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I. INTRODUCTION
In the April issue of the Utah Bar Journal we examined the issue of "new uses" of copyright material in cyberspace. This article considers two recent cases on the international aspect of Internet law and one on the circumstances under which Internet Service Providers enjoy immunity in cases of copyright infringement.
II. JURISDICTION
Make mad the guilty, and appall the free,
Confound the ignorant, and amaze indeed
- Hamlet, Act 2, scene 2
Two cases have shaped jurisdiction as it relates to website activity: Batzel v. Smith2 and Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitsme.3 In Batzel a U.S. District Court exercised jurisdiction over a Dutch web site while the court in Yahoo! refused to enforce a French Court's orders which did not meet U.S. constitutional standards.
Batzel v. Smith
Ellen Batzel is an entertainment lawyer who has a number of Jewish clients in California. Bob Smith painted Batzel's North Carolina home and asked her to
submit his script to her clients in California. When Batzel refused the request, Smith apparently retaliated by sending an e-mail to the Dutch based museum industry website, MSN, claiming
he had worked "in the home of a lawyer who claimed to be the granddaughter of Heinrich Himler and who bragged about having an art collection stolen from Jewish families by the
Nazis."4
MSN's creator and operator, Tom Cremers, published the e-mail and related updates on five separate occasions without verifying the allegations. Batzel
claimed to have been damaged by this publication in that she lost several prominent clients in California and was subjected to an investigation by the North Carolina Bar.
She sued in California. MSN and Cremers challenged the California court's jurisdiction over them.
California as most states allows the exercise of personal jurisdiction so long as
due process requirements are met. Due process requires that: (1) a defendant have performed an act, completed a transaction or otherwise availed himself of the privileges of conducting
activities in the forum state; (2) the claim must arise out of the forum-related activities; and, (3) the exercise of jurisdiction is reasonable.5
MSN and Cremers had
sufficient California contacts. Cremers sent his newsletter, via Internet, to California multiple times per week; a number of California businesses and organizations subscribed to
Cremers' newsletter; Cremers republished articles from various California newspapers; and Cremers had traveled to California where he solicited subscribers for the MSN newsletter,
promoted the MSN website and sought corporate sponsors.6
The court also found that Batzel's claim arose out of forum-related activities. The newsletter was published in
California and read by California residents who, due to the false statements in the newsletter, ceased doing business with Batzel.7
And finally, California's exercise of
jurisdiction over the Dutch website and its creator and operator was held to be reasonable. California courts look at seven factors to determine reasonableness of the exercise of
jurisdiction.8 Key to the court's analysis on this point was the fact that Cremers had interjected himself into the Los Angeles art world. He had retained a prestigious Los Angeles firm to represent him and could communicate with counsel via the Internet without leaving Holland. The court also noted that the MSN website is written in English, not Dutch, and that no "viable, alternative" forum in which to resolve this dispute existed.9
Related to the question of jurisdiction is the issue of forum non conveniens. This issue is a discretionary matter with the court who considers the availability of an
alternate forum and then weighs private and public factors. Private factors include: where the parties reside, how convenient is the forum to the litigants, access to evidence, the
availability of witnesses, cost, the enforceability of a judgment and other factors to make the trial of a case "easy, expeditious and inexpensive."10
Public
factors include: local interest in the matter, the court's familiarity with governing law; the burden on the courts and juries, court congestion and cost to the forum.11
Given
the application of California law to the case, MSN's and Cremers' contacts with California, and the fact that much of the alleged injury took place in California, the court reasoned that
California had the greatest interest in resolving the dispute and refused to dismiss on forum non conveniens grounds.12
Application of Utah Long-Arm Law
If Batzel had taken place in Utah rather than in California and Utah's long-arm statute were applied, the same finding of personal jurisdiction over the defendants would result.
