Is There a There There - Toward Greater Certainty for Internet Jurisdiction

Abstract

The unique challenge presented by the Internet is that compliance with local laws is rarely sufficient to assure a business that it has limited its exposure to legal risk. Since websites are accessible worldwide, the prospect that a website owner might be haled into a courtroom in a faroff jurisdiction is much more than a mere academic exercise, it is a very real possibility. The article identifies why the challenge of adequately accounting for the legal risk arising from Internet jurisdiction has been aggravated in recent years by the adoption of the Zippo legal framework, commonly referred to as the passive versus active test. The test provides parties with only limited guidance and often results in detrimental judicial decisions from a policy perspective. Given the inadequacies of the Zippo passive versus active test, it is now fitting to identify a more effective standard for determining when it is appropriate to assert jurisdiction in cases involving predominantly Internet-based contacts. With the benefit of the Zippo experience, the new test should remain technology neutral so as to: a) remain relevant despite ever-changing web technologies; b) create incentives that, at a minimum, do not discourage online interactivity; and c) provide sufficient certainty so that the legal risk of operating online can be effectively assessed in advance. The solution submitted in the article is to move toward a targetingbased analysis. Unlike the Zippo approach, a targeting analysis would © 2001 Michael Geist. t Assistant Professor, University of Ottawa Faculty of Law, and Director of ECommerce Law, Goodmans LLP. The author would like to thank the Uniform Law Conference of Canada and Industry Canada for their financial support in sponsoring this paper; Teresa David and William Karam for their research assistance; Vaso Maric, Rene Geist, Harvey Goldschmid, Ted Killheffer, Denis Rice, as well as the participants at the Consumer Measures Committee/Uniform Law Conference of Canada April 2001 Workshop on Consumer Protection and Jurisdiction in Electronic Commerce, the TPRC 2001 Conference, and the Georgetown University Advanced E-commerce Institute, for their comments on earlier versions of this paper; the editors of the BERKELEY TECHNOLOGY LAW JOURNAL for their excellent work in bringing this paper to publication; and to Allison Geffen for her continued love and support. Any errors or omissions remain the sole responsibility of the author. 1346 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1345 seek to identify the intentions of the parties and to assess the steps taken to either enter or avoid a particular jurisdiction. Targeting would also lessen the reliance on an effects analysis, the source of considerable uncertainty since Internet-based activity can ordinarily be said to create some effects in most jurisdictions.