Copyright © 1998 by the American Bar Association; Henry H. Perritt, Jr
Henry H. Perritt, Jr. [FNa1]
Eli Noam recently wrote:
[C]ommunications are a matter not just of signals but of people, institutions and physical hardware; the arm of the law can reach them. A government will go after static and physical elements if it cannot reach mobile or intangible ones. For example, instead of taxing transactions over the Internet, which will prove difficult and inefficient, a government might tax the physical delivery-a 'U.P.S. tax.' Instead of controlling information, it might mandate hardware to do so, like the V-Chip in television sets. [FN1]
I criticized this view as too narrow.
Mr. Noam is correct that national governments will probably seek to regulate the Internet by concentrating on people and institutions rather than on signals, but he is wrong to conclude that this will subject the Web to regulation like that for other media. Punishing a local institution, like a service provider, for content originating in another country risks isolating the regulating government. [FN2]
The Internet rapidly is becoming an attractive market and political arena. As with other markets and political arenas, some users engage in conduct that injures other users. Some of this injury takes the form of consumer fraud, defamation, offensive communication, harassment and infliction of emotional distress. Legal doctrine aimed at allocating the loss incident to such conduct is being applied, *1122 with some adaptation, to the Internet. But because conduct on the Internet can occur as easily halfway around the world as halfway down the block, remedies called for by legal doctrine may not easily be realizable. In a growing popular and scholarly literature, this is known as a "jurisdiction" problem, signifying that a legal institution charged with adjudicating claims of legally impermissible conduct causing injury may lack the power to compel redress. [FN3]
The Internet produces few interesting problems when a dispute and a resulting civil judgment are entirely local; the victor-the judgment creditor-simply gets a writ of execution under local procedure and has the sheriff levy such personal or real property of the judgment debtor as can be found. The problems of turning a judgment into liquid assets become more difficult when the judgment comes from another state or from another country. [FN4] A plaintiff may obtain a judgment against an Internet service provider in an Alabama circuit court, but may find assets worthy of executing against only in Virginia. Execution thus must be sought in a Virginia court based on the "foreign judgment" from Alabama. Similarly, an author in Sweden may obtain a judgment in a Swedish court for copyright infringement resulting from an act by the operator of an Internet server in Massachusetts. In order to obtain monetary relief, the victim must enforce the Swedish judgment against assets held by the server operator in Massachusetts. A fairly rich doctrinal framework already exists for determining extraterritorial jurisdiction to prescribe rules, to adjudicate cases, and to enforce judgments.
But jurisdiction-as most people understand the term-is not the problem. Well established international law principles of personal jurisdiction (a subset of "jurisdiction to adjudicate"), enshrined in the U.S. Supreme Court case of International Shoe v. Washington, [FN5] handle transnational Internet disputes with little difficulty. International Shoe's rules are perfectly adaptable to cyberspace, and it is not difficult to assess minimum contacts and "fair play and substantial justice" for conduct occurring on the Internet. Therefore, the established rules under International Shoe that in turn reflect the principles of international jurisdiction can be applied. Interesting jurisdiction issues are only at the periphery of the new universe of activities.
*1123 The real problem is turning a judgment supported by jurisdiction into meaningful economic relief. The problem is not the adaptability of International Shoe-obtaining jurisdiction in a theoretical sense. The problem is obtaining meaningful relief. If an old lady in Richmond, Virginia is the victim of fraud perpetuated through the Internet by someone located in Belgium, she has a reasonable chance of convincing a Virginia circuit court that it has jurisdiction over the Belgian actor. Unless the fraud is enormous, the Belgian actor is unlikely to appear and she is likely to get a default judgment. But what can she do with her default judgment? [FN6] Even if the Belgian legal system, through its equivalent of the comity doctrine, will enforce the judgment, it is improbable that she will spend the money to get a Belgian lawyer to enforce the judgment in Belgium. The transaction costs dwarf the value of the claim.