Section 78-27-24 of the Utah Code grants jurisdiction where one causes "any injury within this state whether tortious or by breach of warranty." The Utah Supreme Court
has held like California that "the Utah long-arm statute Ômust be extended to the fullest extent allowed by due process of law.'"13
Though slight semantic
difference exists between California and Utah courts' consideration of personal jurisdiction, both states employ the same general factors: whether defendants acted or caused injury within
the state;14 that defendants have sufficient contacts with the forum state as measured by the relationship between the forum-related activities and the harm alleged by defendants; and that the exercise of personal jurisdiction over the defendants accords with the requirements of due process in that it was reasonable.15 Both Utah and California courts exercise personal jurisdiction to the "fullest extent allowed by due process of law."16
The ability of the law to reach as far as necessary, even across oceans, is bound the make the guilty very mad indeed.
Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme
At issue in the Yahoo! case was "whether it is consistent with the Constitution and laws of the United States for another nation to regulate speech by a United
States resident within the United States on the basis that such speech can be accessed by Internet users in that nation."17 The short answer - no, it is not.
Yahoo!, as an Internet Service Provider, offers various services and websites accessible around the world. One of the services offered is an auction site. Unfortunately for Yahoo!,
parties using the Yahoo! auction site offered for sale Nazi and Third Reich related goods which violated French law. Le Ligue Contre Le Racisme et L'Antisemitisme (LLCRA) brought a civil complaint against Yahoo! in a French court, the Tribunal de Grande Instance de Paris. The French court ultimately entered an order directing Yahoo! to block French citizens' access to any material that violated French law.18
Although Yahoo! made efforts to comply with the French court order, they sought declaratory relief in the United States District Court as to the enforceability of the French
court order on the ground that it is technologically impossible to prevent French citizens from accessing the Nazi-related items and that such a ban would infringe on Yahoo!'s rights
under the First Amendment to the United States Constitution.19
While the parties did not contend that the French court order went beyond what any U.S. court would be
constitutionally permitted to do the Court recognized the Constitutional problems in enforcing the French Court's Order:
The French order prohibits the sale or display of items based on their association with a particular political organization and bans the display of websites based on the authors'
viewpoint with respect to the Holocaust and anti-Semitism. A United States court constitutionally could not make such an order. [Citation omitted.] The First Amendment does not permit
the government to engage in viewpoint-based regulation of speech absent a compelling governmental interest, such as averting a clear and present danger of imminent violence.
[Citations omitted.] In addition, the French Court's mandate that Yahoo! "take all necessary measures to dissuade and render impossible any access via Yahoo.com to the Nazi
artifact auction service and to any other site or service that may be construed as constituting an apology for Nazism or a contesting of Nazi crimes" is far too general and
imprecise to survive the strict scrutiny required by the First Amendment. The phrase, "and any other site or service that may be construed as an apology for Nazism or a
contesting of Nazi crimes" fails to provide Yahoo! with a sufficiently definite warning as to what is proscribed. [Citation omitted.] Phrases such as "all necessary
measures" and "render impossible" instruct Yahoo! to undertake efforts that will impermissibly chill and perhaps even censor protected speech. [Citations omitted.]
"The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury."20
LLCRA argued that there was no real or immediate threat to Yahoo! as the French court order could not be enforced until a penalty had been fixed by the French court. The district court
noted that the French court order is valid under French law, that a penalty could be assessed retroactively and that assurances that the French court order would not be enforced did not
bar its enforcement in the future.21
Neither the principles of abstention, an appropriate remedy for international forum-shopping, nor comity, the general recognition by
the U.S. of foreign judgments and decree, could overcome the court's determination that the French court order violated First Amendment rights. "Although France has the sovereign
right to regulate what speech is permissible in France, this Court may not enforce a foreign order that violates the protections of the United States Constitution by chilling protected
speech that occurs simultaneously within our borders."22
Given the fact "that the First Amendment precludes enforcement within the United States of a French
order intended to regulate the content of its speech over the Internet,"23 the court did not consider the issue of whether it was technologically possible to comply with the French court order.
