Stanford Center for Internet and Society

Interloc, runs an online rare and out-of-print book listing service, and as part of its services provides certain book dealer customers with an electronic mail address. In its ordinary course, an e-mail message (“e-mail”) is transferred from one computer to another before it reaches the addressee. During the transmission route, an e-mail is handed to a Message Transfer Agent (MTA), which stores the message locally. The message is routed through the network from one MTA to another until it reaches the recipient’s mail server, which accepts it and stores it in a location accessible to the recipient, at which point the final delivery is deemed to be completed. The final delivery process places the message into storage in a message store area. Usually a separate Mail Delivery Agent (“MDA”) is required to retrieve the e-mail from the MTA in order to make final delivery. Interloc used a program known as “procmail” as its MDA, which operates by scanning and sorting out e-mail and an MTA computer program known as “sendmail”. Interlock employees were directed by the defendant to edit their version of procmail to intercept and copy all incoming communications from one of their competitors - Amazon.com. As a result, all incoming messages from Amazon.com were intercepted, copied and stored before they were delivered to the members’ e-mail. Each time the operation was performed, the messages existed in the RAM or on hard disks or both within Interloc’s computer systems. The issue before the 1st Circuit was whether there was an ‘intercept’ of a communication within the meaning of the Wiretap Act. The Electronic Communications Privacy Act (“ECPA”) is divided into Title I, referred to as the “Wiretap Act”, 18 U.S.C. §§ 2510 – 2522 and Title II, commonly known as the “Stored Communications Act”, 18 U.S.C. §§ 2701 - 2711.

La Ligue Contre Le Racisme et L’Antisemitisme (LICRA) et al. brought suit against Yahoo! in France, resulting in a French court ruling that Yahoo! must block access to Nazi-related materials of any French user accessing its main website in the United States. Though the levying of damages is through a separate proceeding in France, the French court indicated that Yahoo! would potentially be required to pay fines upwards of $13,000 per day of noncompliance. Yahoo! did not fully comply with the French court order for First Amendment reasons, as it is technologically unable to block access of these materials to users with French Internet Protocol (IP) addresses while at the same time allowing Americans access. To protect itself against potentially large accruing fines, Yahoo! filed for declaratory judgment on the claim that First Amendment rights prevent enforcement of the French court order in the United States. The District Court for the Northern District of California denied LICRA’s motion to dismiss for lack of personal jurisdiction, and granted Yahoo! summary judgment. On August 23, 2004, the Ninth Circuit overruled the judgment for Yahoo!. The appellant, LICRA, appealed on three grounds: (1) declaratory judgment was not appropriate as the case was not ripe; (2) the District Court’s assertion of specific jurisdiction was invalid; (3) the District Court should have abstained from considering the case.The Ninth Circuit ruled in favor of appellant on the specific jurisdiction issue without addressing the other two issues. Yahoo! acknowledged that there was no basis for general jurisdiction due to a lack of systematic and continuous contact with California. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.9 (1984). The Court applied its own three-pronged test for specific jurisdiction: (1) the purposeful availment of the privilege and benefits of conducting activities in the forum state; (2) the claim arises out of or relates to these activities; (3) the exercise of jurisdiction by a court is reasonable. Bancroft & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). The issue to the Court was whether appellants met the purposeful availment prong by expressly aiming their conduct at California, as described in Calder v. Jones, 465 U.S. 783 (1984). Only if this prong is met would the other two prongs of the test need consideration.