The practical problem is one of enforcement, not jurisdiction. [FN7] Enforcement can be improved by improving the mechanisms for obtaining recognition of foreign judgments so as to increase their effectiveness and reduce transaction costs. [FN8] It can be improved by establishing private legal systems that undertake to enforce foreign judgments. It can be improved by focusing on a new kind of property-Internet domain names. The most interesting possibility is the last one. Internet domain names are physically present throughout cyberspace and thus present an attractive mechanism for enforcement.
Recent proposals for reorganizing the registration of Internet domain names provide possibilities for a new regulatory system that can help solve the enforcement problem. Withdrawing a domain name is equivalent to banishing someone from the Internet. The same private, transnational system that registers domain names can also make and enforce rules. It can become a new type of 'government,' joining the nongovernment organizations, private financial networks and treaty-based institutions that represent new forms of regulation. The possibility of granting relief in civil disputes through the Domain Name System (DNS) is closely related to two-more speculative- possibilities: subjecting domain names to attachment by a variety of legal institutions and developing a system for a kind of "bond" that could be available for redress of otherwise irremediable grievances resulting from Internet misconduct.
This article considers whether the growing value of Internet domain names makes them a sufficient anchor for jurisdiction exercised by new tribunals linked to domain name registries, initially proposed by an Internet International Ad Hoc Committee (IAHC). IAHC reported in March 1996 on privatization and *1124 globalization of the DNS. [FN9] Subsequently, the U.S. government, the European Commission, and several other private groups developed similar plans for private regulation of Internet domain names. The article evaluates the relationship between traditional courts and these new fora for adjudication, considering traditional concepts of jurisdiction to adjudicate and to enforce. [FN10] Then, more speculatively, the article considers possibilities for new kinds of "bonds" that might secure victims of cyberspace misconduct against judgment-proof malefactors.
I have argued elsewhere [FN11] that the Internet, along with other types of information technology, threaten traditional intermediaries such as state government institutions, the press, and nationally based membership organizations because of its international character and low economic barriers to entry. At the same time, I argued that the Internet can strengthen international institutions, including treaty based institutions and nongovernmental organizations (NGOs). I have also explored possibilities for Internet self-government. The development of new forms of judgment execution and new forms of judgment rendering institutions through the Internet are but examples of these larger phenomena.
II. Three Types of Territorial Jurisdiction
International law recognizes three types of jurisdiction in both the civil and criminal contexts: jurisdiction to prescribe, jurisdiction to adjudicate, and jurisdiction to enforce. [FN12] Jurisdiction to prescribe relates to a state's power under international law to apply its substantive law. [FN13] Jurisdiction to prescribe thus relates to choice of law and to legislative acts, and most commonly is involved *1125 in arguments over whether a particular law has "extraterritorial effect." Jurisdiction to adjudicate encompasses what American litigators usually call "personal jurisdiction." It encompasses the power of a court or other adjudicatory tribunal to decide a dispute between two parties or with respect to a thing. Jurisdiction to enforce applies to executive acts such as investigation, arrest, pre-judgment attachment, and execution of judgments against property. It also includes imposition of economic sanctions such as trade barriers, freezing of assets, or immigration restrictions such as those imposed under the Helms-Burton Act. [FN14]
Historically, all three types of jurisdiction were territorial, based on the idea that sovereignty implies exclusive power within the territory of the sovereign and no power outside it. Application of this concept became difficult, however, as soon as commerce and industrialization proceeded to the point that conduct outside the territory of a state could have effects inside it. The allowable bases for jurisdiction expanded to include nationality of the actor or victim [FN15] and protection of core state interests such as national security, which justifies exercise of jurisdiction over spies. Universal jurisdiction justifies the exercise of jurisdiction by any state over certain crimes agreed by the community of nations to be universal.
The customary bases of jurisdiction can be expanded or contracted by treaty.