State law was not relevant in determining the enforceability of the French court order at issue in Yahoo!. The United States District Court for the District of Utah would
have undoubtedly reached the same conclusion as the U.S. District Court for the Northern District of California.
III. LIABILITY
The purest treasure mortal time afford
Is spotless reputation-
RICHARD THE SECOND, Act 1, scene 1
Congress enacted the Digital Millennium Copyright Act ("DMCA") in 1998 to "facilitate the robust development and world-wide expansion of electronic commerce, communications,
research, development, and education."24 Among other things, the DMCA grants copyright infringement immunity, perhaps the equivalent to Shakespearean "spotless
reputation," to Internet Service Providers ("ISP") if certain requirements are met.
These conditions, set out in the Online Copyright Infringement Liability
Limitation Act (now 17 U.S.C. ¤ 512), are that the ISP not have actual or constructive knowledge of the infringement; that it not receive a direct financial benefit from the infringing
activity; and, that it act promptly to remove, or prevent access to, the infringing material once it has received notice of the infringement.
The body of law interpreting this
"safe harbor" of the DMCA received a major infusion from several recent decisions, one of which is discussed here.25
Hendrickson v. eBay, Inc.
Robert
Hendrickson, the copyright owner of the documentary "Manson" sent eBay a "cease and desist" letter claiming that pirated copies of "Manson" were being
offered for sale in DVD format on eBay. eBay promptly responded to Hendrickson's letter by requesting detailed information as to his claim. Hendrickson was also advised as to eBay's
procedures for infringement notification and rights protection. Unfortunately for Mr. Hendrickson, he did not comply with eBay's requests or procedures. Instead he filed three different
lawsuits against eBay and various other individual defendants.26
The actions were consolidated and eBay brought a motion for summary judgment. A key issue in the
determination of the motion was the application of the safe harbor provisions of the DMCA.
Under these safe harbor provisions, proper notification to the ISP regarding the
infringement is essential. The DMCA even specifies the elements of proper notification.27
Without substantial compliance with these elements of notice, the ISP does not
have a duty to act. The court found that Hendrickson failed to substantially comply with the notice provisions. Absent from Hendrickson's communications with eBay was the necessary
statement attesting to good faith of the complaining party and the accuracy of the claim made. Hendrickson also failed to adequately identify the offending material.28
The
court went on to consider whether eBay had actual or constructive notice of the infringing activity. Again, Hendrickson's claims failed. "Under the DMCA, a notification from a
copyright owner that fails to comply substantially with Sections 512(c)(3) (A)(ii), (iii) or (iv) "shall not be considered under [the first prong of the safe harbor test] in
determining whether a service provider has actual knowledge or is aware of the facts or circumstances from which infringing activity is apparent."29
Last but not
least in the court's application of the safe harbor of the DMCA was whether eBay received a direct financial benefit from the infringement and whether it had the right and ability to
control the infringing activity.30 The court did not consider whether eBay received a financial benefit in light of its determination that eBay did not have the right or ability to control the infringing activity.
The fact that an ISP has the ability to "remove or block access to materials posted on its system when it receives notice of claimed infringement" does not constitute
the "right and ability to control."31 An ISP is required to remove and block access to infringing materials. "Congress could not have intended for courts to hold that a service provider loses immunity under the safe harbor provision of the DMCA because it engages in acts that are specifically required by the DMCA."32
Limited monitoring of a website likewise does not establish an ISP's "right and ability to control" the infringement. The court looked to the DMCA's legislative
history which supports voluntary efforts to combat piracy.
This legislation is not intended to discourage the service provider from monitoring its service for infringing material. Courts should not conclude that the service provider loses
eligibility for limitations on liability under section 512 solely because it engaged in a monitoring program.
House Report 105-796 at 73 (Oct. 8, 1998).33
Given the federal nature of the Digital Millennium Copyright Act, state law is not at issue.
IV. Summary and Conclusion.
Though these cases are not comprehensive of the many developments regarding jurisdiction and liability in Cyberlaw in 2001, they are illustrative.
