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In action against Dow Jones & Co. for libel over Internet, Australian High Court rules that tort took place at point where subscribers downloaded it in Victoria State, plaintiff’s work place, thus Victorian defamation law governs and its courts are appropriate fora in which to litigate
Dow Jones & Co., Inc. (Dow) publishes the “Wall Street Journal” newspaper and Barron’s weekly print magazine. It is a Delaware corporation with its World Wide Web servers in New Jersey and its editorial offices in New York. For the last six years, Dow Jones has run WSJ.com, a subscription news site on the Web. It includes Barron’s Online where it publishes the text and pictures set forth in the current Barron’s magazine.
The Web enables a document to be stored in such a way on one computer connected to the Internet (the web server) that a person using another computer linked to the Internet (a web browser) can ask for and get an electronic copy of the document. A collection of documents or “web pages” is usually called a “web site.”
The originator of a document wishing to make it available on the World Wide Web has it placed in a storage area managed by a web server by “uploading” it. A stranger wishing to get hold of that document has to send a request to the relevant server, identifying the location of the originator’s web page by its “uniform resource locator (URL).” When the server delivers the requested document to the stranger’s computer, the process is usually referred to as “downloading.”
Barron’s Online for October 28, 2000, and the corresponding edition of Barron’s magazine dated two days later, featured an article entitled “Unholy Gains.” It referred several times to Mr. Joseph Gutnick, as allegedly involved in money laundering. Gutnick (plaintiff) lives in Victoria, Australia and has his business headquarters there.
He sued Dow in the Supreme Court of Victoria for libel. Plaintiff had the original process served on Dow outside Australia without leave of court under Victoria’s civil procedure rules. Dow made a conditional appearance. It then moved the Court either to set aside the service and complaint or to permanently stay further proceedings on the grounds of forum non conveniens. The plaintiff countered by insisting that his suit seeks only to have the courts of Victoria neutralize and repair Dow’s attack on his good Victorian reputation.
The trial court dismissed Dow’s application. The judge found that defendant had published its allegedly libelous statements in the State of Victoria when Dow fee subscribers had used their passwords to download the material in that State. This finding is central to resolving questions of jurisdiction, choice of law, and forum non conveniens in this litigation.
After Victoria’s Court of Appeal had denied Dow leave to appeal to it, Dow got special leave to obtain review by the High Court of Australia. That Court, however, unanimously dismisses Dow’s appeal.
Both sides agreed about two main principles of Australian law. First, an Australian court, whose jurisdiction a plaintiff has validly invoked, whether by personal service or “long-arm” statute, will forego the exercise of this jurisdiction on the grounds of forum non conveniens only if the plaintiff has chosen a clearly inappropriate forum.
Secondly, in trying a tort action in which the parties or the events have some links to a foreign jurisdiction, an Australian court will apply the lex loci delicti as the applicable law. As a result, the parties’ arguments centered on determining the relevant place in which Dow had published the alleged libels to third parties. Dow insisted that this situs was New Jersey while plaintiff pointed to Victoria as the locus delicti. From the latter proposition, plaintiff reasoned that Victoria was an appropriate forum.
The High Court preliminarily points to the general rationale underlying the law of defamation. “…[T]he law of defamation seeks to strike a balance between, on the one hand, society’s interest in freedom of speech and the free exchange of information and ideas … and, on the other hand, an individual’s interest in maintaining his or her reputation in society free from unwarranted slur or damage.”
“The way in which those interests are balanced differs from society to society. … [C]omparing the law of defamation in different countries can reveal differences going well beyond matters of detail lying at the edge of debate.” [Slip op. 14-15] Thus, the choice of the applicable law may substantially affect the outcome of a multistate case.
Under Australian law, for example, defamation is a tort of strict liability. A defendant may be liable even though no injury to plaintiff’s reputation was intended and reasonable care was taken. Moreover, defamation is bilateral. A party who may have spoken or written a statement defaming X does not commit the tort until it is “published,” that is, until one or more third parties understandingly hears or reads the statement. The Court notes that about 27 U.S. States, including California, Illinois, New York, Pennsylvania and Texas, by legislation (see The Uniform Single Publication Act of 1952) or by judicial decision, have adopted the so-called “single publication” rule in the defamation sector. Section 577A of the Restatement of Torts 2d (1977) sets out an American version of that doctrine. It provides in part that “(2) A single communication heard at the same time by two or more third persons is a single publication. (3) Any one edition of a book or newspaper, or any one radio or television broadcast, exhibition of a motion picture or similar aggregate communication is a single publication.”
“It was not until the middle of the twentieth century and the advent of widely disseminated mass media of communication (radio and nationally distributed newspapers and magazines) that choice-of-law problems were identified. In some cases, the law of the forum was applied without any explicit recognition of the possible application of some other law.”
“But then, by a process of what was understood as logical extension of the single publication rule, the choice of law to be applied came to be understood [in the U.S.] as largely affected by, perhaps even to be determined by, the proposition that only one action could be brought in respect of the alleged defamation, and that the place of publication was where the person publishing the words had acted.” [Slip op. 24-25]
The present Court, however, finds analytical problems with this approach. “For present purposes, what it is important to notice is that what began as a term describing a rule that all causes of action for widely circulated defamation should be litigated in one trial, and that each publication need not be separately pleaded and proved, came to be understood as affecting, even determining, the choice of law to be applied in deciding the action. To reason in that way confuses two separate questions: one about how to prevent multiplicity of suits and vexation of parties, and the other about what law must be applied to determine substantive questions arising in an action in which there are foreign elements.” [Slip op. 26]
The Court concludes that the global reach of the Internet does not require a novel legal approach. “It must be recognised … that satellite broadcasting now permits very wide dissemination of radio and television and it may, therefore, be doubted that it is right to say that the World Wide Web has a uniquely broad reach. It is no more or less ubiquitous than some television services.”