A. JURISDICTION TO PRESCRIBE
Jurisdiction to prescribe would be at issue if an action were brought in a court with indisputable adjudicatory jurisdiction; for example, in a court of the place where the web server with the disputed content is located-say Montana. Whether that court should apply American or German law implicates jurisdiction to prescribe. German law can be applied only if Germany has prescriptive jurisdiction. Jurisdiction to prescribe raises questions of the power of the German law-maker (parliament or executive agency with rulemaking power) over the subject matter of the dispute. Jurisdiction to prescribe raises larger value questions. Germany prohibits hate speech and defines it broadly enough that the prohibition encompasses speech that would be protected by the First Amendment in the United States. To apply German hate speech law to expression originating in the United States thus involves a clash between German and American law on matters of great public concern. [FN16]
*1126 Under widely-held views of international law, a country, such as Germany in the example, has jurisdiction to prescribe with respect to conduct that has effects in its territory. This is called the "objective territoriality" basis of prescriptive jurisdiction. But this "effects test" is not always enough by itself to justify the exercise of jurisdiction. Section 403 of the Restatement (Third) of Foreign Relations Law of the United States includes a requirement that the exercise of jurisdiction be reasonable, taking into account the respective interests of other jurisdictions as well as the one in which the effects are felt.
The combination of these two tests means that both the proponent and the opponent of applying German hate speech law to Internet conduct originating in Montana would have respectable arguments. The proponent would argue that the effects of the hate speech are felt in Germany just as much as if the web server containing the offensive speech were located in Hamburg. German interests are involved because the purpose of prohibiting hate speech is to limit inflaming ethnic and racial hatreds, the very threat posed by the Montana web server. The opponents would argue that the First Amendment is a legitimate exercise of U.S. jurisdiction to prescribe, and supports the interest in uninhibited speech uttered in the United States. That is exactly what transpires through the web server, and thus mandates application of U.S. law. Acceptance of either argument would no doubt engender much controversy in the jurisdiction whose law was not applied.
To be sure, practical aspects constrain the reach of legal systems even when the theory of jurisdiction to prescribe seems to extend them. Even if German legal institutions have jurisdiction to prescribe rules for conduct originating in the United States, they may lack the capability of enforcing those rules against someone who remains in the United States. This inability to enforce will exist unless they exercise enforcement power in the United States on their own with or without jurisdiction to enforce, or unless some treaty mechanism such as an extradition treaty permits them to obtain physical custody of the alleged wrongdoer. The states opposing expansive jurisdiction to prescribe can protect their own sovereignty by narrowly construing jurisdiction to enforce.
To the extent that a treaty defines illegal conduct, jurisdiction to prescribe no longer is an issue because all states that are signatories to the treaty have exercised their jurisdiction to prescribe in the same terms by agreeing to be bound by the treaty.
B. JURISDICTION TO ADJUDICATE
Prescriptive jurisdiction rules are instantiated in choice of law rules applied by particular tribunals. Jurisdiction to prescribe and a rule made within the scope of that jurisdiction are legal abstractions until the rule is applied in a particular case. Rule application involves adjudication by an entity with jurisdiction to adjudicate. A pure question of jurisdiction to adjudicate would be presented if a German court sought to adjudicate the application of Montana law to the Montana *1127 web server. (Montana has undisputable jurisdiction to prescribe with respect to web publishing activities physically taking place within its territory). [FN17] Jurisdiction to adjudicate includes power over the subject matter of the controversy, "subject-matter jurisdiction," and power over the parties, "personal jurisdiction." The limits imposed on personal jurisdiction by the due process clauses of the United States Constitution are closely related to the limitations imposed by international law. [FN18] Those limitations are geographic, linked to the geographic boundaries of traditional sovereign states.
Personal jurisdiction (jurisdiction to adjudicate) of an American court, state or federal, depends on the interaction of an affirmative statutory or common-law source of jurisdiction, and limitations imposed by constitutional due process. [FN19] Traditionally, state courts asserted jurisdiction over persons physically present within their territorial boundaries and served with process while they were there, and asserted jurisdiction over things found within their territorial boundaries and attached while they were there. [FN20] The first basis was called in personam jurisdiction; the second was called in rem jurisdiction. [FN21] Under the Supreme Court's decision in Burnham v. Superior Court, [FN22] the fact that these two types of jurisdiction are traditional apparently is enough to make them satisfy due process. [FN23] The two traditional types of jurisdiction had the advantage that the state had physical power over the *1128 defendant or over their property. A judgment could be enforced either against the body of the defendant or against the defendant's property.
