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Compartmentalizing legal regimes is increasingly ineffective

By November 3, 2003law practice

If the Wall St. Journal publishes an article in the United States suggesting that Saudis are financing terrorism and the Saudis don’t like the article well they have to put up with it. The First Amendment is heap powerful medicine. But if the Wall St. Journal reprints that same article in its European edition? Well, hello libel lawsuit.

Google, a company based in the United States, has a pay-for-placement advertising service, in which the search engine returns links to companies and organizations that have paid to be associated with certain keywords — even if they are trademarks belonging to somebody else. Probably okay in the United States, but what about in France? Well, Louis Vuitton thinks this is a good jurisdiction to bring a trademark infringement action.

About two years ago Yahoo was forced to block access from France to online sales of Nazi memorabilia. “We take for granted a world in which geographical borders–lines separating physical spaces–are of primary importance in determining legal rights and responsibilities,” say authors David Johnson and David Post in their article Law and Borders — The Rise of Law in Cyberspace. A solution to the emerging legal/jurisdictional problems lies in adopting a fresh perspective:

Many of the jurisdictional and substantive quandaries raised by border-crossing electronic communications could be resolved by one simple principle: conceiving of Cyberspace as a distinct “place” for purposes of legal analysis by recognizing a legally significant border between Cyberspace and the “real world.”

Using this new approach, we would no longer ask the unanswerable question “where” in the geographical world a Net-based transaction occurred. Instead, the more salient questions become: What rules are best suited to the often unique characteristics of this new place and the expectations of those who are engaged in various activities there? What mechanisms exist or need to be developed to determine the content of those rules and the mechanisms by which they can enforced?

I think that the suggested approach is worth considering. But I don’t think for a moment that sovereign nations are going to go quietly into the good night of International cyber-jurisdiction. What’s going to happen (not anytime soon) is that the “transactional costs” of the current enforcement system (e.g. legal system) will become so high that multi-national corporations and other entities that engaged in cross-border transactions will simply adopt a more efficient system out of necessity. In short, the current legal system will become significantly less relevant –and, in many ways, that’s already happening.

For more information, read the Chicago-Kent online project on Internet Jurisdiction.

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