“In the end, pointing to the breadth or depth of reach of particular forms of communication may tend to obscure one basic fact. However broad may be the reach of any particular means of communication, those who make information accessible by a particular method do so knowing of the reach that their information may have. In particular, those who post information on the World Wide Web do so knowing that the information they make available is available to all and sundry without any geographic restriction.” [Slip op. 30-31]
“Other territorial connections may also be identified. In the present case, Dow Jones began the process of making material available at WSJ.com by transmitting it from a computer located in New York city. For all that is known, the author of the article may have composed it in another State. Dow Jones is a Delaware corporation. Consideration has been given to these and indeed other bases of territorial connection in identifying the law that might properly be held to govern an action for defamation where the applicable choice of law rule was what came to be known as the proper law of the tort.” [Slip op. 31-32]
“Australian common law choice-of-law rules do not require locating the place of publication of defamatory material as being necessarily, and only, the place of the publisher’s conduct (in this case, being Dow Jones’ uploading the allegedly defamatory material onto its servers in New Jersey).” [Slip op. 32]
“In defamation, the same considerations that require rejection of locating the tort by reference only to the publisher’s conduct, lead to the conclusion that, ordinarily, defamation is to be located at the place where the damage to reputation occurs.”
“Ordinarily that will be where the material which is alleged to be defamatory is available in comprehensible form assuming, of course, that the person defamed has in that place a reputation which is thereby damaged. It is only when the material is in comprehensible form that the damage to reputation is done and it is damage to reputation which is the principal focus of defamation, not any quality of the defendant’s conduct.”
“In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done. Ordinarily then, that will be the place where the tort of defamation is committed.” [Slip op. 34]
Dow also seeks a stay of proceedings, contending that Victoria is clearly an inconvenient forum in which to litigate plaintiff’s claims. Rule 7.01(1) of the Victorian Rules provide that: “(1) Originating process may be served out of Australia without order of the Court where – (j) the proceeding is brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring.”
“Dow Jones contended that Victoria was a clearly inappropriate forum because the substantive issues to be tried would be governed by the laws of one of the States of the United States. … Dow Jones submitted that the defamation had occurred in New Jersey and that the substantive issues in the proceeding were, therefore, to be governed by the law of that State.”
“As has been noted earlier, Mr Gutnick has sought to confine his claim in the Supreme Court of Victoria to the damage he alleges was caused to his reputation in Victoria as a consequence of the publication that occurred in that State. The place of commission of the tort for which Mr Gutnick sues is then readily located as Victoria. …”
“It follows, of course, that substantive issues arising in the action would fall to be determined according to the law of Victoria. But it also follows that Mr Gutnick’s claim was thereafter a claim for damages for a tort committed in Victoria, not a claim for damages for a tort committed outside the jurisdiction. There is no reason to conclude that the primary judge erred in the exercise of his discretion to refuse to stay the proceeding.” [Slip op. 36-37]
“Finally, … the spectre which Dow Jones sought to conjure up in the present appeal, of a publisher forced to consider every article it publishes on the World Wide Web against the defamation laws of every country from Afghanistan to Zimbabwe is seen to be unreal when it is recalled that, in all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person may resort.” [Slip op. 41]
Citation: Dow Jones & Co., Inc. v. Gutnick, [2002] H.C.A. 56 (Aust. High Ct., December 10, 2002).
Filed in: 2002 International Law Update, Issue 12
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In an in rem action by U.S. toy manufacturer against several internet domain names for using its trademarks without authorization, Second Circuit explains jurisdictional grant in Anticybersquatting Consumer Protection Act of 1999 (ACPA) requiring action in judicial district of domain registrar, noting that this also satisfies international comity when applied to Australian domain registrant
Mattel is a large U.S. toy manufacturer using a variety of trademarked names for its toys, including “Barbie,” “Hot Wheels,” and “Matchbox.” Objecting to using the names of its toys in 57 internet domain names, Mattel brought a federal in rem action against the domain names under ACPA [15 U.S.C.S. Section 1125(d)] in the Southern District of New York. The contested domain names include “captainbarbie.com,” “barbie-club.com,” “matchboxonline.com,” and “casinohotwheel.com.” Defendant(s) had registered the 57 domain names through various domain registrars in Maryland, Virginia, New York, and California.
In cases where a federal court cannot secure personal jurisdiction over a defendant, ACPA permits the owner of a mark to bring an in rem action against a domain name that “violates any right of the owner of a mark registered in the Patent and Trademark Office, or protected under subsection (a) or (c) of this section.” [15 U.S.C. Section 1125(d)(2)(A)(I)]
The district court dismissed Mattel’s action because the domain names at issue were not registered within the district, and the court thus lacked in rem jurisdiction. Mattel appealed the dismissal.
The U.S. Court of Appeals for the Second Circuit affirms. It holds (1) that subsection (d)(2)(A) of the ACPA provides for in rem jurisdiction only in the judicial district in which the registrar, registry, or other domain-name authority that registered or assigned the disputed domain name is located, and (2) that subsection (d)(2)(C) odes not provide an additional basis for in rem jurisdiction.
