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January10internetjurisdiction

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Internet jurisdiction lecture

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January10internetjurisdiction

  1. 1. Global Information Law and Practice Internet Jurisdiction January 10, 2018 professor michael geist university of ottawa, faculty of law
  2. 2. Jurisdiction Case Study Company A is a Hong Kong-based firm that sells network devices used in complex industrial manufacturing. Several years ago, one of their engineers left the company and began using company trade secrets to sell competing products as Company B. Company A has used the court process to try to stop the competing activities, obtaining a series of court orders requiring that Company B stop the sales of competing products. Company B has regularly ignored the court orders and has proven difficult to shut down. Frustrated by the situation, Company A seeks a court order requiring Google to stop including Company B in its search index for all users. Google objects to the proposed court order. It argues that: (1) It is based in Mountain View, California and should not be subject to Hong Kong jurisdiction. (2) Any potential order should be limited to Hong Kong residents accessing the search index through its Google.hk site. The judge in the case has limited knowledge of the Internet and new technologies. You have been asked to assist in the adjudication of the case. You have been asked to answer the following questions: • Can the court assert jurisdiction over Google? • If it can assert jurisdiction, what limits, if any, should govern the proposed court order?
  3. 3. “Competing Visions”
  4. 4. competing visions of internet law • cyberspace as place • Does it function separately from real space? • Are governments powerless to regulate? • Is this view driven by self-regulation? • cyberspace as nothing new • Is enforcement a concern? • Are spillover effects greater online? • Harmonization? • cyberspace as regulated by technology • If technology regulates, can technology be regulated?
  5. 5. competing visions of online commerce • Whose law should apply in B2C e-commerce transactions? • The Law of the Consumer -- consumers won’t shop online unless they enjoy local protections • The Law of the Seller -- businesses won’t sell unless they enjoy legal certainty and limited liability
  6. 6. competing visions of the role of courts • When should a court be entitled to assert jurisdiction over online activity? • Contracts with local consumers • Physical presence in the jurisdiction • Targeting the local jurisdiction via the web • Impact/effect on local jurisdiction • Mere availability of content • Should we differentiate by issue -- is IP different from e- commerce?
  7. 7. competing visions of governments • Hands on vs. Hands off the Internet • Limits of regulatory reach – Domestic rules – Global rules • Appropriate Forum
  8. 8. “Borderless Internet”
  9. 9. <1>
  10. 10. Countries could assert jurisdiction over foreign- based websites
  11. 11. <2>
  12. 12. Internet borderless – technological solutions viewed as ineffective
  13. 13. <3>
  14. 14. The Passive versus Active Test - U.S. Inset Systems v. Instruction Set (1996) • Massachusetts co. owns Inset.com; Connecticut co. owns trademark • Connecticut co. sues - court must determine jurisdiction • Massachusetts co. with no real presence • Court says Internet like a continuous ad - asserts jurisdiction
  15. 15. The Passive versus Active Test - U.S. Bensusan Restaurants v. King (1996) • Battle of the Blue Notes - NY Jazz club vs. Columbia, MO local club • Court examines Columbia club Web site - no online tickets; just information • No jurisdiction - passive site does not meet level of foreseeability
  16. 16. The Passive versus Active Test - U.S. Zippo v. Zippo Dot Com (1997) • Cigarette lighter manufacturer (Pa.) vs. new Internet company (Cal.) • Zippo Dot Com sells subscriptions to Pa. residents; no real space offices • Court asserts jurisdiction - establishes passive vs. active analytical framework
  17. 17. The Passive versus Active Test - U.S. Zippo v. Zippo Dot Com (1997) PASSIVE SITE • Information only • Little interactivity • Multiple jurisdiction claims not foreseeable • Local site ACTIVE SITE • Full interactivity • E-commerce oriented • Sell or engage with multiple jurisdictions • Global/National orientation
  18. 18. The Passive versus Active Test - Canada Braintech Inc. v. Kostiuk (1999) • B.C. Court of Appeal decision; leave to appeal to SCC denied in March 2000 • Postings on Silicon Investor chat site • Braintech & Kostiuk both BC based • Braintech sues in Texas for defamation • Texas court awards $400,000 • Braintech tries to enforce judgment in BC
  19. 19. The Passive versus Active Test - Canada Braintech Inc. v. Kostiuk (1999) ISSUE - DID TEXAS CORRECT PROPERLY ASSERT JURISDICTION? • BC Court of Appeal says no • Adopts Zippo analysis - chat posting passive in nature • No strong ties to Texas; case should have been brought in BC
  20. 20. The Movement Toward a New Test In Favour of Zippo • Creates limits on Internet jurisdiction • Based on foreseeability -- passive vs. active become proxy for whether jurisdiction was foreseeable • Local laws matter
  21. 21. The Movement Toward a New Test The Problems with Zippo • Passive vs. Active often doesn’t work • Test encourages perverse behaviour by encouraging less interactivity • Passive front end; Active back end • Active sites becoming the norm • Standards are constantly shifting -- test doesn’t provide sufficient certainty
  22. 22. Post-Zippo
  23. 23. The Movement Toward a New Test • GTE New Media Services Inc. v. Bellsouth Corp. (2000) - examine whether residents actually accessed site • People Solutions, Inc. v. People Solutions, Inc., (2000) - must have actual sales to Texas residents • Blakey v. Continental Airlines (2000) - harassment on site caused effects within state • Nissan Motor v. Nissan Computer (2000) - passive site meets effects test