Newer bases of jurisdiction, although allowing broader reach of courts theoretically, break the link between jurisdiction and enforcement. Under a line of Supreme Court cases beginning with International Shoe Co. v. Washington, [FN24] jurisdiction is permissible over a person or a corporation not found within the jurisdiction and served with process there when the defendant has minimum contacts with the forum state, and when the assertion of jurisdiction satisfies considerations of "fair play and substantial justice." [FN25] When a defendant is a nonresident or is not physically present in the jurisdiction, personal jurisdiction may be obtained over a defendant if a court finds that the defendant has established "certain minimum contacts with the forum such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice."' [FN26] This two part analysis begins with an assessment of the defendant's minimum contacts with the forum. In determining minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation." [FN27] The second part of the analysis focuses on the contacts "in light of other factors to decide whether the assertion of personal jurisdiction would comport with 'fair play and substantial justice."' [FN28]
III. European Treaty Bases
Personal jurisdiction concepts in Europe place less emphasis on service of process while a defendant is physically present, and greater emphasis on factors *1129 that fit comfortably within the minimum contacts concept in American jurisprudence. [FN29] Thus, a defendant may always be sued where he lives, and nonresident defendants may also be sued when they have intentionally engaged in transactions with someone in the forum state. [FN30] Beyond that, some European countries assert what is known as "exorbitant bases of jurisdiction." France and Scotland are examples. One exorbitant basis permits courts in the plaintiff's place of residence to hear suit against nonresident defendants, at least when the claim has some relationship to the jurisdiction. Another allows what Americans would call quasi in rem jurisdiction. A third allows jurisdiction over anyone served with process while temporarily present within the forum-so-called "tag" jurisdiction. [FN31]
IV. Typical Cyberspace Contexts
Federal courts of appeals adapt traditional principles of jurisdiction to adjudicate cases involving web publishing. In Bensusan, [FN32] the Second Circuit found personal jurisdiction to be lacking because the operator of a web page located in Missouri did not intend the trademark infringement allegedly occurring in New York. In Patterson v. CompuServe, [FN33] the United States Court of Appeals for the Sixth Circuit concluded that a district court in Ohio had personal jurisdiction over a Texas defendant based on the Texas defendant entering into a contract by electronic messages with an electronic service located in Ohio. The contract contemplated performance of various functions by the Ohio operator. In Cybersell, [FN34] the court found that the mere existence of information on the web, without more, is not enough to support jurisdiction in another state, even though the information is visible there. [FN35] In Panavision, *1130[ FN36] a federal district court in California concluded, based on facts indicating that the purpose of obtaining the domain name was to demand money from the California plaintiff, that it had jurisdiction over an Illinois defendant who obtained a domain name similar to the trade name of the California plaintiff. [FN37] A state trial court decision, Minnesota v. Granite Gate Resorts, Inc., [FN38] found jurisdiction over a gambling service, WagerNet, based in Belize but advertising in Minnesota. Granite Gate is a "sport" case, not very carefully reasoned in terms of legal principles. [FN39]
The typical context for a jurisdictional problem in cyberspace involves informational conduct such as sending an e-mail message or posting something on a website in one place and receiving the information in another place. Typically, the actor is a national of the place of sending. There is obviously no controversy if the information is legal under the law of both the sending and the receiving jurisdiction. But often the information is illegal in one or both jurisdictions. If it is illegal under the laws of both jurisdictions, the issue is one of jurisdiction to adjudicate and to enforce. If it is legal in the sending jurisdiction, but illegal in the receiving jurisdiction, jurisdiction to prescribe arises, because if the receiving jurisdiction punishes or imposes liability for the conduct (or seeks to have the sending jurisdiction do so), the receiving jurisdiction arguably is in the position of extending the reach of its substantive law to conduct occurring outside its physical boundaries.