The Court explains: “The issue of in rem jurisdiction, which is one of first impression in this Circuit, presents greater complexities. The ACPA, under 15 U.S.C. Section 1125(d)(1), allows a trademark owner to pursue an in personam civil action against an alleged trademark infringer. If the court finds that in personam jurisdiction is not available or that the infringer cannot be located, Section 1125(d)(2) allows the trademark owner to proceed against the domain name itself. Id. Section 1125(d)(2)(A)(ii). This in rem jurisdiction was provided in part to address the situation where ‘a non-U.S. resident cybersquats on a domain name that infringes upon a U.S. trademark.’145 Cong. Rec. H10, 823, H10, 826 (Oct. 26, 1999) …”
“The registrant of captainbarbie.com is an Australian entity over which Mattel alleged in its complaint (and the district court apparently found) that Mattel was ‘unable to obtain personal jurisdiction.’ Consequently, Mattel sought to obtain in rem jurisdiction over captainbarbie.com pursuant to Section 1125(d)(2)(A)(ii)(I). Because the parties effectively agree that in rem jurisdiction is available in some judicial district within the United States, we turn to the question of whether the Southern District of New York is a proper judicial district for entertaining this in rem action.” [Slip op. 14-15]
The Court notes (but does not decide) that there is an issue of whether an internet domain registration may be enough, by itself, to establish personal jurisdiction in that district. Other courts have expressly or tacitly found that ACPA plaintiffs could not obtain personal jurisdiction over non-U.S. persons or entities whose only contact with the United States was registering a domain name here. The Court further notes during his analysis of ACPA’s legislative history that Congress plainly sought to allay any concerns that ACPA’s in rem jurisdiction might offend due process or principles of international comity.
“‘This type of in rem jurisdiction still requires a nexus based upon a U.S. registry or registrar [that] would not offend international comity … Finally, this jurisdiction does not offend due process, since the property, and only the property is the subject of the jurisdiction, not other substantive personal rights of any individual defendant.’H.R. Rep. No. 106-412, at 14 (1999).” [Slip op. 24]
Thus, Congress considered the “registry or registrar” to provide a “nexus” for in rem jurisdiction under the ACPA. Thus, it is the presence of the domain name itself (“the property”) in the judicial district in which the registry or registrar is located that provides the basis for the in rem action and satisfies due process and international comity.
As the Court concludes: “In sum, we hold that the ACPA’s basic in rem jurisdictional grant, contained in subsection (d)(2)(A), contemplates exclusively a judicial district within which the registrar or other domain-name authority is located. A plaintiff must initiate an in rem action by filing a complaint in that judicial district and no other. Upon receiving proper written notification that the complaint has been filed, the domain-name authority must deposit with the court documentation ‘sufficient to establish the court’s control and authority regarding the disposition of … the domain name,’ as required by subsection (d)(2)(D).”
“This combination of filing and depositing rules encompasses the basic, mandatory procedure for bringing and maintaining an in rem action under the ACPA. Subsection (d)(2)(C) contributes to this scheme by descriptively summarizing the domain name’s legal situs as established and defined in the procedures set forth in subsections (d)(2)(A) and (d)(2)(D). Accordingly, we affirm the district court’s conclusion that it did not have in rem jurisdiction over the Domain Names in this action.” [Slip op. 35-36]
Citation: Mattel, Inc. v. Barbie-Club.com, 2002 WL 31478839, No. 01-7680 (2d Cir. November 7, 2002).
Filed in: 2002 International Law Update, Issue 11
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In “cybersquatting” case involving internet domain names, First Circuit holds that U.S.’s Anticybersquatting Consumer Protection Act grants federal courts jurisdiction to override findings of World Intellectual Property Organization (WIPO) dispute resolution policy
This case raises an important issue of first impression, namely, whether a domain name registrant who lost in a World Intellectual Property Organization (WIPO) proceeding pursuant to its Uniform Domain Name Dispute Resolution Policy (UDRP) may challenge this result in federal court. Under 15 U.S.C. Section 1114(2)(D)(v) of the U. S.’s Anticybersquatting Consumer Protection Act (ACPA), it is provided in part that “A domain name registrant … may … file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful …”. Obtaining a judicial declaration that plaintiff did not violate the ACPA and getting an injunction forcing a transfer of the disputed domain name back to him, would seemingly overturn the result of the earlier WIPO proceeding.
[Editorial Note: "Cybersquatting” or "cyberpiracy” or "domain name hijacking” denotes a practice whereby someone buys a particular domain name with the intention of selling it to the trademark holder for profit.]
In August of 1998, one Jay Sallen registered a primary Internet domain name with Network Solutions, Inc. (“NSI”) under the name “corinthians.com.” In addition to being having a New Testament context, “Corinthiao” happens to be the name of a popular and successful soccer franchise in Brazil. One year later, Sallen contacted agents of Corinthians Licenciamentos LTDA (“CL”) of Brazil, the exclusive licensee of Corinthians’ intellectual property. According to Sallen, a number of Brazilians had gotten in touch with him more than once about buying corinthians.com. He had decided, however, that it would be in CL’s best interest to own the domain name. CL responded with a “cease and desist” letter. At some point, Sallen posted biblical material on the corinthians.com website. CL alleges that Sallen had posted this material after he had gotten the “cease and desist” letter. On the other hand, Sallen claims that he had posted this material before any dispute arose over the domain name.
