Tag Archives: cyberspace



November 18 / All Articles, Computing

For Sale Signs In Cyberspace: Whether Federal Rule Of Evidence 408 Should Be Adapted To The Uniform Dispute Resolution Policy For Internet Domain Names To Bar Evidence Of Offers To Settle From Arbitration Proceedings

In 1996, Panavision International, L.P., demanded that Dennis Toeppen stop using the domain name panavision.com because it was identical to the Panavision trademarked name. Toeppen replied that he had a right to the domain name, which he had registered with Network Solutions, Incorporated. [1]

 

If your attorney has advised you otherwise, he is trying to screw you. He wants to blaze new trails in the legal frontier at your expense. Why do you want to fund your attorney’s purchase of a new boat (or whatever) when you can facilitate the acquisition of ‘PanaVision.com’ (sic) cheaply and simply instead? [2]

 

Toeppen had registered a series of well-known, trademarked names as domain names and engaged in the business of attempting to sell the registered domain names to the companies that owned the trademarked names. [3] Toeppen offered to “settle” with Panavision for $13,000.00, in exchange for which he would transfer the registered name and agree not to, “acquire any other Internet addresses which are alleged by Panavision to be its property.” [4]

 

The United States Court of Appeals for the Ninth Circuit, in this ground breaking case, found that Toeppen’s efforts evidenced a commercial use of the domain name and violated both state and federal trademark dilution acts. [5] The court considered Toeppen’s demand for payment in the principle case and in previous cases; [6] in fact, the demand was crucial to the court’s determination that Toeppen was engaged in the business [7] of being a “cyber pirate.” [8]

 

Since the Panavision decision, “cyber pirates” have become known as cybersquatters, and the term has entered the English lexicon. Cybersquatting, at least according to trademark holders and their lawyers involves individuals buying domain names identical or confusingly similar to the trademarks of other entities and demanding payment from the trademark holders for the domain names. [9] The highest levels of American government heard and responded to a call for action against cybersquatters by proposing a system for managing domain names; [10] the Internet Corporation for Assigned Names and Numbers (“ICANN”) followed therefrom. [11]

 

ICANN created a Uniform Dispute Resolution Policy (“UDRP”) [12] to address the “Toeppens” of the world with swift action on behalf of the trademark holders. [13] The UDRP functions through a group of approved arbitration organizations, [14] which, in turn, apply the UDRP through private arbitrators referred to as Panelists in their written opinions. [15] With remarkable ease UDRP Panelists found bad faith registration and use of domain names that were the same as or confusingly similar to trademarked names. Demands similar to Toeppen’s demand to Panavision were fodder for the claims of bad faith. [16] ICANN’s President announced the organization’s delight with the results of the system it had implemented. [17]

 

Yet, in the short time the UDRP Panelists have been creating a new common law for trademark protection on the Internet, the pendulum has begun to swing back to the side of the property speculators – formerly referred to as cybersquatters – who, all of a sudden, found a friend in the battle to protect their personal property rights. Ironically, the friend was one of the very UDRP Panelists who once transferred their domain names with such ease. Panelist Michael DeCicco’s [18] proposal: adopt the United States Federal Rule of Evidence (“FED. R. EV ”) 408 to bar discussions of offers of settlement, between cybersquatters and trademark holders, from consideration in UDRP arbitration proceedings. [19] Presently, not all Panelists in all approved UDRP arbitration groups adopt DeCicco’s position. Some arbitrators explicitly reject his proposal. [20] Yet, the entire tenor of the UDRP process has changed. Now, Panelists characterize requests for payment in excess of out-of-pocket expenses – which were once considered clear evidence of bad faith registration and use – as an “offer to settle;” though such offers are still weighed by most Panelists, the offers are no longer considered clear evidence of bad faith. [21]

 

The shift in characterization creates a higher burden for trademark holders and returns them to their position before the implementation of the UDRP. They are subjected to a system of requirements as strenuous as those used in the United States Federal Courts to prove they are entitled to domain names.

 

But, is adoption of FED. R. EV 408, or even a shift in characterization from “demands for payment” to “offers to settle” appropriate? Ought the arbitrators apply, sua sponte, an American law that may not be recognized by international parties to arbitration? Even if both parties are American domiciliaries, should the same standard of evidence as traditional litigation be applied to a system that was designed to be both quick and efficient via private arbitration? Is that standard of evidence capable of meeting the challenges of a largely anonymous Internet?

 

This article will address these issues. I begin with an explanation of the creation of the UDRP, its impetus and the methodology used in its drafting and adoption. I consider whether adoption of FED. R. EV 408 would be consistent with this history. Next, I turn to Panelist Michael DeCicco’s argument for the adoption of FED. R. EV 408. In the heart of this article, I attempt to evaluate the propriety of DeCicco’s proposal given the character of the Internet. Finally, I conclude with the repercussions on the UDRP if FED. R. EV 408 is adopted and a model case for dealing with offers to settle.

