Internet Jurisdiction:Where Are We Now?
John D. GregoryToronto Computer Lawyers’ Group
November 24, 2005
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Internet Jurisdiction “Cyberspace is not a no-law land” Finding jurisdiction
What the tribunals do Managing jurisdiction
What private parties do Indirect jurisdiction
Reintermediation Legislated jurisdiction Now what?
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Finding Jurisdiction Finding jurisdiction
Making the case When does a decision-making body take jurisdiction?
Enforcing the result What difference does it make if a decision cannot be
enforced? Civil, regulatory and criminal actions Choice of forum vs choice of law
Here: mainly forum, law assumed to go with it e.g. “normal” contract clauses here illegal elsewhere
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Finding Jurisdiction Making the case: civil Background:
Jurisdiction arising out of service ex juris
Morguard shift: real and substantial connection – the Canadian standard
Hunt: Morguard is constitutional rule Beals: Morguard is international rule
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Finding Jurisdiction Muscutt v. Courcelles (2002), 60 O.R. (3d) 20
Factors for a Real and Substantial Connection“no factor is determinative”
Connection between forum and P’s claim Connection between forum and D Unfairness to D in assuming jurisdiction Unfairness to P in refusing jurisdiction Involvement of other parties to suit Court’s willingness to enforce extraprov jgt on same
ground Interprovincial or international case Comity and standards of jurisdiction, recognition and
enforcement prevailing elsewhere
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Finding Jurisdiction Internet jurisdiction – history
“Availment” test – Compuserve (US) Active/passive test – Zippo (US),
Braintech (Canada) Targeting test – effects test (how
subjective?) Real and substantial connection test
Different law: different applications?
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Finding Jurisdiction Defamation – the most visible test Ontario: Bangoura (C.A.)
Law: Muscutt factors evaluated one by one
Policy: do not expose publishers to worldwide liability
Fact: Connection was a problem Plaintiff came to Ontario after publication
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Finding Jurisdiction Defamation: BC: Burke (BCSC) Law: based on Bangoura motion
judge Law: balance factors of convenience
Witnesses, travel Policy: protect reputation where it is
affected Fact: P had real connection to B.C.
D should have known wide reach on Net
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Finding Jurisdiction Defamation: Australia: Gutnick (HC) Law: no new principles expressed Policy: protect reputation where P was. Policy: did not expose publisher to
worldwide liability, just where damage done
Fact: Guttnick had reputation in Victoria Barron’s had 1700 Australian subscribers
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Finding Jurisdiction Defamation: UK: Lewis v King (CA 2004)
Law: no new principles agreed that P was defamed in the UK
and had a reputation there Limit claim to harm done in forum Not only one action therefore one forum
May be multiple actions in many jurisdictions Not a “free-for-all” for claimants libelled on
Net
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Finding JurisdictionLewis v King (2) Targeting theory disapproved
“in truth [the publisher] has targeted every jurisdiction where his text may be downloaded.”
Targeting is too subjective, leads to uncertainty
Connecting factors are not legal rules “juridical advantage” vs “substantial
justice”
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Finding Jurisdiction Non-defamation actions
“targeting” more attractive with voluntary connection on both sides
Strategic litigation Take advantage of local laws by
initiating suit (no different from offline world?)
E.g. Cairo v CMS (Calif.) web scraper brought pre-emptive suit
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Finding Jurisdiction Trade mark litigation
Trade marks are national, web and web addresses are international
Courts in forum of issuer of trade mark tend to take the cases (e.g. Google ads)
Patent litigation Again national law vs international trade RIM v NTP: enforcement of national patent
against foreign (alleged) use of the patent? Should US court do that? Should patent extend so
far?
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Finding Jurisdiction Civil jurisdiction: NOTE: jurisdiction “simpliciter” vs
forum (non) conveniens Theory: decide jurisdiction first,
appropriateness afterwards Practice: hard to keep them apart
Lewis v King did pretty strict job but shows difficulty of doing so
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Finding Jurisdiction Making the case: Regulatory law No single rule, no consistent practice Different kinds of connecting factors
sought when state (regulator) is a party, when non-court is tribunal
Creeping real and substantial connection? Different substance to reality?
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Finding Jurisdiction Trendsetter case: Socan (Tariff 22) (SCC 2004) Copyright Appeal Board – rates for
downloaded music held: R&S C between source of music & jdn
Note: NOT location of server Why not? Users can’t know; doesn’t matter in practice But: privacy (Lebel) – intrusiveness of inquiry But: civil standard (divorce!) OK for regulation? Alternatives: Impact? Targeting?
