transactions within the forum.
Where the site is accessible in-state but no evidence is submitted
as to actual hits, the "potential access" view of minimum contacts
would hold that, by inviting residents to view or acquire infringing
copies directly from the website, the out-of-state operator avails
itself of the benefits of conducting activities within the state.
On the other hand, were the evaluation of minimum contacts limited
to actual hits, it is conceivable that no single state would have
sufficient contacts with the offshore website operator. But this
need not mean that no U.S. court will be competent to hear a copyright
infringement claim against the foreign defendant. Because the claim
arises under federal copyright law, Federal Rule of Civil Procedure
4(k)(2) affords a special basis of personal jurisdiction in exactly
this kind of situation. The Rule provides:
If the exercise of jurisdiction is consistent
with the Constitution and laws of the United States, serving a
summons or filing a waiver of service is also effective, with
respect to claims arising under federal
law, to establish personal jurisdiction over the person of any
defendant who is not subject to the jurisdiction of the courts
of general jurisdiction of any state.
Thus, so long as there are a sufficient number of
nationwide hits to satisfy minimum contacts standards, a federal
district court will have personal jurisdiction over the foreign
website operator. In applying Rule 4(k)(2) to foreign (non-U.S.)
corporations, federal courts have held that "personal jurisdiction
may be asserted by courts where a foreign corporation, through an
act performed elsewhere, causes an effect in the United States."
Similarly, where American residents have been intentionally solicited
or targeted by the allegedly tortious conduct and there are sufficient
contacts overall with the United States, a court may find that the
exercise of personal jurisdiction would not offend the minimum contacts
requirement of due process even where the conduct that proximately
causes the injury occurs outside this country's borders.
A U.S. federal court could determine that the invitation
from the operator of U.K. website to U.S. users to download [the
infringing material] is an act causing an effect (creation of infringing
copies) in the United States.
15 Cardozo Arts & Ent. L. J. 153 (1997).
For support, Ginsburg cites Playboy Enterprises v. Chuckleberry
Publ., Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996), a contempt proceeding
relating to the posting of images scanned from "Playmen" magazine
on a web site in Italy:
In order to violate the Injunction, however, Defendant
must distribute the pictorial images within the United States. Defendant
argues that it is merely posting pictorial images on a computer
server in Italy, rather than distributing those images to anyone
within the United States. A computer operator wishing to view these
images must, in effect, transport himself to Italy to view Tattilo's
pictorial displays. The use of the Internet is akin to boarding
a plane, landing in Italy, and purchasing a copy of PLAYMEN magazine,
an activity permitted under Italian law. Thus Defendant argues that
its publication of pictorial images over the Internet cannot be
barred by the Injunction despite the fact that computer operators
can view these pictorial images in the United States.
Once more, I disagree. Defendant has actively solicited
United States customers to its Internet site, and in doing so has
distributed its product within the United States. When a potential
subscriber faxes Ąthe required form to Tattilo, he receives back
via e-mail a password and user name. By this process, Tattilo distributes
its product within the United States.
What do you think of this analysis? Is it consistent
with the jurisdictional principles noted above? Why might the analysis
be different?
[ notes
]
[ pageprints
C
O P Y R I G H T © 2001 R. P O L K W
A G N E R.
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