  24. 24. United States Dudnikov v. Chalk & Vermilion (2008) 10th Cir. • eBay power sellers and copyright infringement claim • Purposeful direction test: (a) an intentional action, that was (b) expressly aimed at the forum state, with (c) knowledge that the brunt of the injury would be felt in the forum state (d) whether the plaintiff's injuries 'arise out of' the defendant's contacts with the forum; and (e) that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice
  25. 25. United States Johnson v. Arden (2010) 8th Cir. • Defamatory statement on a review website • Court says Zippo instructive but insufficient : “The website's accessibility in Missouri alone is insufficient to confer personal jurisdiction.” • Adopts effects-based approach
  26. 26. United States Zippo + • Zippo still the starting point for most analysis • Most courts amend by: • Something greater than mere interactivity • Targeting • Effects • Stream of commerce narrowed
  27. 27. Beyond Zippo
  28. 28. Post-Zippo • Bangoura v. Washington Post (ONCA, 2005) • Alleged defamation in Washington Post • Published in U.S.; available online • Target lives in Africa; later moves to Ontario • Ontario lower court asserts jurisdiction -- “moving target” test? • Washington Post’s quantification of risk?
  29. 29. Post-Zippo • Bangoura v. Washington Post (ONCA, 2005) • Appellate decision - overturns lower ct. decision “it was not reasonably foreseeable in January 1997 that Mr. Bangoura would end up as a resident of Ontario three years later. To hold otherwise would mean that a defendant could be sued almost anywhere in the world based upon where a plaintiff may decide to establish his or her residence long after the publication of the defamation."
  30. 30. High Court Cases - Australia • Gutnick v. Dow Jones (HCA, 2002) • Alleged defamation in Barrons (published by DJ) • Published in the U.S.; accessible in print and online in Australia • 1700 online subscribers in Australia; server located in NJ • Case launched in Australia • DJ has customer base (small) in Australia • Court asserts jurisdiction -- High Court rules Australia entitled to hear the case • Case criticized by U.S. interests -- fear publication chill
  31. 31. High Court Cases - Canada Equustek Solutions v. Google • Facts as in our case study • Court issues court order • Asserts jurisdiction over Google • Global court order – applies to full Google search index wherever accessed • Case goes to the Canadian Supreme Court (and is cited in Dr. Yeung, Sau Shing Albert v. Google Inc)
  32. 32. High Court Cases - Canada Equustek Solutions v. Google “The issue in this appeal is whether Google can be ordered, pending a trial, to globally de-index the websites of a company which, in breach of several court orders, is using those websites to unlawfully sell the intellectual property of another company.”
  33. 33. High Court Cases - Canada Equustek Solutions v. Google “The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink’s sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink’s websites, and Canadian purchasers could easily find Datalink’s websites even if those websites were de-indexed on google.ca. Google would still be facilitating Datalink’s breach of the court’s order which had prohibited it from carrying on business on the Internet. There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm.”
  34. 34. High Court Cases - Canada Equustek Solutions v. Google “The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink’s sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink’s websites, and Canadian purchasers could easily find Datalink’s websites even if those websites were de-indexed on google.ca. Google would still be facilitating Datalink’s breach of the court’s order which had prohibited it from carrying on business on the Internet. There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm.”
  35. 35. High Court Cases - Canada Equustek Solutions v. Google “Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction is, with respect, theoretical. As Fenlon J. noted, “Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong” In the absence of an evidentiary foundation, and given Google’s right to seek a rectifying order, it hardly seems equitable to deny Equustek the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible. We are dealing with the Internet after all, and the balance of convenience test has to take full account of its inevitable extraterritorial reach when injunctive relief is being sought against an entity like Google.”
  36. 36. High Court Cases - Canada Equustek Solutions v. Google “I have trouble seeing how this interferes with what Google refers to as its content neutral character. The injunction does not require Google to monitor content on the Internet, nor is it a finding of any sort of liability against Google for facilitating access to the impugned websites. As for the balance of convenience, the only obligation the interlocutory injunction creates is for Google to de-index the Datalink websites. The order is, as Fenlon J. observed, “only a slight expansion on the removal of individual URLs, which Google agreed to do voluntarily”. Even if it could be said that the injunction engages freedom of expression issues, this is far outweighed by the need to prevent the irreparable harm that would result from Google’s facilitating Datalink’s breach of court orders.”
  37. 37. Highest Court Cases - Canada Equustek Solutions v. Google • Where should the onus lie? • If Canada, who else? • U.S. blocking order – threat to free speech? • How to reconcile?
  38. 38. How to Manage Jurisdictional Risk? • Contractual terms • Real and substantial connection • Technological tools (targeting/de-targeting) • Cost of doing business • Risk assessment of liability

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