On March 31, 2004, the Federal Court of Canada refused to force 5 internet service providers (“ISPs”) to reveal the identities of 29 anonymous subscribers accused of copyright infringement by members of the Canadian Recording Industry Association (CRIA). The Does had allegedly uploaded or downloaded music files via the p2p networks KaZaA and iMesh. According to the CRIA, each Doe had downloaded more than 1,000 songs. The court first recognized that the Does had an expectation that their subscriber information would be kept private based both on ISP user agreements and on Sections 3 and 5 of the Personal Information Protection and Electronic Documents Act (“PIPEDA”) (although PIPEDA allows for disclosure of this information without consent where a court order has issued). The court then laid out a five-prong test, borrowed from non-Internet discovery cases, for determining whether one party’s interest in pre-trial discovery outweighs another’s privacy rights*: (a) the applicant for discovery must establish a “prima facie case” against the alleged Doe defendant; (b) the person from whom discovery is sought, in this case the ISP, must be “more than an innocent bystander”; (c) this person must be “the only practical source of information” available; (d) this person must be “reasonably compensated” for expenses related to compliance with the discovery order; and (e) “the public interests in favour of disclosure must outweigh the legitimate privacy concerns” of the Doe.

Sixteen record companies who own or license copyrights in popular sound recordings in the United States filed a copyright infringement suit against twenty-five unidentified “John Doe” defendants for dissemination of plaintiffs’ copyrighted works unlawfully over the “Fast Track Network,” a peer-to-peer file sharing system. On April 1, 2004, the District Court of the Middle District of Florida ruled that the issues of personal jurisdiction and venue could be addressed after the defendants are identified, but that, contrary to plaintiff’s contentions, the court does not have to wait to address the joinder question (which requires determining whether severance will prejudice any party or result in undue delay of the litigation). Instead, the Court ruled that all claims except those by the first plaintiff against the first defendant be severed, and that they be be dismissed unless separate new actions, with proper plaintiffs and defendants, are initiated within eleven days of the court order.Plaintiffs relied on Civil Rule of Procedure 20 that allows permissive joinder of claims by plaintiffs or against defendants if the claims “aris[e] our of the same transaction, occurrences, or series of transactions or occurrences and if any question of law or fact common to all these person will arise in the action.” Fed. R. Civ. P. 20(a). The determination of whether claims arise out of the same transaction or occurrences for purposes of Rule 20 is determined on a case-by-case basis. Mosley v. General Motors Corp., 497 F.2d 1130, 1333 (8th Cir. 1974). Applying the transactional test for permissive joinder, which requires that the parties must assert rights (or have rights asserted against them) that arise from related activities, the court found that the claims in the case were not reasonably related or properly joined.

Robert Novak, former owner of the website Petswarehouse.com, filed a pro se suit against Google, Overture Services, Kanoodle, Judge-for-Yourself.com, and Biochemics in the Eastern District of New York, alleging trademark infringement and unfair competition among other claims. Novak alleged that the defendant owners of Internet search engines, contracted with the other defendants to manipulate website searches involving the words “pets” and “warehouse” such that the defendants’ websites appeared at the top of the search results instead of Novak’s website. Novak claimed that this arrangement was trademark infringement, a deceptive trade practice, and unfair competition. Novak also alleged that Google breached its own terms and conditions by refusing to remove material from its online discussion groups that Novak found offensive and that this refusal tortiously interfered with contractual relations. The defendants filed motions to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim. Defendant Google filed a motion to dismiss for improper venue and failure to state a claim with respect to Novak’s breach of contract claim. The court dismissed this count of Novak’s complaint, holding that Google is immune from liability under 47 U.S.C. § 230, which provides that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." The court also held that a forum selection clause in Google’s terms and conditions is enforceable and dismissed all claims based upon the performance of those terms and conditions for improper venue.

