Testimony of Professor Dan L. Burk,

University of Minnesota Law School

Before the Subcommittee on Courts and Intellectual Property

United States House of Representatives Committee on the Judiciary

June 29, 2000

Mr. Chairman and Members of the Subcommittee:

My name is Dan Burk; I am a Professor of Law and Vance K. Opperman Research Scholar at the University of Minnesota Law School, where I teach courses in the areas of intellectual property and cyberlaw. For the past several years, a particular focus of my teaching and scholarship has been on legal issues related to the global communications medium of the Internet. I am very pleased to appear before you today to offer background testimony on the issues and obstacles facing the federal courts as they assume their role in adjudicating matters related to the Internet. This is a challenging and important topic, and I applaud your leadership, Mr. Chairman, and that of your colleagues in addressing this set of issues.

When the global computer network we call the Internet first exploded into popular consciousness, the public appropriated from science fiction a new word to describe the sense of place inherent in this new communications medium -- cyberspace. So compelling was this feeling of separateness, of a digital realm outside of physical space, that some commentators proposed that the Internet should somehow comprise its own territory, beyond the jurisdiction of any geographic nation-state. This lead some to conclude that on-line activity might lie beyond the reach of current law, or that such activity might somehow constitute a law unto itself.

Yet, however compelling the sense of separate space users may have when interacting with the global computer system, arguments proposing the network as a separate legal jurisdiction confuse metaphor with reality. As Michael Froomkin at the University of Miami has observed, no one lives in "cyberspace." The activities and interactions of cyberspace are generated by people in the physical world, located within the borders of geographic nations, and have physical and social effects within the territories of those nations. Neither do we treat any other communications medium in this fashion; we do not speak of the "telephonespace" in telephone system as comprising its own jurisdiction, or of "broadcastspace" in the broadcast medium as comprising its own jurisdiction.

At the same time, there is no denying that the Internet is jurisdictionally unusual. More than any previous communications medium, it links individuals and entities across geographic jurisdictions, allowing activity that rapidly traverses political borders. The result is that on-line activity may involve individuals in multiple jurisdictions, affecting the social, political, and economic situation within the borders where those individuals reside. Each of jurisdictions effected thus has a stake in regulation of the on-line activity that will impact its citizens. The inevitable result is the assertion of legal jurisdictions by a multiplicity of sovereigns.

This result is quite the opposite of that which would obtain under the theory of the cyberspace as a separate territory: rather than too little jurisdiction over the Internet, there may well be too much jurisdiction, as the many geographic states and nations connected to the medium vie to regulate the on-line activity that originates or terminates within their borders. The great challenge facing the federal courts as they begin to adjudicate legal disputes arising out of on-line activity will be to sort and prioritize the many overlapping jurisdictional assertions that might be applied to the Internet. The great challenge facing the members of this body and their colleagues will be to ensure that the courts have the tools necessary to accomplish this daunting task.

The federal courts have of course already begun to grapple with some of these issues, using the analytical tools now available. From the issues that been identified to date, it is already possible to discern some of the recurring problems that the courts will face. I shall use some of these current experiences to illustrate the range of issues facing the courts, drawing one example from the three areas of legal procedure that comprise the procedural requirements of court jurisdiction: the first from the area of subject matter jurisdiction, or court authority over the type of dispute; the second from the area of personal jurisdiction, or court authority over a party to the dispute; and finally a third from the area of venue, or proper location of the adjudicatory forum. Additionally, I shall draw the first two examples from civil court procedure, and the third from criminal court procedure, in order to illustrate the unique problems posed by each of these differing areas of procedural law.

Subject Matter: Territoriality

The Internet reaches over national borders, but if national laws are to be applied to transborder activity, customary international law requires that there must be some connection with the nation whose law is being applied. The oldest and best-recognized basis for application of law is territoriality, by which the law of a nation is properly applied within the borders of its territory. This principle is of limited assistance when the activity occurs outside the border, as may occur on the Internet. Other principles of jurisdiction exist, such as the nationality principle: a nation may regulate the activity of its citizens wherever they are located. But beyond these readily accepted jurisdictional bases, exercise of extraterritorial jurisdiction becomes controversial.