*1131 Extending the bases of jurisdiction is a two-edged sword. United States citizens may be able to assert U.S. law in U.S. courts with respect to harmful conduct occurring offshore, but they also may be subject to prosecution or litigation in foreign tribunals. One circuit judge recently noted the growing likelihood, because of changes in information technology and the predominance of globalization, that American citizens might become subject to criminal prosecution in other countries through the extradition process. United States extradition law no longer excludes U.S. citizens as absolutely as was formerly the case. Increased incidence of foreign civil litigation ensnaring Americans can be anticipated if concepts of jurisdiction to adjudicate are enlarged.
Several recent controversies illustrate how the Internet invites extension of jurisdiction. In 1996-1997, a small number of Internet casinos began operating. They offer the opportunity to gamblers located anywhere in the world to place bets on their webpages. In reaction, the Attorney General of Minnesota [FN40] and the Attorney General of Missouri commenced criminal proceedings and civil injunctive proceedings respectively against gamblers and the operators of the Internet casinos. [FN41]
In all of these cases, there was a plausible basis for the exercise of jurisdiction by the courts, based on traditional notions of jurisdiction to adjudicate expressed in the International Shoe [FN42] doctrine.
V. Meaningful Enforcement is the Problem
On the other hand, a theoretical basis for jurisdiction to adjudicate is not enough. How is a judgment by the courts in Minnesota or Missouri to be enforced against the foreign gambling casino? Suppose the defendant in the CompuServe, Panavision, or Bensusan cases had been foreign rather than American. In the absence of any full faith and credit clause spanning national boundaries, how would a judgment against the defendant be enforced? The equivalent of the sheriff in the places where the defendant is found would not- and would not be authorized under most legal doctrines to-enforce these foreign judgments. In other words, that sovereign would lack jurisdiction to enforce. Jurisdiction to enforce can be created by asserting a local claim for judgment recognition (thus bringing the controversy within local jurisdiction to prescribe rules of recognition) in a tribunal with power over the parties (thus bringing the case within jurisdiction to adjudicate) *1132 and obtaining a local writ of execution. A local officer would have jurisdiction to enforce a local writ of execution. Obtaining a domestic judgment based on the foreign judgment would, however, even if authorized by customary international law in this fashion, probably be so expensive as to not be feasible in an economic sense.
Under international law, jurisdiction to enforce does not exist in a judicial body unless it also has jurisdiction to adjudicate. Jurisdiction to adjudicate can be based on physical presence of either property or a person. Thus, a court in the location of a person who has the power to satisfy a judgment issued by another sovereign could issue a writ of execution or an injunction based on the first judgment. That situation exists because personal presence gives the enforcing sovereign the jurisdiction to adjudicate. This is classic in personam jurisdiction. Or, a court in the jurisdiction where property is located has jurisdiction to enforce a judgment from another sovereign against the property because it has jurisdiction to adjudicate based on the presence of the property. This is classic in rem jurisdiction. As one commentator has noted, in rem jurisdiction is based on the conclusion that a property interest in favor of the person asserting the jurisdiction already exists. [FN43] That, of course, is the situation whenever judgment execution is sought. The issuance of the judgment created a lien in favor of the judgment creditor. [FN44]
It is not only the relationship between jurisdiction and enforcement that is important; the nature of available remedies also matters. Remedies in law are principally intended to do three things. First, tort and contract damages compensate the victim. Second, punitive damages in civil law, and fines and incarceration in criminal law, are intended to deter misconduct by punishing actors. Knowledge of the possibility of such penalties deter misconduct. Third, remedies are intended to block further misconduct by the actor. Injunctions, backed up by coercive enforcement power, are clear examples, as is incarceration, which, while they continue, prevent further criminal misconduct by the actor.