Cf. IcraveTV case in US – jdn taken over Cdn business, activity was not illegal in Canada
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Finding Jurisdiction Regulatory jurisdiction taken: Human Rights Tribunal
Citron v Zundel (CHRC 2002) Server in US, controlling mind (and telecom
network) in Canada Securities commission (Alberta)
World Stock Exchange (1999) No one else to do it Defendants personally in AB, server abroad
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Finding Jurisdiction Regulatory jurisdiction taken (2) Language laws Office de la langue française
Business in QC, targeting QC: easy Server location not relevant Guidelines on web site Success in several court cases
Cf Loi Toubon in France
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Finding Jurisdiction Regulatory jurisdiction declined Privacy Commissioner of Canada
Abika.com (letter Nov 18/05) Parliament did not intend to legislate
extraterritorially Can’t collect evidence from U.S. party No “real and important” link between operations
and Canada Pushing for multilateral and bilateral assistance
Outsourcing to US data processors Can’t keep Cdn companies from doing this Companies here must inform customers
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Finding Jurisdiction Regulatory jurisdiction: open question Taxation
“permanent establishment” question OECD work on location of server
Factors one way or the other Software alone won’t create jurisdiction
General concern about learning of transactions
Sales taxes harder than income taxes Study papers by Canada Revenue Agency: fear?
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Finding Jurisdiction Making the case: criminal law Few extraterritorial criminal laws Traditional tools at investigative stage Extradition to stand trial in offended jurisdiction Impact on residents may draw jurisdiction to
forum High point (US) Granite Gates – gaming
Query: defence of local gaming vs Net? Offensive content cases
Spam: Microsoft vs Canadian spammers Nazi material: Yahoo France – battling courts
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Finding Jurisdiction Enforcing the result: civil cases What is the point of asserting jurisdiction if
results will not be enforced against the wrongdoer?
Basic rule in Canada: Morguard: full faith and credit – enforce from place that takes jurisdiction based on R&S Connection.
Supreme Court ensures integrity of national system Burke court dismissed unenforceability argument So courts take a chance
E.g. Barrick v Lopehandia: injunction in Ontario, hope in “this post-Morguard era” that B.C. would enforce it.
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Finding Jurisdiction For foreign judgments: public policy
defence U.S. example: first amendment vs enforcement
of foreign defamation judgments (lots of cases) Discussed in Lewis v King: not determinative
Muscutt factor: (golden rule) If we take jurisdiction over them and expect them to enforce our judgments, then we will have to enforce judgments that they give based on similar ground of jurisdiction.
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Finding Jurisdiction Enforcing the result: regulatory cases Human rights: Zundel
Hoped that order would encourage local ISPs to block site
Hoped that some respect paid in US Securities Commission: WSE
Defendants were in AB Hoped for impact of message re conduct
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Finding Jurisdiction Enforcing the result: regulatory cases (2) Privacy Commissioner of Canada
Can’t compel appearance of main party Can’t enforce the result Question of best use of limited resources, too?
More of a question for regulators than for courts BUT: any intent inferable from statute? Educational function in Canada Impact is on Canadians i.e. felt here Connecting factors: collection, use, disclosure Wrong-doing is easy to prove without party Comparison of privacy laws would be useful “Prescriptive jurisdiction” vs enforcement power
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Finding Jurisdiction Enforcing the result: criminal cases Little or no direct enforcement of foreign
criminal penalties Trials in absentia are known – absence of
accused/defendant is not fatal to process Combination of forces e.g. “sweeps” of
Internet fraud by regulators in many countries so can lay charges where needed.
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Managing Jurisdiction Private sector action on jurisdiction (and
governmental for itself) ABA/ICC survey (2003/4):
North American businesses much more concerned with jurisdiction than European or Asian business
N.A. businesses expected things to get worse Managing jurisdiction mainly means
avoiding jurisdiction, but may mean submitting to one to avoid others.
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Managing Jurisdiction Managing by law Anti-suit injunctions (more or less effective)
Our courts tell your courts to stay out Restrict by contract the use of site to those in
acceptable places Terms of use to do so: enforceable?
First Canadian click-through case is on point: Rudder v Microsoft
Browsewrap terms: harder to enforce vs good faith party
Local laws with mandatory jurisdiction EU, Quebec, ULCC draft terms on consumer jurisdiction
Works only where some agreement can be alleged, i.e. not for all kinds of law
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Managing Jurisdiction Managing by technology Geolocation – early days
but: NSA patent Sept 2005 – uses and limits Reading of country codes
UNCITRAL: no presumptions from cc:tlds Blocking technology
Chinese lead? Adaptable to commercial uses? Preferred servers
E.g. google, amazon – follow the codes Local proxies for efficiency and law too?