By default, Sallen’s registration agreement is subject to the UDRP. Moreover, the UDRP only applies to allegations advanced by a third-party trademark holder that the registrant of the domain name in question has engaged in “cybersquatting” activity. To decide this controversy, the registrant and the third party submit to an administrative dispute resolution service provider which the Internet Corporation for Assigned Names and Numbers (“ICANN”) has authorized to decide such matters. In order to prevail, the complainant has to establish three elements: (1) that the registrant’s domain name is “identical or confusingly similar to a trademark or service mark in which the complainant has rights;” (2) that the registrant lacks any rights or legitimate interests in the trademarked name; and (3) that the registrant has registered and used the domain name in bad faith.
On May 18, 2000, CL filed a complaint with the WIPO, alleging the above three elements. The WIPO concluded (1) that “Corinthians” and “Corinthiao” are phonetically nearly identical, (2) that Sallen did not use or prepare to use the domain name in connection with a genuine and authentic offering of goods or services before he received the “cease and desist” letter, and (3) that Sallen was not “making a legitimate noncommercial or fair use of the domain name without intent for commercial gain or to misleadingly divert customers.” Finally, the panel declared that Sallen had bought the domain name in bad faith. It thus ordered the transfer of the ownership of corinthians.com to CL.
Sallen next filed a complaint in federal court, seeking a judicial declaration that his registration and use of corinthians.com was not impermissible under the ACPA. Sallen further tried to show that he was entitled to retain ownership of the disputed domain name. CL moved to dismiss Sallen’s claim, arguing that the district court lacked subject matter jurisdiction because Sallen requested a declaration of his rights under the ACPA despite the absence of CL’s intent to sue. The district court agreed that, without the threat of suit, there was no “case or controversy,” and thus no federal jurisdiction. Sallen appealed.
The U.S. Court of Appeals for the First Circuit reverses. The Court finds that there clearly is federal jurisdiction over these claims. CL argued that, although Sallen had notified CL of his claims, “Corinthians” is registered only with the Brazilian Institute of Industrial Property, and not as a trademark with the U.S. Patent and Trademark Office (PTO). Since CL is not a “mark holder”, Sallen subsequently failed to satisfy his obligation under 1114(2)(D)(v) to notify the “mark holder.” The Court rejects CL’s argument. CL appears to have engaged in the very practice of “reverse domain name hijacking” that subsection (D)(iv) seeks to discourage. The purpose of subsection (D)(iv) is to ensure that trademark holders do not abuse anti-cybersquatting provisions to take domain names from non-infringing, rightful registrants.
In the ACPA, Congress has in fact provided a cause of action to override UDRP decisions. Under Section 1114(2)(D)(v), registrants such as Sallen have an affirmative cause of action to recover domain names lost in UDRP proceedings. The statute clearly states that a registrant whose domain name has been “suspended, disabled, or transferred” may bring an action for a declaration that the registrant is not in violation of the Act, and for an injunction returning the domain name. Therefore, the Court reverses and remands the case for a determination according to ACPA.
Citation: Sallen v. Corinthians Licenciamentos Ltda., 273 F.3d 14 (1st Cir. 2001).
Filed in: 2002 International Law Update, Issue 1
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German High Court issues significant decision regarding interest in domain names, finding that Shell oil company may require individual named Shell not to use domain name “www.shell.de”
On November 22, 2001, the German High Court (Bundesgerichtshof, BGH) decided that the right to an internet domain name may be determined by balancing the opposing parties’ interests, with public interest factors.
The dispute before the Court involved the internet domain name “www.shell.de.” The German subsidiary of Shell, Deutsche Shell GmbH (hereinafter Deutsche Shell), tried to register the domain name in May 1996 and found out that another company had already registered it. The company routinely registers proprietary company names and later offers to sell those names to the companies concerned. Shell refused to buy the domain name from that company. The original registrant then transferred title to the domain name to an individual name “Andreas Shell” who runs a part-time translation and information business.
Deutsche Shell brought an action before the District Court in Munich (Landgericht Munchen) for an order that Andreas Shell stop using the domain name and transfer its ownership to Deutsche Shell. The District Court, and on appeal the State Supreme Court (Oberlandesgericht Munchen) agreed with Shell, finding that the defendant’s use of “www.shell.de” violated the right to use one’s name under Section 12 of the Civil Code (BGB). Based on Shell’s importance in the business world, anybody accessing that domain name would expect to find the Shell oil company, not the homepage of an unknown person called “Shell.”
On further appeal, the Civil Chamber of the German High Court basically agrees with the lower courts, finding that Deutsche Shell may require someone using an internet domain name incorporating its name to cease such use. The use of “www.shell.de” violates the right to use one’s name, even if it is for personal use (as in this case). The Court explains that such a domain name can only be given out once. The defendant appropriated that domain name, however, and thus deprived Deutsche Shell of the opportunity to inform the public about its company in a direct and simple way. Many users search for companies in the internet by looking at the domain name, assuming that the domain name reflects the company name.
An individual such as Mr. Shell in this case, however, may use his own name for an internet domain name. If several parties claim a right to use a specific domain name, then their respective interests must be weighed. To determine priority in such a case, the normal rule of justice is “first come, first served.” This applies even if one party is much better known than the others. Nor is it relevant whether the intended use is business or personal.
In this case, however, the parties’ respective interests and their importance is so strikingly different that the Court does not apply the “first come, first served” rule. If two parties have the same name, they should use an additional term to avoid confusion among internet users. In this case, there is the very well known trade name “Shell” and many internet users would expect to find that company’s website at “www.shell.de.” Friends and family of Mr. Andreas Shell, on the other hand, would not expect to find his personal homepage at “www.shell.de.”
Thus, Deutsche Shell may require the defendant to stop using that domain name. The prevailing party in this type of case, however, cannot require the ownership of a disputed domain name to be transferred to it because there may be a third party out there who has an even stronger interest in owning that name.