 

R. Jonas Geissler*

November 27 / All Articles, Computing

What A Local Internet Company Can Do About Legal Uncertainty In Cyberspace: A Policy Proposal On How To Deal With The International Jurisdictional, Judgment Enforcement, And Conflict Of Law Problems Posed By The Internet

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of the Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

 

We have no elected government, nor are we likely to have one, so I address you with no greater authority than that which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you posses any methods of enforcement we have true reason to fear. [1]

 

–John Perry Barlow, Declaration of the Independence of Cyberspace

 

John Perry Barlow’s declaration, circa 1990, is typical of the time that it was made. Since then, however, such The Matrix-like hipsters have been shoved aside for the moment by the rush of Banana Republic and Amazon.com shoppers barreling down the information superhighway toward their favorite dotcom. What was once a new frontier beyond the reach of law and order is now a space beginning to look a bit more like the high seas shortly after the establishment of basic maritime and trading norms–or perhaps, in an even more cynical light, an unruly international bazaar in the form of a 24-hour interactive shopping channel. Still, Matrix wannabes aside, the international qualities of the Internet have not ceased to imbue it with multiple levels of legal uncertainty. That is, the jurisdictional quandaries of what are the laws that govern international Internet transactions and/or interactions and can/should enforce them remain uncertain.

 

For example, in the business context, an organization’s website could be violating laws in another country without having ever intended to do so, and, consequently, it may have to submit to a foreign court’s jurisdiction that may take action against it–such as monetary penalties or freezing any assets it may have abroad. The Georgia Institute of Technology found itself in such a situation in 1997 when it was sued by two French language organization in France because its website offered information only in English about its programs. [2] The plaintiffs accused Georgia Tech of violating a 1994 French law that required websites offering “goods and services” in France to be in French.

 

The problem, hence, is that while some legal certainty in Internet business transactions is available through internationally enforceable forum-selection and choice of law agreements between contracting parties, [3] there is no such certainty when international disputes arise outside of a contractual context. Put simply, contractual forum-selection and choice of law clauses alone are not enough to aid an organization’s internet business when unforeseeable foreign regulations–such as fraud, defamation, trademark disputes, language purity, advertising, libel, defamation, obscenity, informational content regulation, and commercial speech laws–suddenly expose it to litigation or harm that is beyond the contractual context and that can be enforced abroad. And, in the converse, such contractual clauses are of little help when a domestic company may need to pursue legal action against another company abroad that may be adversely affecting its e-business (by, for example, posting trade secrets) through a foreign website, without ever having had any contact with the domestic company’s business, website, or its country for that matter.

 

The cause of this problem is that the increasing use of cyberspace to conduct both national and global commerce has shaken up the sovereign state’s historical control over economic and social activity. [4] The very nature of the Internet makes it hard for some countries, like the United States, to apply old models of economic and social regulation to electronic commerce and interaction. The current controversies about individual jurisdictions within nation-states themselves over claims of jurisdiction to tax or haul into court Internet merchants located in other sister jurisdictions illustrate the economic and social regulatory problems the Internet thus poses. [5] For, “there is no central law governing the Internet because there is no central policy-making body that enforces Internet decisions. This creates problems on such issues as jurisdiction, criminal law, evidence, privacy and even human rights.” [6]

 

But, what can a local Internet business company do about this? According to a recent study, by 2005, fifty-seven percent of Internet users worldwide will speak a language other than English. [7] Therefore, what local e-businesses can and must do is to get involved in international policy-making via the political channels they have available domestically. Though lobbying Congress may be easier for big companies, smaller companies can also participate by joining together as an industry. In addition to lobbying Congress, another good place to start, where it doesn’t matter how big or small your company may be, is to begin appealing to and working with government agencies themselves, such as the Federal Trade Commission, that are currently active in pursuing international solutions to these problems. For example, in Boston, the FTC does actually meet with industry representatives and the public to get input on these problems and to report on what the FTC is doing about them. In such a recent workshop, the FTC’s commissioner reported to local e-businesses and the public that:

 

In [its] work … the FTC …. in discussions with [its] international colleagues, the Commission is taking a two-prong approach toward resolution of these issues: (1) laying the groundwork for international recognition of consumer protection laws and creating international treaties defining rules for jurisdiction and choice of law; and (2) self-regulatory initiatives that yield good business practices and facilitate alternative dispute resolution.

 

Both strive to balance our two policy goals: ensuring that consumers receive effective consumer protection and at the same time ensuring that the online medium provides sufficient certainty to businesses to foster commercial growth and development. Any ultimate solution likely will require some combination of these approaches. [8]

 

Thus, such agencies like the FTC are great places to start to pitch policy proposal over what to do with the particular quandaries over jurisdiction in the global internet because not only are they very receptive to local e-business concerns, but because they are also very able to represent such concerns and proposals at the international policy-making level. For, Commissioner Thompson, leads the U.S. delegation to the particular committees of the Organization for Economic Cooperation and Development currently working on international e-business guidelines in their attempts to overcome “the differences between many European countries’ systems of law and our own … in developing consensus of difficult issues like choice of law and jurisdiction.” [9]

 

Accordingly, for the purposes of this very presentation, this project will first focus specifically on what domestic internet companies should know about jurisdiction, enforcement of judgements, and conflict of law issues in cyberspace when a dispute arises outside of the contractual sphere. Second, this presentation will suggest a way to think about law and cyberspace that may be better suited for the task of overcoming the legal uncertainty in cyberspace created by its current jurisdictional, conflict of law, and enforcement of judgements problems. Next, this presentation will brainstorm on how such a theory of approaching governance in cyberspace would work. Then, in section five, this presentation will suggest a policy proposal on how such an approach could be brought down to earth and made a reality. Lastly, in section six, the proposed policy will be applied to a hypothetical example (dealing with content regulation) in which the merits of the proposal’s ability to overcome the jurisdictional, enforcement of judgments, and conflict of law problems posed by the Internet today will be assessed.

 

Javier Beltran*