As a consequence, the courts have developed principles limiting the extraterritorial reach of statutes. The general presumption in U.S. law, articulated repeatedly by the Supreme Court, has been that unless Congress expressly indicates otherwise, statutes are presumed to be territorially circumscribed.⁽¹⁾ This presumption was adopted in part to avoid potential conflicts with the substantive law of other nations.^{(2) The presumption thus places the majority of U.S. statutes by default on the most firm and widely accepted basis of sovereign authority, while recognizing legislative competence to exercise sovereignty on some other basis. Congress can exercise authority on one of the other, possibly more controversial bases, but the Court will not presume this to be the case without is some indication that the legislature intends to do so. Additionally, this approach also implies an inherent separation of powers rationale: if Congress, with its responsibilities for foreign relations, wishes to potentially intrude on the prerogatives of other sovereigns, then it can explicitly do so, but the courts will not take it upon themselves to infer such an intent.}

A clear example of this principle is found in a substantive area of law with which this committee is quite familiar: intellectual property. Because of the territoriality presumption, federal courts have repeatedly held that U.S. patent and copyright law end at the border, because the federal statutes that give rise to such intellectual property contain rights no express exercise of extraterritorial authority.^{(3) But federal trademark law has been treated differently, in part because of its constitutional pedigree. Unlike the patent and copyright statutes, which rest upon the patent and copyright clause, the Lanham Act draws upon the constitutional commerce power, and the statute contains language extending the Act to "all commerce" that may be lawfully regulated by Congress.(4) This would include not only interstate commerce, but also foreign commerce. The courts have taken this language as express authority to apply the Lanham Act extraterritorially, and they have done so with some frequency.(5)}

Although this minimalist default principle of territoriality displays admirable prudence and restraint in extending the reach of U.S. law, it has the disadvantage of being an inference drawn from silence. It may well be that Congress intended trademark law to be extraterritorial and copyright not to be. Or it may simply be that Congressional silence on copyright territoriality means that Congress did not consider the international scope of copyright at all. In a world of transborder computer networks, it may be desirable to give courts clear and explicit guidance as to the reach of federal statutes, rather than leaving them to interpret the lack of explicit guidance.

Personal Jurisdiction: Fifth Amendment Contacts

A second matter that has been the subject of considerable consternation is the scope of personal jurisdiction in U.S. courts where on-line activity is concerned. Traditionally, jurisdiction over an individual was premised on the physical presence of the person in the forum; this continues to be a viable jurisdictional basis.^{(6) , the Due Process Clause of the Fourteenth Amendment constrains state courts from exercising personal jurisdiction over defendants who lack sufficient contacts with the forum state.(7) Via "long-arm" statutes, states may authorize their courts to exercise jurisdiction over extraterritorial defendants up to the limits of inherent in the Fourteenth Amendment. A court may exercise jurisdiction over the defendant if the defendant has "minimum contacts" with the forum such that he or she might anticipate defending the particular type of legal claim there. Unless the defendant has sufficient quantum of contact with the forum state, that state's exercise of jurisdiction over the defendant would offend "traditional notions of fair play and substantial justice."}

The Supreme Court has also offered a list of five jurisdictional "fairness factors" that may require a separate assessment, especially when the defendant's contacts with the forum are attenuated.^{(8) The factors to be weighed before subjecting the defendant to jurisdiction include the inconvenience to the defendant of defending in that forum, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in efficient resolution of interstate conflicts, and the shared interest of the states in furthering substantive social policies. Additionally, where jurisdiction over foreign nationals is at issue, the Supreme Court has indicated that potential interference with the procedural and substantive policies of other nations, as well as the impact on the foreign relations policies of the United States may constitute additional fairness factors for consideration.(9)}

^{These due process considerations constrain the reach of state courts. But the source and potential scope of authority for federal courts is quite different. Where federal courts are concerned, similar due process considerations apply, but arising under the Fifth Amendment constitutional constraints on the federal government, rather than the Fourteenth Amendment constraints on the states.(10) Under an unfettered Fifth Amendment jurisdictional analysis, Fourteenth Amendment concerns surrounding state sovereignty vanish, as there is no question of interstate comity when the sovereign in question is the federal government.(11) Due process considerations of fairness and affiliating contacts remain central in a federal jurisdictional analysis, but contacts inquiry may in theory consider contacts with the nation as a whole, rather than with any particular state.(12)}

