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The Rise and Reform of Law on the Internet

Curtis E. A. KARNOW <cek@sonnenschein.com>
Sonnenschein Nath & Rosenthal
USA

Abstract

This paper addresses the infiltration of civil public law into the Internet. It argues that the infiltration is inevitable. Following a discussion of civil law's infirmities, it concludes that Internet regulation must be severely circumscribed: It must (1) be simple; (2) not include multiple factors or elements, applied along a sliding scale; and (3) minimize dependence on surrounding circumstances. The paper outlines the cost of Internet regulation that does not adhere to these parameters, and urges reform of the civil law process as a central solution to the problems of law on the Internet.

With the development of e-commerce and online communities, Internet activity is increasingly coming under the scrutiny of public law. Courts are less hesitant to impose liability for actions on the Internet, and public agencies such as the state attorneys general and a wide variety of federal agencies have asserted jurisdiction over the means and content of Internet communications. Metatags, Internet music distribution, and privacy and encryption have all been subjected to the strictures of public law.

Public law, and the paraphernalia of its courtroom context, often appears profoundly inapposite to the resolution of disputes that take place on the Internet. The privacy of relations on the Internet appears to conflict with the exposure of the public law. The results of litigation are not congruent with the expectations of many users.

In fact, the imposition of public law on Internet activities exacerbates the weaknesses of public law. It is generally far worse -- more expensive, more time-consuming, and susceptible of less certainty -- to litigate an Internet-based dispute than an analogous dispute arising in a more traditional context.

The paper surveys developments in the law, all of which reveal the powerful expansion of civil public law at the expense of criminal law on the one hand, and of previously unregulated behavior on the other. Examples include drawn tobacco, environmental, consumer fraud litigation, and sexual harassment.

Civil law relies on frames, or contexts, to give meaning to its prescriptions. Taking the examples of trade secret misappropriation, copyright, trademark, privacy, and other areas, the paper notes that liability always depends on the context of the putatively illegal actions. For example, privacy violations depend on whether one's reasonable expectations of privacy were violated; the copyright "fair use" defense depends on whether, in the light of the circumstances surrounding the use, the infringement was fair; trademark liability depends on whether in light of surrounding circumstances the public is likely to be confused by the use of a logo. The outcomes in civil litigation are (1) highly sensitive to initial circumstances and (2) dependent on multiple, interlocking factors, each of which is present, more or less, along a spectrum.

Civil litigation is, in short, susceptible to chaotic outcomes, and does not handle contextual ambiguity well. That kind of governance is inefficient, in every sense of the term.

Surrounding context, or frames, are often absent on the Internet, or not controllable by the author of the communication, or are not easily defined and circumscribed. The combination of civil law's reliance on the balancing of many factors and on surrounding circumstances, coupled with the Internet's inability to provide sustained, fixed, controllable contexts for communications, means that the regulation of the Internet by the public law is dangerous.

Two responses are outlined.

First, we encourage dispute resolution outside the civil public law, by submission to private arbiters and self-regulation. This can range from (1) formal arbitration under the auspices of the American Arbitration Association, the World Intellectual Property Organization, and so on, to (2) the divine rights of listserv managers in which the community abides by whatever decisions are made by the list owner. Private parties have the power to set the parameters of this private process: A variety of measures are available to avoid lengthy, costly, unpredictable results. But relatively few Internet-related conflicts are susceptible to this diversion to private dispute resolution.

A second response recognizes the intractable power and range of the public civil law system, and determines to repair it. E-commerce, or any commerce, will not last without the assurances that the law will guard against fraud, that contracts will be enforced, and that intellectual property will be protected. As the Internet develops through the funding of online advertising, online sales, and other aspects of e-commerce, public law will inevitably insinuate itself and colonize electronic realms previously free of the law's sanction.

Thus reform of the civil legal process is required. The paper seeks to alert judges and legislators (and others that would regulate the Internet) to the cost of rule making. Reform should include merit selection of judges, assaults on the stunning cost of pretrial discovery; procedures for dispositive motions within 60 days of the filing of the complaint, and routine assessment of the other side's attorneys' fees. There are a variety of solutions; the central point is that reform of the public law system as it exists in the physical world is necessary for the good of the Internet, because the law will not leave the Net alone.

Contents

I. Background discussion

This panel discussion addresses the infiltration of civil public law into the Internet.

With the development of e-commerce and online communities, Internet activity is increasingly coming under the scrutiny of public law. Courts are less hesitant to impose liability for actions on the Internet, and public agencies such as the states' attorneys general and a wide variety of federal agencies have asserted jurisdiction over the means and content of Internet communications. Metatags, Internet music distribution, and privacy and encryption have all been subjected to the strictures of the legal regime.