Domain names as the centerpiece of transnational civil enforcement can serve only some of these purposes reasonably well. Revoking a domain name is a poor way of compensating a victim. Even if a domain name is awarded to a complaining *1133 party, that provides no compensation for past infringement of trademark, defamation, or consumer fraud. On the other hand, possible revocation of a domain name excludes the target from the Internet, and that possibility may have serious enough economic consequences to represent a major deterrent. If an entity believes it will be put out of business if it violates cyberspace rules, it will avoid violating those rules. Finally, revocation of domain names is effective as a means of preventing further misconduct by the target. Without a domain name, the target cannot repeat any further misconduct through the Internet. These relationships between remedial purposes and the impact of domain name revocation may encourage supplementation of any system of remedies based on domain names.
A. ENFORCEMENT AGAINST PEOPLE
Even when property is not found in a jurisdiction, enforcement may be achieved through power over persons with power over property located elsewhere. An Internet System Provider (ISP) executive in Hungary can be forced to shut down a web server in Singapore controlled by his enterprise. An injunction, called by different names in different legal systems, is used to force this shutdown. [FN45] Consideration of the geographic scope of an injunction reinforces the conclusion that jurisdiction to enforce is based on practical conceptions of power. Suppose a court in jurisdiction A issues a valid injunction against C1, prohibiting certain exchanges of files through the Internet. As long as C1 remains within jurisdiction A, its noncompliance may be punished by contempt. [FN46] But suppose C1 leaves the jurisdiction and violates the terms of the order in jurisdiction B. Or suppose C2 who has never been inside the jurisdiction cooperates with C1 to violate the order by providing C1 with an Internet connection in B. What power does the court issuing the injunction in A then have to punish either C1 or C2?
The answers are clear when a federal court in the United States has issued the injunction. By being served with process and participating in the lawsuit giving rise to the injunction, C1 is subject to the enforcement jurisdiction of the issuing court wherever he goes, anywhere in the world. "The decree ... bound the respondent personally. It was a decree which operated continuously and perpetually upon the respondent in relation to the prohibited conduct. The decree was binding upon the respondent, not simply within the district of Massachusetts, but throughout the United States." [FN47]
*1134 The second question is whether a nonparty to the original proceeding who remains outside the district in which the injunction is issued can nevertheless be punished by contempt for aiding and abetting a named party in violating the injunction. Suppose, in the hypothetical, C1 goes to B and obtains an Internet connection there from C3, who theretofore had no contact with jurisdiction A. The United States Court of Appeals for the Fifth Circuit in Waffenschmidt v. McKay, a securities fraud case, supported the view that a nonparty can be punished. [FN48] The district court issued a temporary restraining order (TRO) and preliminary injunction against McKay, ordering him not to transfer the proceeds of an alleged securities fraud. McKay nevertheless transferred money to three persons in Texas. The court issuing the injunction in McKay was located in the northern district of Mississippi. When the Texas actors were confronted with contempt orders, they challenged the jurisdiction of the district court. The district court held, and the court of appeals agreed, that the mandate of an injunction issued by a federal court runs nationwide, [FN49] that enforcement through a contempt proceeding must occur in the issuing jurisdiction "because contempt is an affront to the court issuing the order," [FN50] and that the issuing court may "therefore hold an enjoined party in contempt, regardless of the state in which the person violates the court's orders." [FN51]
So far, that was unremarkable. The next part of the court's reasoning is more significant. The court stated that "an injunction binds not only the parties named therein but also nonparties who act with the enjoined party," [FN52] and, therefore, that " t he nationwide scope of an injunction carries with it the concomitant nationwide power of the court to reach out to nonparties who knowingly violate its orders." [FN53] The court of appeals thought defendant McKay's actions a paradigm of how a named defendant can enlist the assistance of out-of-state persons to frustrate an injunction. [FN54]
The court found no problem with personal jurisdiction over the nonparties, concluding first that the acts of aiding and abetting placed the actors within the *1135 personal jurisdiction of the district court. [FN55] The due process requirements of International Shoe were not violated because a district court has inherent power to enforce its orders, and the purposefulness contacts requirements of International Shoe and World Wide Volkswagen were satisfied by the intentional assistance given the named enjoined party. [FN56]