IMS Inquiry Management Systems Ltd. sued competitor Berkshire Information Systems Inc. in the United States District Court for the Southern District of New York for damages and injunctive relief arising from Berkshire’s alleged unauthorized access to and use of IMS’s e-Basket advertisement tracking system. Such access, achieved by obtaining a user’s ID and password, caused that third party to breach its contract with IMS resulted in the copying of eighty five percent of IMS’s report formats. Thus, this case brings about several claims, out of which we will single out those under the Computer Fraud and Abuse Act, the Copyright Act, and the Digital Millennium Copyright.Computer Fraud and Abuse Act claim

On March 12, 2004 a New York District Court asserted jurisdiction over iMesh.Com, Inc., a file sharing company incorporated in Delaware, and its Israel-based subsidiary. Plaintiffs, a group of music recording companies, alleged that defendants operated an online peer-to-peer file sharing service which encourages and facilitates unlawful copying and distribution of plaintiffs’ sound recordings, thereby infringing their copyrights under U.S. copyright law. The Court denied defendants’ motion to dismiss, which was based on lack of personal jurisdiction, the doctrine of forum non conveniens and the plaintiffs’ failure to state a claim.First, the Court stated that personal jurisdiction may be exercised if New York’s long arm statute allows it and if the assertion of jurisdiction would comport with the requirements of due process. According to the Court, for the latter requirement to be met, defendants must have had “minimum contacts” with the State of New York and the assertion of jurisdiction must comport with “traditional notions of fair play and substantial justice”, which means that the exercise of jurisdiction must be reasonable under the circumstances of the particular case.

On March 15, 2004, Judge Richard Owen of the U.S. District Court for the Southern District of New York reinstated a preliminary injunction against software manufacturer 321 Studios (“321”). The March 3 injunction, which had been temporarily stayed by Judge Owen, bars 321 from manufacturing, selling, or promoting its DVD-copying software. The company is also barred from moving its assets without court approval. Paramount Pictures and Twentieth Century Fox had requested injunctive relief from the court, contending that 321, by selling software capable of circumventing DVD copy controls, was guilty of violating the anti-trafficking provisions of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 1201. 321 claimed that its software did not violate the act because it was not “primarily designed or produced for the purpose of circumventing CSS” and had legitimate fair use purposes. The court rejected these arguments as well as 321’s constitutional challenges to the DMCA, citing Universal City Studios, Inc. v. Reimerdes, 82 F.Supp.2d 211 (S.D.N.Y. 2000); Universal City Studios, Inc. v. Reimerdes, 111 F.Supp.2d 294 (S.D.N.Y. 2000); and Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001).

Plaintiffs, consisting of performers and business owners who use public domain works in their professions, filed an amended complaint in April 2004 seeking declaratory and injunctive relief from the Sonny Bono Copyright Term Extension Act of 1998 (CTEA) and § 514 of the Uruguay Round Agreement Act (URAA) for unconstitutionally removing literary and artistic works from the public domain. Section 514 of the URAA restored full copyright protection to all foreign works which had been exploited in the U.S. without authorization in the past because of failure to comply with U.S. formalities. Copyrights in eligible foreign works are restored automatically from the “date of restoration.” Since restoration is automatic, the owner of the restored copyright does not have to register this work. Because the URAA re-copyrighted many public domain movies, shows, and musical pieces, sale and performance of these art works became illegal.On March 15, 2004, the court denied the government’s motion to dismiss. While striking one claim pertaining to the CTEA, the court allowed the remaining three out of four counts of the complaint to proceed.

In November 2001, a New Hampshire police department obtained a warrant to search the defendant Syphers’s apartment while investigating allegations that he had sexually assaulted three teenaged girls. In executing the warrant on November 5, 2001, the police seized a number of items, including the central processing unit (“CPU”) and other components of a desktop computer. Subsequently, on November 28, 2001, the state successfully obtained a warrant authorizing a search of the CPU, based on an application and sworn affidavit. The same day, the court allowed the state additional year to execute the search, on the ground that inspecting the CPU would require assistance from the state police, who were then faced with “an overwhelming backlog in similar computer crimes” and accordingly needed between nine and twelve months to complete the task. The application for additional time was not supported by a sworn affidavit.New Hampshire state police finished searching the CPU in June 2002, after spending seven months decoding the encryption which protected the file where the claimed pornographic images were allegedly discovered. Syphers was charged with and convicted of assault in a New Hampshire state court.