Citation: Bundesgerichtshof (BGH), I. Zivilsenat, Urteil vom 22. November 2001 – I ZR 138/99; Press Release “Mitteilung der Pressestelle Nr. 87/2001″ (November 23, 2001).
Filed in: 2001 International Law Update, Issue12
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Council of Europe opens international cybercrime convention for signature, twenty-six member states and four non-member states sign it, including Canada and the U.S.
On November 23, 2001, the Council of Europe opened the international Convention on Cybercrime (ETS No. 185) for signature. Twenty-six member states of the Council, and four non-member states (Canada, Japan, South Africa and the U.S.), signed the Convention that day at the Hungarian Parliament in Budapest. The Convention will enter into force once it has been ratified by five states, three of which must be states belonging to the Council of Europe.
The Convention provides an international framework for combating computer crimes, especially terrorist acts. It defines crimes committed through new technologies such as spreading viruses, virtual fraud and forgery, distribution of child pornography, and infringing intellectual property rights. It also provides methods for criminal investigations and prosecutions, and lays out methods for international cooperation and communication.
For example, Article 2 on Illegal access provides: “[e]ach Party shall adopt such legislative and other measures as may be necessary to establish as criminal offences under its domestic law, when committed intentionally, the access to the whole or any part of a computer system without right. A Party may require that the offence be committed by infringing security measures, with the intent of obtaining computer data or other dishonest intent, or in relation to a computer system that is connected to another computer system.”
With respect to System Interference, Article 5 states: “Each Party shall adopt such legislative and other measures as may be necessary to establish as criminal offences under its domestic law, when committed intentionally, the serious hindering without right of the functioning of a computer system by inputting, transmitting, damaging, deleting, deteriorating, altering or suppressing computer data.”
In Article 15, the Convention provides for Conditions and safeguards. Paragraph 1 of the Article, for instance, provides as follows: “Each Party shall ensure that the establishment, implementation and application of the powers and procedures provided for in this Section are subject to conditions and safeguards provided for under its domestic law, which shall provide for the adequate protection of human rights and liberties, including rights arising pursuant to obligations it has undertaken under the 1950 Council of Europe Convention for the Protection of Human Rights and Fundamental Freedoms, the 1966 United Nations International Covenant on Civil and Political Rights, and other applicable international human rights instruments, and which shall incorporate the principle of proportionality.”
Other general topics covered by the proposed Convention include: Title 2 – Computer-related offenses. Under this section, member states have to criminalize the intentional alteration or suppression of computer data for the purpose of procuring an undue economic benefit.
Title 3 – Offenses relating to child pornography. All Member States must make illegal the production and distribution of child pornography. The Convention defines “child pornography” as the depiction of minors (or persons appearing to be minors) taking part in sexually explicit conduct.
Title 4 – Offenses related to infringements of copyright and related rights. Title 4 requires the Member States to properly implement the 1971 Paris Act, the Bern Convention for the Protection of Literary and Artistic Works, the WTO agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the WIPO Copyright Treaty. There is a duty to criminalize any such willful copyright violations carried out on a commercial scale, and by means of a computer system.
Section 2, Title 4 – Search and seizure of stored computer data. Domestic law must authorize competent authorities in each Member State to search computer and data storage systems within its territory, and to “eavesdrop” on electronic data transfer (called “real-time collection of data”) (see Title 5, Articles 20 and 21).
Chapter III, Section 1, Title 1 – General principles relating to international co-operation. The Convention provides for mutual extradition of persons charged with computer-related offenses, as long as the charged crime is punishable in both countries with at least one year imprisonment. In general, the parties are to furnish mutual assistance to the widest extent possible, even in the absence of international assistance treaties.
In the future, the Council will add protocols to the Convention to adapt it to legal and technical developments. At this point, the Council has established a committee of experts to prepare a draft protocol that will criminalize racist and xenophobic propaganda sent out over computer networks.
Citation: Council of Europe Convention on Cybercrime, ETS No. 185; Council of Europe press release 893a(2001) (23 November 2001); text of Convention is available on website of Council of Europe at “www.coe.int.”
Filed in: 2001 International Law Update, Issue12
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Citing First Amendment considerations, California federal court gives summary judgment to Yahoo! in dispute over French judicial restrictions on internet auction of Nazi materials
Yahoo! is a California based internet services provider with an international reach. Yahoo! web pages and services often include auctioneer services, and are available to anyone in a country that is able to access the Yahoo.com website. On April 5, 2000, La Ligue Contre Le Racisme et L’Antisemitisme of France (LICRA) sent a “cease and desist” letter to Yahoo!, alleging that the availability of Nazi and Third Reich-related memorabilia for sale on the Yahoo! website was offensive to French law. LICRA subsequently served Yahoo! with process in California and filed a civil suit against Yahoo! in French Court.
Agreeing with the argument advanced by LICRA, the French Court ordered Yahoo! to (1) eliminate access to any material on the Yahoo.com auction site which offered for sale any Nazi object; (2) eliminate the access of French citizens to web pages on Yahoo.com displaying text, extracts, or quotations from Hitler’s “Mein Kampf” and the so-called “Protocol of the Elders of Zion,” (3) post a warning to French citizens on Yahoo.fr (the Yahoo France link) that any search through Yahoo.com may lead to sites containing material prohibited by the pertinent section of the French Criminal Code, and that such viewing of the prohibited material may result in legal action against the French Internet user; and (4) remove from all browser directories accessible in the French Republic any index headings entitled “negationists” under the heading “Holocaust.”