It is important, however, to recognize that the rationale of Waffenschmidt extends only to nonparties who knowingly aid and abet a named enjoined party. The court of appeals extensively reviewed the evidence supporting knowledge and complicity on the part of the Texas actors. [FN57] But in Lynch v. Rank, [FN58] the district court distinguished Waffenschmidt and held that it did not have personal jurisdiction-and thus lacked contempt power-over an Oregon welfare official who failed to effectuate an injunction issued in a nationwide class action relating to Social Security benefits. The district court quoted Judge Learned Hand for the general rule that: " N o court can make a decree which will bind anyone but a party; a court of equity is as much so limited as a court of law; it cannot lawfully enjoin the world at large, no matter how broadly it words its decree." [FN59] It found the Oregon official outside its personal jurisdiction based on the minimum contacts framework of International Shoe because the Oregon official lacked the commonality of incentives and motivations with named defendants necessary to find that they were acting in concert or participating with each other. [FN60] The court thought the facts of Waffenschmidt, showing a common scheme to launder illegally obtained proceeds, entirely distinct. [FN61]
*1136 Another district court, in Reebok, [FN62] was reversed for following Waffenschmidt and distinguishing Lynch. It held a bank in Luxembourg in contempt for releasing funds within the scope of an earlier- issued injunction. The court noted that " t he basis of personal jurisdiction, if it exists, evolves out of the allegations that make out the contempt." [FN63]
The court of appeals reversed. It accepted the district court's analytical framework, applying the specific jurisdiction branch of International Shoe's tests for personal jurisdiction. [FN64] It found, however, that the district court's reliance on Waffenschmidt was misplaced, because Waffenschmidt logically built on the nationwide jurisdiction of federal courts. [FN65] It thought that the analysis "begins to crumble when a district court seeks to reach out across the Atlantic in an attempt to impose conflicting duties on another country's nationals within its own borders." [FN66] The TRO had not been registered in Luxembourg-apparently because the Luxembourg courts thought it did not qualify as a judgment or a claim that was certain and due, and thus was not an enforceable order in Luxembourg. [FN67] Thus conduct by the Luxembourg Bank, inconsistent with the terms of the order, could not be contempt. Because it had not engaged in contempt, it could not be said that it purposefully directed its activities toward the United States. [FN68] From a policy perspective, the court of appeals reasoned: " w e do not agree that when a national of a foreign country follows the law of that country in that country it can be dragged half way around the world to answer contempt charges arising out of a foreign court's ineffective order." [FN69]
In the international context, Reebok rather than Waffenschmidt applies. A person originally within the personal jurisdiction of the issuing court is bound by an injunction wherever in the world she may go. As long as she remains within the power of the court, she may be compelled by contempt penalties to transfer property (or to shut down a web server) located elsewhere, outside the court's jurisdiction. A person not originally within the personal jurisdiction of the court or not named as a party and served with process may fall within the personal jurisdiction of a court issuing an injunction by aiding and abetting a named party's violation of an injunction. What counts is notice and not the formalities of service. [FN70] The difficulty in any of these situations would be practical enforcement *1137 of the injunction extraterritorially. The Ninth Circuit Reebok opinion leaves open the possibility that if an American injunction is appropriately registered in a foreign country or otherwise attains legal status in that country, violation of that injunction might create personal jurisdiction in the American court issuing the injunction under the theory of Waffenschmidt. The problem in Reebok was that the injunction never attained that status in the foreign country. Judgment recognition statutes and doctrines generally exclude equitable remedies, [FN71] and thus it is unlikely that a foreign jurisdiction would make its courts and judicial officers available to enforce an American injunction. Thus, incarceration or damages are not likely to be available as contempt penalties.
Nevertheless, monetary penalties could be enforced against assets of the contemnor located in the United States, and those civil contempt penalties could be reduced to judgment in the United States. Then the resulting money judgment could be subjected to recognition and enforcement in other countries that recognize American money judgments, although the moving party likely would be confronted with an argument that such a judgment represents a penal sanction and thus is outside the scope of both treaty-based and comity-based international judgment recognition. [FN72]
*1138 Of course, turning the injunction into a civil money judgment brings the judgment creditor back to the position he would have occupied if he obtained a civil money judgment, rather than an injunction, in the first place. An injunction's utility is as a supplement to judgment execution, as when the person controlling foreign assets is within the jurisdiction of the court.