Public law, and the paraphernalia of its courtroom context, often appears profoundly inapposite to the resolution of disputes that take place on the Internet. The privacy of relations on the Internet appears to conflict with the exposure of the public law. The results of litigation are not congruent with the expectations of many users.

In fact, the imposition of public law on Internet activities exacerbates the weaknesses of public law. It is generally far worse -- more expensive, more time consuming, and susceptible of less certainty -- to litigate an Internet-based dispute than an analogous dispute arising in a more traditional context.

Civil law relies on frames, or contexts, to give meaning to its prescriptions. As we see from the examples of trade secret misappropriation, copyright, trademark, privacy, and other areas, liability always depends on the context of the putatively illegal actions. For example, privacy violations depend on whether one's reasonable expectations of privacy were violated. The copyright "fair use" defense depends on whether, in the light of the circumstances surrounding the use, the infringement was fair. Trademark liability depends on whether in light of surrounding circumstances the public is likely to be confused by the use of a logo. The outcomes in civil litigation are (1) highly sensitive to initial circumstances, and (2) dependent on multiple, interlocking factors, each of which is present, more or less, along a spectrum.

Civil litigation is, in short, susceptible to chaotic outcomes, and does not handle contextual ambiguity well.

Surrounding context, or frames, are often absent on the Internet, or not controllable by the author of the communication, or are not easily defined and circumscribed. The combination of civil law's reliance on the balancing of many factors and on surrounding circumstances, coupled with the Internet's inability to provide sustained, fixed, controllable contexts for communications, means that the regulation of the Internet by the public law is dangerous.

The panel will consider these responses:

First, dispute resolution outside the civil public law, by submission to private arbiters and self-regulation. This can range from (1) formal arbitration under the auspices of the American Arbitration Association, the World Intellectual Property organization, etc., to (2) the divine rights of listserve managers in which the community abides by whatever decisions are made by the list owner. Private parties have the power to set the parameters of this private process: a variety of measures are available to avoid lengthy, costly, unpredictable results. But relatively few Internet-related conflicts are susceptible to this diversion to private dispute resolution.

A second response recognizes the intractable power and range of the public civil law system, and determines to repair it. E-commerce, or any commence, will not last without the assurances that the law will guard against fraud, that contracts will be enforced, that intellectual property will be protected. As the Internet develops through the funding of online advertising, online sales, and other aspects of e-commerce, public law will inevitably continue to insinuate itself, to colonize electronic realms previously free of the law's sanction.

Thus, reform of the civil legal process may be required. Reform should include merit selection of judges, assaults on the stunning cost of pretrial discovery, procedures for dispositive motions within 60 days of the filing of the complaint, routine assessment of the other side's attorneys' fees. And so on. There are a variety of solutions; the central point is that reform of the public law system as it exists in the physical world is necessary for the good of the Internet, because the law will not leave the net alone.

II. Participants

Curtis E.A. Karnow

David L. Mathus

Christine Maxwell

Philip Zimmerman (tentative)

Vinton Cerf (tentative)

Focused questions for panel

1. The evolution of rules for the Internet and its effect on current law

Internet community and consensus: where do our rules come from? Where should they come from? What are the obstacles between this consensus and their adoption into law?

Rules and procedures at issue include notions of (1) what constitutes fair use in the Internet context; (2) what's an implied license? (i.e., license to link, to quote, to frame, etc.); (3) what's "off limits" in terms of privacy rights; (4) the degree (or obviousness) of an attempt to protect a secret is enough to "reasonably" protect a trade secret. For other notions (5) ... (n), think of any other legal concept/rule/test that has the word "reasonable" in it, such as negligence. Each of these implicates an assumed consensus.

Should courts enforce this consensus? Has it built to a sufficient level? To what level need it rise -- and how to determine when it has risen there -- before a court "enforces" it?

Where does current law conflict with Internet consensus?

2. The adaptation of 20th-century laws for the Internet and the next century

How are countries adapting their differing rules governing traditional media and rights for the Internet and related technologies? How should they?

What does it mean when countries have different rules outside the Internet context? What do we do with that?

Examples: uses of encryption (United States v. Russia, France); privacy associated with personally identifiable data (compare United States and European approaches); moral rights (make the same comparison); providing or permitting access to the Internet at all (compare United States v. China); others? How will they deal with challenges of newer technologies (e.g., intelligent agents)?

3. Disputes and enforcement in cyberspace: today and tomorrow

How is public law (in the United States? elsewhere?) able to manage disputes that erupt on, or pertain to, the Internet? Can dispute management be followed up with effective international enforcement?

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