Additionally, the French Court held that it could retroactively apply damages of 100,000 Euros for each day that Yahoo! failed to comply with the order. In response, Yahoo! asked the French Court to reconsider the terms of the order, claiming that the posting of a warning on Yahoo.fr was the only method technologically possible for Yahoo! to comply with. The French Court reaffirmed its earlier decision upon hearing testimony from an expert witness.
Advancing the claim that the decision of the French Court impermissibly infringed upon its First Amendment rights under the U.S. Constitution, Yahoo! filed a complaint in a California federal court. It sought “…a declaratory judgment that the French Court’s orders are neither cognizable nor enforceable under the laws of the United States.” Defendant LICRA moved to dismiss on the grounds that the U.S. court lacked personal jurisdiction over them. The court denied the motion and Yahoo! now seeks summary judgment.
The court finds that although France reserves its right as a foreign sovereign to pass laws involving the permissibility of Nazi and Third Reich-related paraphernalia within its borders, the U.S. Court cannot force Yahoo! to comply with the judgment of the French Court without severely offending the First Amendment of the U.S. Constitution. The District Court found that it is inconsistent with the U.S. Constitution for another nation to regulate speech by a U.S. resident within the U.S. on the basis that such speech can be accessed by Internet users in the other nation. The court then gave summary judgment to the plaintiff.
Specifically, the District Court took issue with the broad and sweeping nature of phrases included in the French Court’s decision. Particularly, the phrase: “…any other site or service that may be construed as an apology for Nazism or a contesting of Nazi crimes” does not provide Yahoo! with an appropriately definite warning as to what is proscribed. Moreover, wording such as “all necessary measures” creates an impermissible chilling effect for Yahoo!, as it asks the plaintiff to undertake efforts that may censor protected speech.
Defendants also argued that the Court should abstain, on the grounds that the issues raised are substantially the same as those the French court has actually decided. The U.S. court disagrees, however, finding that the plaintiff is not trying to relitigate the French court’s application of French law or its orders concerning Yahoo!’s conduct within the borders of France. On the contrary, the purpose of the proceeding is to determine whether a U.S. court may enforce the French order without betraying the First Amendment.
Furthermore, the content of the French order is viewpoint-based and regulatory, aimed at the plaintiff’s web pages and auction site. Although the order is entitled to deference as an articulation of French law, its content would clearly clash with the First Amendment if mandated or ordered by a U.S. court. Therefore, when asked to enforce a foreign order that effectively chills protected speech that occurs simultaneously within American borders, the Court’s obligation to uphold the First Amendment outweighs the interests of comity.
Finally, Yahoo! demonstrated the existence of (1) an actual controversy and (2) a real and immediate threat to its constitutional rights. In concentrating on the plaintiff’s technological ability to implement the changes, the defendants have failed to show a genuine issue of material fact. The question of whether or not Yahoo! is technologically able to implement the changes set forth by the French Order is irrelevant, and the American court does not reach it.
Citation: Yahoo!, Inc. v. La Ligue Contre le Racisme et L’Antisemitisme, No. C-00-21275 JF (N.D. Ca., November 7, 2001).
Filed in: 2001 International Law Update, Issue12
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In dispute over allegedly defamatory article published in Barrons Magazine, Victoria, Australia, court reviews whether there is jurisdiction based on publication in the internet, whether there is long-arm jurisdiction, and whether Victoria, rather than New Jersey, is an appropriate forum
On October 30, 2000, Barrons Magazine published an article entitled “Unholy Gains: When Stock Promoters Cross Paths with Religious Charities, Investors had Better be on Guard”. The article painted a portrait of a well-known Australian philanthropist, Mr. Joseph Gutnick (hereinafter “plaintiff’), as being the largest customer of a reputed money-launderer. In effect, the article branded Mr. Gutnick as a tax-evader engaged in the misuse of charity funds for the purpose of manipulating stock prices. A few copies of this article were sold over the internet.
Dow Jones & Co. Inc. which also publishes the Wall Street Journal, owns Barrons (“defendant”). Mr. Gutnick sued the defendant on the grounds that the magazine had defamed his character. Defendant filed for a stay of proceeding. The Supreme Court of Victoria, Australia denies this application.
First, both parties agree that the forum for deciding this case should be at the locus delicti. There is a dispute, however, as to where this is. Authors and staff write and edit Articles for the Barrons OnLine Website in New York. A computer translates them and then sends them to six servers in New Jersey where they are made available to the Website. The defendant alleges that the tort in question (the “publication” of the article) therefore took place in New Jersey when the article was loaded onto the website there.
This assertion centers around the logistics of “push-pull”computer technology. “Push” services, such as e-mail applications, take place in the absence of a prerequisite solicitation from the user. “Pull” services occur only when the user has submitted an electronic transmission requesting service. To download the offensive article, a user had to send the qualifying electronic request by clicking on the appropriate button.
On the other hand, the plaintiff maintains that the tort happened in Victoria, Australia when users in Victoria downloaded the article from the Barrons OnLine Website. The Court agrees with this interpretation. It also finds the Victorian long-arm statute applicable because (a) 1,700 prominent subscribers to the website are based out of Victoria; (b) the court can infer that hundreds of these individuals accessed the defamatory article; (c) the plaintiff lives in Victoria and works in Victoria; (d) the plaintiff’s reputation has suffered injury in Victoria; and (e) Victoria is where the plaintiff wishes to vindicate his reputation.