However, at present federal courts are seldom able to exercise personal jurisdiction to the full extent that the Fifth Amendment might allow. The jurisdictional reach of federal courts is set by Congress within the limits of Fifth Amendment due process, and Congress has generally instructed federal courts to exercise no more jurisdictional authority than would a state court sitting in the same territory. This jurisdictional limitation has been closely tied to service of process: federal courts are constrained by the service is permitted under the "long-arm" statute of the state in which the federal court is situated.^{(13) However, in "federal question" cases where a federal statute authorizes nationwide service of process, a federal court may instead exercise jurisdiction to the nationwide limits of the Fifth Amendment.(14) Additionally, under Federal Rule of Civil Procedure 4 (k)(2), a district court may look to the nation as a whole to aggregate contacts if the jurisdiction conferred under the local long arm statute is insufficient and if jurisdiction would not lie in any other district.(15)}

^{One can easily imagine situations in which on-line activity would be too diffuse to support personal jurisdiction in any individual state. Under the current Federal Rules of Civil Procedure, federal courts will often be just as powerless to exercise jurisdiction as would the state courts in a given area -- not because of constitutional constraints, but because of the limits of Congressional authorization. But this need not necessarily be the case. Congress has a variety of options to expand the latitude of federal court jurisdiction, for example by taking pains to ensure each statute that might be applied to the Internet has a provision for nationwide service of process. Alternatively, Congress could authorize federal court jurisdiction to the limits of the Fifth Amendment in situations other than the unusual case addressed by FRCP 4 (k) (2). At a minimum, Congress could authorize federal courts to engage in service of process to the limits of the fourteenth amendment, even if the currently applicable state long-arm statute does not do so.}

Venue: Criminal Adjudication

Unlike civil trials, where the possibility of default judgments requires an extensive jurisprudence of fairness in personal jurisdiction, questions of criminal jurisdiction will almost always be couched in terms of venue. This is because criminal jurisdiction is always based upon the physical presence of the defendant within the forum and before the tribunal.⁽¹⁶⁾ The constitution's confrontation clause precludes criminal "default judgments." In turn, physical presence for a criminal trial within the United States is almost never an issue because of the constitution's extradition clause⁽¹⁷⁾ and an implementing extradition compact among the states⁽¹⁸⁾ -- as long as there is a facially proper complaint, extradition is available. As a practical matter, then, a criminal jurisdiction question can really only turn on whether there was a facially proper complaint, that is, whether there is probable cause to believe that the defendant committed all or part of the crime alleged within the venue of the particular forum. Under criminal jurisdictional doctrine, venue lies if a material element of the crime was initiated or completed within the forum.⁽¹⁹⁾ For some multi-jurisdictional crimes, such as kidnapping, a material element of the crime need only have been in the process of execution within the forum.⁽²⁰⁾

The interaction of these rules may subject Internet to unexpected criminal liability in almost any jurisdiction with Internet connectivity. Once venue is properly established, obtaining extradition -- and hence jurisdiction over the person of the defendant -- from another state is relatively trivial. This problem was demonstrated in a non-Internet electronic communications case, United States v. Thomas.⁽²¹⁾ The defendants were convicted of supplying obscene materials to Memphis Tennessee from their dial-up computer bulletin board service (BBS) in Milpitas, California. The defendants argued that venue in Tennessee was improper because the files were downloaded by a subscriber, rather than sent by the BBS operators. The court rejected that argument, holding that because the effects of the defendants' conduct reached Tennessee, venue was proper there. At least one subsequent court has expressed concern about the application of this standard to the medium of the Internet, because unlike the BBS operators in Thomas, the owners of websites have little control over where their material may be downloaded.⁽²²⁾ Some guidance to the courts or amendment to the rules governing venue may be required in order to resolve issues of this type.

^Conclusion