One court's decision to assert jurisdiction over defendants in the Netherlands while another court refused to enforce of a French court order were consistent - both courts aptly applied
established principles of jurisdiction and constitutional law to this new medium of the Internet. The interpretation of the recently-enacted Online Copyright Infringement Liability
Limitation Act of the Digital Millennium Copyright Act was a matter of first impression.
A final article in a future issue of the Utah Bar Journal will examine recent cases and laws affecting online music.
Footnotes
1. William Shakespeare, The Second Part of King Henry the Sixth, act 2, sc. 2.
2. 2001 U.S. Dist. LEXIS 8929 (C.D. Cal. June 5, 2001).
3. 145 F. Supp. 2d 1168 (N.D. Cal. 2001).
4. Batzel, 2001 U.S. Dist. LEXIS at *2-3.
5. Id. at *4-5.
6. Id. at *5-6.
7. Id. at *9-10.
8.
(1) the extent of the defendant's purposeful interjection into the forum state, (2) the burden on the defendant in defending in the forum, (3) the extent of the conflict with the sovereignty of the defendant's state, (4) the forum state's interest in adjudicating the dispute, (5) the most efficient judicial resolution of the controversy, (6) the importance of the forum to the plaintiff's interest in convenient and effective relief, and (7) the existence of an alternative forum. Id. at *10-11.
9. Id. at *10-12.
10. Id. at *13-15.
11. Id. at *17.
12. Id. at *17-18.
13. Starways v. Curry, 980 P.2d 204, 206 (Utah 1999) quoting Synergetics v. Marathon Ranching Co. Ltd.,
701 P.2d 1106, 1110 (Utah 1985).
14. California looks for "contacts with California [that] evince an intent to purposefully avail themselves of the benefits and
privileges of conducting business in California" Batzel, 2001 U.S. Dist. LEXIS at *5. Utah has enumerated 7 acts, ranging from transacting business in the state to committing
sexual intercourse, that submit one to jurisdiction in Utah. Utah Code Ann. ¤ 78-27-24 (1996).
15. Starways v. Curry, 980 P.2d 204, 207 (Utah 1999).
16. Id. at 206.
17. Yahoo! Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 145 F. Supp. 2d at 1186 (N.D. Cal. 2001).
18. Id. at 1184-85.
19. Id. at 1185-86.
20. Id. at 1189.
21. Id. at 1190-91.
22. Id. at 1192.
23. Id. at 1194.
24. S. Rep. No. 105-190, at 1, 105th Congress, 2d Session 1998.
25. Another case decided under the safe harbor provisions of the DMCA was CoStar Group, Inc. v. LoopNet,
Inc., 164 F. Supp. 2d 688, 693 (MD. 2001). CoStar Group operates a commercial real estate database and provides national commercial real estate information services. LoopNet allows users
to post commercial real estate listings. CoStar sued as it claimed that many of the photographs posted on LoopNet's site were infringements of Costar's copyrighted photographs. The
Maryland federal court's analysis of the DMCA safe harbor provisions in granting LoopNet immunity were in harmony with the analysis of the California federal court.
26. Hendrickson v. eBay, Inc., 165 F. Supp. 2d 1082, 1084-85, (C.D. Cal. 2001).
27 To wit:
(1) a physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed;
(2) identification of the copyrighted work claimed to have been infringed;
(3) identification of the material that is claimed to be infringing or to be the subject of infringing
activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material;
(4) information reasonably sufficient to permit the service provider to contact the complaining party;
(5) a statement that the complaining party has a good faith belief that use
of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law; and
(6) a statement that the information in the notification is
accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the copyright owner.
17 U.S.C. ¤ 512(c)(3).
28. Hendrickson, 165 F. Supp. 2d at 1090.
29. Id. at 1092-93.
30. Id. at 1093.
31. Id.
32. Id. at 1093-94.
33. Id. at 1094.
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