Second, the defendant argued that it did not shoulder responsibility for causing the material to be published in Victoria. The mere act of placing an article on a website does not constitute publication. Moreover, if ‘publication’ did indeed transpire at the time Victorian residents downloaded the material, then the users themselves would be responsible for the “publication,” because the material was obtained as the fruit of their deliberate actions.
The defendant noted the dissimilarity between its system and a radio broadcast because it is likely that a listener would not have explicitly requested exposure to the defamatory rhetoric. In response, the court drew a parallel between this argument and the outrageousness of the same hypothetical radio station claiming that it is not responsible for causing a defamatory broadcast because the listener initially chose to tune the dial to that station, thereby “soliciting” the broadcast.
Third, the court rejected the defendant’s forum non conveniens claim. It rested upon the additional expenses, time consumption, and assorted inconveniences (including the difficulty of producing trial witnesses principally located in the U.S.) during a legal proceeding occurring in Victoria. Also refused under this claim was the defendant’s assertion that its case would fare better under U.S. law. Victorian defamation law presumes falsity and places the burden of proof on the defendant, whereas U.S. law requires the plaintiff to first establish the falsity of the publication. Moreover, the defendant claimed that its American employee created a story that (a) was “indelibly American,” (b) complied with all standards of American journalism, and (c) would prevail under American defamation law.
Finally, the Court points out that shifting the forum to New Jersey would pose just as much of an elevated inconvenience to the plaintiff as holding the proceedings in Victoria would pose to the defendant. Moreover, the question of preferred law is largely irrelevant, as the court is not likely to switch from the application of one nation’s law to another merely to bring about a victory for the defendant. Finally, regardless of the forum, Victorian law would apply because the court has determined that the tortious harm had taken place there.
Citation: Gutnick v. Dow Jones & Co. Inc., Supreme Court of Victoria (Australia), Common Law Division, No. BC200104980, 28 August 2001.
Filed in: 2001 International Law Update, Issue10
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In dispute over Canadian company’s use of Internet domain name “nudescape” on grounds of similarity to AOL’s domain name “netscape,” WIPO Panel does not find such use improper
America Online, Inc. (AOL), the owner of “www.netscape.com,” brought a proceeding pursuant to the Uniform Domain name Dispute Resolution Policy (Policy) against a Canadian company, Media Dial Communications (MDC). The respondent maintains the pornographic websites “www.nudescape.com” and “www.aolfind.com.” AOL alleges that the trademarks “AOL” and “Netscape” were registered years before “aolfind.com” and “nudescape.com,” that it spent millions of dollars to promote these names, and that defendant was infringing its rights. MDC did not respond to AOL’s complaint. The Panel concludes that the domain name “aolfind.com” should be transferred to AOL, but turns down the complaint regarding “nudescape.com.”
AOL claimed that the pornographic website names are confusingly similar to its own domain names, and thus are apt to confuse consumers who might think that AOL or one of its affiliates is providing the pornography. Furthermore, MDC had acted in bad faith by registering the similar domain names years after the original ones had been registered, and then offering to sell them to AOL for $100,000.
As for “aolfind.com,” the single Panelist acknowledges that AOL has acquired a well known and exclusive meaning and that “aolfind.com” misleads Internet users into thinking that it might be affiliated with AOL. Thus, MDC has no right or legitimate interest in the domain name “aolfind.com.”
As for “nudescape.com,” however, the Panelist finds that “Netscape” and “Nudescape” are clearly not identical. “The question arises as to whether Netscape and Nudescape are confusingly similar. In deciding this question, the first issue is whether the two marks sound the same. While there are clearly similarities phonetically, they are not identical and are at best similar. As to the look or type of the two marks, they are dominated to an extent by the work ‘scape’ and the commencing letter ‘N’. … As to the meaning of the two marks, there is however quite a difference. As indicated above, nude has a particular meaning as does net and the two are quite different. Accordingly, while there are similarities in the two marks, there are also important differences.” [Rpt. page 6]
The Panelist next considers whether MDC has “the right to use the words ‘nude’ and ‘scape’ to describe its pornographic services, that is, quite apart from whether AOL also may have rights in these or similar words. It seems to the Panel that there is a reasonably good argument that the Respondent should have a right to use these common English words to describe its pornographic services. Otherwise, parts of the English language would soon be acquired and removed from common use by those wishing to name their business or describe their services.” [Rpt. pages 6 7]
Citation: World Intellectual Property Organization (WIPO), WIPO Arbitration and Mediation Center, Administrative Panel Decision, America Online Inc. v. Medial Dial Communications, Case No. D2001 0799 (August 8, 2001). [Report is available through WIPO website "www.wipo.org."].
Filed in: 2001 International Law Update, Issue9
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German High Court issues two significant decisions on internet domain names, one deciding when domain registrar must cancel registrations and another explaining proper use of generic terms as domain names
On May 17, 2001, the German High Court (Bundesgerichtshof, BGH) issued two fundamental decisions on internet domain names.
The first decision concerns the domain name “www.ambiente.de.” The organization for Frankfurt trade fairs, Messe Frankfurt AG, conducts a regular trade fair for table settings, kitchens and living space called “Ambiente.” A private individual, however, had registered the German internet domain name “www.ambiente.de” and was unwilling to cancel it. Messe Frankfurt sued DENIC, the company that administers German internet domains ending in “.de”, to have the domain name at issue registered in its name. The district court in Frankfurt a.M. agreed with Messe Frankfurt that DENIC should cancel the initial registration and award the domain name to Messe Frankfurt.