Digital rights management/tech protection measures
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Managing Jurisdiction Managing by practice Registration requirements for access to
web site (accept from “good” places) Credit cards as proxies for location ID Targeting desired markets:
Server location (efficiency, name) Language (exposes to regulation) Domain names, country codes Content appropriate for local interests
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Managing Jurisdiction Managing by practice (2) Virtual communities
Rules and special services for members only Offer online dispute resolution
Delocalizes DR principles Avoids downsides of foreign jurisdictions’ rules May be more efficient too International arbitral awards widely
enforceable (subject to writing requirements) But: no universal method for complex disputes
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Indirect jurisdiction Who is accessible if the primary target
is not? “by indirection find direction out” the reintermediation of the Internet
Not necessarily comfortable for the targeted intermediaries
Sometimes intermediaries are direct targets, sometimes used for evidence, sometimes for pressure on the real targets
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Indirect jurisdiction Communications intermediaries Internet Service Providers
Attempt to hold liable for copyright infringement seems to have failed
Notice-and-takedown vs notice-and-notice Used in search for evidence (subject to privacy)
Pressure to use quasi-public filters to block child pornography sites
Tension between use and statutory protection of ISPs Internet portals
Yahoo France – Nazi materials Yahoo has taken Nazi materials off its service
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Indirect jurisdiction Internet portals (2)
Yahoo.com has agreed to close chat rooms to those under 18 (Oct 2005)
deal with Elliot Spitzer Other portals have closed chat rooms
altogether to avoid child luring Telecoms
Modernization of Investigative Techniques Act (Bill C-74) makes CSPs use techniques that allow interception of data if so ordered, to keep info, to make it available
US – CALEA – frequent pressure to do likewise Cybercrime Convention – source of such ideas
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Indirect jurisdiction Financial intermediaries Credit card companies
Consumer protection: mandatory chargebacks Gaming debts and winnings targeted by law
enforcement Private actions for contributing to gaming
addiction have failed (so far) PayPal
Criminal charges under Patriot Act for facilitating gambling payments (settled by large payment)
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Indirect jurisdiction Financial intermediaries (2) Auction houses (e.g. eBay)
Pressure to decline Nazi memorabilia, other “offensive” items
Babies, etc
Big merchants Use to collect personal information
How much legal pressure needed to extract PI
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Indirect jurisdiction Libraries (in US so far)
Source of information about what people read USA Patriot Act requires secret collaboration
with FBI Child protection statute requires libraries to
filter material not appropriate for minors, on threat of losing federal funding (rule upheld in appeal court)
Not all libraries are complying, but it’s expensive to refuse
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Indirect jurisdiction Transportation companies
Records used by states to see who has been buying out-of-state liquor and tobacco over the Internet
for tax purposes usually
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Legislated jurisdiction Not unique to Cyberspace Not widely successful Probably least important aspect of
jurisdiction these days But watch particular examples
General or special application
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Legislated jurisdiction General application Hague Convention on Choice of Court
Final result of long more ambitious project Attempt to exclude click-through contracts Will enforce choice of forum clauses Far from in force yet NOTE: MANY more conventions (bilateral or
multilateral) on recognition and enforcement of judgments that apply to cases on Cyberspace
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Legislated jurisdiction Cybercrime Convention
and protocol on hate literature (signed by Canada in 2005)
Promotes collection and sharing of information (duties on ISPs)
Uniform Court Jurisdiction and Proceedings Transfer Act (UCJPTA) Aims to codify Morguard R&S C principle
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Legislated jurisdiction UCJPTA – some presumptions of jurisdiction
Rights in real property in forum Contract to be performed in forum Contract expressly chooses forum Contract solicited in forum Tort committed in forum Business carried on in forum Injunction about doing something in forum
Enacted in several provinces (not ON yet)
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Legislated jurisdiction Special application Consumer protection
Quebec, France: cannot prevent consumer from suing in jurisdiction of residence
Treaty of Rome (EU): ditto (and law) Telecommunications Act (Canada)
Amended after Zundel case to ensure that computer network was included in federal jurisdiction over telecom networks
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Legislated jurisdiction Blocking statutes
The other side of the jurisdiction coin Purport to prevent suit within
jurisdiction including cooperation with foreign courts even where would normally do so
Not valid within Canada: Hunt (SCC) Precedents for ignoring their effect on
enforcement when taking jurisdiction (examples in Burke)
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Legislated jurisdiction Legislated harmony of law A way that governments consciously
attempt to avoid problems of diversity of jurisdiction is to harmonize the law applicable across jurisdictions, so that it will not matter whose law applies or what forum will apply it. UNCITRAL Model Laws on Electronic Commerce Template on Internet Sales Harmonization UCJPTA, UECA, UEEA, UETA Many EU Directives on e-this-and-that
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Conclusion (interim) Complexity of
Who wants to connect (assert legal jurisdiction) Connecting factors Reasons to connect Ways to manage – to avoid, to impose
Do not claim to mention all methods or all cases Some foreign examples may be borrowed here in
the future Techniques, technology and reasoning are all
evolving, maybe even legislation Fact + Policy = jurisdiction “Solving Legal Problems in Electronic Government: Jurisdiction,
Regulation, Governance”, (2002), 1 Can Jl of Law and Tech. No 3 p.1http://cjlt.dal.ca/vol1_no3/pdfarticles/gregory.pdf
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