Internet Law Outline

Who regulates Cyberspace? (bordered regulations on a boarderless entity)
–          International bodies
o   Benefits: uniformity, cons: sovereignty (each place has its own laws)
–          Nations
o   Pros: recognizing boarders, cons: might get it wrong (can suppress good behavior, or enable unsupressable bad behavior)
–          States/municipalities
o   Pros: maps federalism, cons: inconsistent regulation, dormant commerce clause, just like congress: are they qualified?
–          Self-governance
o   Pros: reflects community norms, self-executing = quicker evolution. Cons: may not adeqetly remedy someone who feels personally affected, govs would have to restrain themselves
How do actors know if they are engaging in activity in a state?
Authenticating Geography
–          Users self-report
o   Shipping, or voluntarily
–          TP authentication (internet drivers license)
–          GPS/automatically reported by device
–          IP address analysis
o   ARIN (American registry for internet numbers) gives a range of IP addresses, tells exact IP address
o   Limits:
–          State regulation of the internet is arguably unconstitutional bc of the dormant commerce clause – we don’t know where ppl are when they are logging onto the internet
 
·         Personal Jurisdiction
o   Due process requires that “individuals have ‘fair warning’ that a particular activity may subject them to the jurisdiction of a foreign sovereign.”
o   Purposeful Availment and the Internet
§  Zippo Manufacturing Co. v. Zippo Dot Com, Inc.
·         Facts:  Zippo Manufacturing is a Pennsylvania corporation.  Dot Com is a California corporation that operates an internet website and an internet news service, and has exclusive rights to several websites.  The websites have different subscription levels for its news service.  Dot Com's contacts with Pennsylvania occur almost exclusively over the internet.  Dot Com entered into agreements with 7 ISPs in Pennsylvania to permit subscribers access to the news service.
·         Issue: Did Dot Com meet the minimum contacts standard in the State of Pennsylvania to subject itself to the state's jurisdiction.
·          Holding: Yes, Dot Com is subject to the jurisdiction of Pennsylvania because it meets the minimum contacts standard.
·         Rule of Law: Minimum contacts with regards to the internet.
·         Reasoning/Rationale: The court ruled that Dot Com availed itself to the jurisdiction of Pennsylvania because it had 7 ISPs in the state and actively conducted business there through its website.  Dot Com had sold passwords to 3000 people in the state of Pennsylvania and entered into 7 contracts with ISPs in the state.  The argument that the subscribers in Pennsylvania were fortuitous was rejected because Dot Com processed and accepted applicants from the state.  The argument that they did not have enough contacts in Pennsylvania was rejected as well, because the court has ruled previously that even one contact can be enough.  The burden to defend the suit in Pennsylvania was also not excessive.
·         Comments: Solely having an internet site available to a jurisdiction does not make you subject to their jurisdiction; you must do something specifically targeting that area.  In this case they had 3000 people whose applications they reviewed from Penn. And accepted as well as 7 ISPs they contacted with.
§  Overall Zippo Rule – Sliding Scale
·         Simply having contacts in a state is not enough.
·         Must do something targeted at the state specifically to allow for PJ.
·         Three Part Test
o    Purposeful direction
o   A forum related claim
o   Fairness
§  ALS Scan, Inc. v. Digital Service Consultants, Inc.
·          A state has jurisdiction over a party when that party directs electronic activity within the state for the purpose of engaging in business, and that engagement would establish a cause of action for a person within the state.
·          Merely placing information on the internet that is viewable for all will not establish personal jurisdiction.
§  Toys R’ Us, Inc. v. Step Two
·         Facts: Toys R’ Us sued Step Two, a Spanish company, for the use of the name and the trademark IMAGINARIUM. At first glance, Step Two appears to have neither systematic nor specific contacts with the U.S.  Its website is in Spanish, it's designed for Spanish users and orders are only accepted in Spanish currency.  The site states that goods can only be shipped within Spain.  Toys made two trap sales – employees (with Hispanic surnames) placed orders from the U.S. which were fulfilled.
·         Issue: Did the U.S. District Court have personal jurisdiction over Step Two?
·         Rule of Law: Minimum contacts and purposeful availment
·         Holding: The case was remanded down for full discovery on the contacts of Step Two.  The two “trap” sales were not enough to confer jurisdiction, but the court stated that discovery needed to occur to see if their contacts with suppliers and the owner visiting toy shows in the US were enough to confer jurisdiction either under general personal jurisdiction or the Federal Long Arm Statute
·         Rationale: The court focused too much on the internet aspects alone.  While Step Two did nothing to specifically target NJ or the US, their other non-internet contacts could possibly confer jurisdiction.  Furthermore, attempting to manufacture can be a negative.
o   Establishing Jurisdiction
§  Even if personal jurisdiction is proper, is judgment enforceable?
§  General jurisdiction?
·         Physical presence or “systematic and continuous contacts”
§  If no, did defendant consent?
·         If no, specific jurisdiction needs to be established.
§  Does state long-arm statute confer jurisdiction?
§  If yes, does jurisdiction satisfy Constitutional Due Process?
·         Alternative tests:
o   Minimum Contacts
§  Purposeful availment
o   Comport with traditional notions of fair play and substantial justice
·         Calder “Effects Test”
o   Intentional acts;
o   Expressly aimed at the forum state; and
o   Causing harm, the brunt of which is suffered – and which the defendant knows is likely to be suffered – in the forum state.
·         In rem
o   Advising a client to set up a website (trying to limit exposure outside the state)
§  Statements to the effect that that only serve NC
§  Use local tele number
§  Choice of forum/law
§  Only ship to NC residences
§  Drop down menus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
A.        Internet K Law Overview
 
1.       Sources of Internet K law
a.       UCC article 2=sale of goods
b.      Common law=everything else
c.       UCITA failed uniform law
                                       i.            Designed to remove ambiguity of what laws apply to the internet
d.      ALI
                                       i.            Passed principle of the laws of software contracts
2.       What K law applies to the internet?
a.       UCC and Common law
                                       i.            Mostly UCC
3.       4 main components of K law
a.       Formation
b.      Interpretation
c.       Defenses
d.      Remedies
4.       Changes in K law
a.       Standardized agreements are likely to be deemed unconscionable
b.      Statute of Frauds doesn’t apply to internet K
c.       K's with electronic signature are deemed to be effective
d.      Parol Evidence more effective
5.       K  formation online
a.       Party assents to a k when they objectively manifests an intent to be bound through overt acts/ words
6.       Contract Law requires mutual manifestation of assent
a.       Websites will usually try to manufacture assent which is ambiguous in nature
b.      Even when they agree
                                       i.            Presumption they do not actually agree
                                     ii.            1% of users actually read the k
                                    iii.            Users regret their choices
7.       Problems w/ online K's
a.       Users don’t take unambiguous actions
b.      Don’t believe even if they do that they actually meant to
8.       Best way to obtain online assent
a.       Mandatory non-leaky click through agreement
                                       i.            Mandatory= everyone goes through the process
                                     ii.            Non leaky= no bypass