The State Supreme Court in Frankfurt reversed, and the German High Court affirms. In the BGH’s view, DENIC merely registers and administers millions of internet domain names but has no duty to review every domain name registration to determine whether it infringes the legal rights of third parties. Even where DENIC is on notice of third party claims, DENIC ordinarily refers the claimant to the registered owner to resolve the dispute. In some cases, a court will have to decide who has a proper claim to a domain name.
German law requires DENIC to unilaterally cancel a domain name registration only where the law violation is obvious. In this case, all that Messe Frankfurt came up with was a statement from the original registrant promising not to use the domain name anymore. Thus, the BGH holds, DENIC did not have conclusive proof that Messe Frankfurt had a proper claim to that domain name.
In the second case, the BGH reviews a dispute over the use of generic terms in an internet domain name. The German language commonly uses the word “Mitwohnzentrale” (office for joint living) to refer to service providers that find roommates to share apartments and houses. An association of 25 such service providers registered the domain name: “www.mitwohnzentrale.de.” The website provided a listing of the member offices according to city. A competing association with 40 members challenged the domain name registration. It claimed that registrant was using a generic word misleadingly to attract users to its individual website although users would normally expect to find there a list of many such service providers.
The competing association’s claim was successful in the Hamburg district court. The Hamburg State Supreme Court affirms, considering the use of a generic word a violation of the German Law Against Unfair Competition (UWG), Section 1 (improper acts). The German High Court, however, reverses and remands to the State Supreme Court.
The BGH first points out that generic terms cannot be registered as trade names (Freihaltebedürfnis). Nevertheless, it finds that the use of a generic word does not necessarily violate competition rules. Such a violation occurs only where the advertising party interferes with the customer relationship by imposing itself on the customers of a competitor.
In this case, the registrant did achieve a competitive advantage but without foisting itself on these customers. In the Court’s view, this did not constitute the improper use of a generic word as a trade name or service mark. Both parties may use the term “Mitwohnzentrale,” and internet users generally understand that their search results are, to a substantial degree, haphazard and random.
On the other hand, German law does limit the use of generic terms in internet domain names. For example, it would be improper if the registrant used a generic term for a top level domain (such as “.de”) and blocked the use in other domains (such as “.com”) or the use of alternative spellings of the generic term. Since the use of generic terms must not be misleading in fact, there is a question here which the BGH remands to the State Supreme Court for determination. If the State Supreme Court does conclude that the domain name is in fact misleading, it may, for example, require that the website also refer the user to other service providers.
Citation: Press release of German High Court -Bundesgerichtshof, Mitteilung der Pressestelle Nr. 42/2001, 18. Mai 2001 (Urteil des Bundesgerichtshofes vom 17. Mai 2001 – I ZR 251/99 & I ZR 216/99).
Filed in: 2001 International Law Update, Issue6
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Two German courts find acquisition of internet domains using names of unrelated companies improper since profit is sole motive
Two German court opinions have addressed the phenomenon where individuals purchase internet domain names of companies, such as www.acme.com, to later sell them to the company at a high price. Similar purchases had occurred even before the internet when individuals registered the trade names of well known companies. For example, before the “Hard Rock Cafe” opened in Buenos Aires, Argentina, a women allegedly had already registered the trade name as her’s, which resulted in a court action over the use of the name. See New York Times, December 14, 1995, page D6. Two recently published German court opinions have held that the acquisition of website domains using the names of companies that are unrelated to the buyer is improper.
In August 2000, the State Supreme Court in Frankfurt/Main held that a German court may enjoin a person who, without any relationship or interest, registers an internet domain name with the trade name of a company. The court may also award damages for such vexatious and immoral (sittenwidrig) conduct (see Sections 826 and 226 of the Civil Code, (Bundesgesetzbuch, BGB)). The case involved a dairy by the name of “Weideglueck” (“meadow fortune”) whose trade name the dairy had registered in 1979. The defendant registered an internet domain by the same name in Spring 1999. The plaintiff did not offer any products or services involving that name, and simply prevented the diary from maintaining a website under its trade name in Germany.
The Court explains: “One can assume an immoral interference and intent to harm when the domain registration occurs with the goal of preventing the trade mark owner from using the name for its own business purposes. This usually goes along with the intent to have the trade mark owner purchase the domain at a high price. Someone who seeks to exploit with the intent of reaping financial gains the important usage interest of a trade mark owner violates moral standards of all people with a sense of justice.” [Slip op. 2]
The Court rejects the defendant’s explanation that his hiking tours in the mountains of Austria inspired him to register the domain name. Based on the facts of the case, the Court finds that profit motives drove the defendant. That is, he simply wanted to sell the domain name at a high price to the owner of the trade name.
Similarly, in April 2000, the District Court Wiesbaden held that the owner of a trade name is entitled to an injunction against someone without relationship to that trade name who has bought the domain name and does not use it. In this case, the defendant had registered the trade name of a computer research laboratory at the University of Karlsruhe in his name, and later demanded German Marks 30,000 (approximately $15,000) to release the domain. The defendant does not have any link with that organization and did not put the domain name to any use.
The Court notes that there is agreement among German state supreme courts that the rightful owner of a trade name can seek an injunction and damages against someone who registered the same name as an internet domain. In assessing court costs, the court based its calculation on the amount which the defendant had demanded from the research laboratory, i.e., German Marks 30,000.
Citation: OLG Frankfurt/Main, Beschluss vom 12. April 2000, 6 W 33/00 – weideglueck.de; Landgericht Wiesbaden, Beschluss vom 9. August 2000, 3 O 129/00 – “z.de”.
Filed in: 2001 International Law Update, Issue 2
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