B. NEW PROPERTY AS SOURCES OF IN REM JURISDICTION
The growing importance of domain names in the Internet can strengthen the power of traditional adjudicatory institutions by giving them a new basis for in rem jurisdiction and with it a new target for judgment execution. A domain name, in some sense, is the property of the person or entity to which it is assigned. It also is present in virtually every jurisdiction around the world that participates in the Internet because domain name servers maintain databases of domain names. If someone in Illinois is victimized by someone acting from Macedonia, the Illinois victim could conceivably sue in an Illinois court based on the presence in Illinois of the Macedonian domain name, and then execute any resulting judgment against that domain name. This would be the exercise of classic in rem jurisdiction.
Other types of new property similarly might be a basis for jurisdiction, although execution against or attachment of all these forms of property confront similar problems. Clearly hardware and computer programs are subject to execution. But what about software (such as a Netscape web browser) as to which the judgment debtor has only a license? What about intellectual property? And what about obligations owing to the judgment creditor, for example to maintain routes to his server? How feasible is garnishment of those transnational obligations?
When a judgment debtor has a license on software, execution could include obtaining rights to any income from the license or possibly transferring the license from the judgment debtor. Garnishment of obligations from persons around the world may not be feasible because the garnishee is not within the physical reach of execution process, and foreign garnishment would be too time consuming. Writs of garnishment against local debtors of the judgment debtor (such as a software licensor), however, would be attractive and entirely practicable. Such a jurisdictional theory and judgment-execution strategy would confront significant challenges, including factual issues relating to the terms of a software license or to the distribution of second and third level domain names throughout the DNS hierarchy to determine if the actor's specific domain name is indeed in Illinois.
These factual and conceptual problems are greater for some forms of new cyberspace property than for others. A software license presents relatively few *1139 problems. It can be localized-thus avoiding the problems in the copperplate cases. [FN73] The software license is present wherever the software is being used and also wherever the software licensor is located. Domain names also can be localized. While the domain name is present in any domain server, it is present only in the places where those servers are, and not everywhere in the same sense that the copperplate copyright was. The next section explains the domain name system. In the system, a domain name server contains tables that equate a domain name, such as iit.edu, to an IP address, such as 188.8.131.52. Once the IP address is known, routers send packets to the domain by referring to routing tables, which associate each IP address with at least a portion of a route to it via other routers. [FN74] A computer connected to the Internet cannot send or receive e-mail, or participate in web sessions, unless its IP address is known to the computer at the other end of the communication, and unless routers in between the two computers know how to route packets to the IP address. One can be excluded from the Internet by removing one's IP address from domain tables and from routers.
Execution and supplementary equitable remedies usually are available only against property as to which the judgment debtor has a present interest. Unless the holder of the domain name has contractual entitlement vis-a-vis everyone who maintains a domain server-and he probably does not-adapting traditional attachment concepts to domain names is troublesome. Even more troublesome is the idea that the route in a router would be subject to attachment. The rights of a domain holder to insist that routers point to his domain are even murkier than his rights to have his domain name appear in domain servers. These matters are worth further thought and doctrinal adaptation.
Another problem is whether the presence of such intangible property represents a constitutional basis for jurisdiction under Shafer v. Heitner because the enforcing court must have personal jurisdiction. The law has only recently found straightforward ways to relax the traditional bar against execution against intangibles, including intellectual property. Garnishment generally is limited to money payable to the judgment debtor. In 1852, the Supreme Court of the United States decided that execution against a copper plate did not bring with the plate the associated copyright. In a later case involving the same underlying controversy, the court explained its reasoning. Copyright is a federally created right that has no locale. Allowing local execution would interfere with the federal right. The ineligibility of copyright for attachment through a writ of execution was but a subset of the general rule that equitable interests could not be executed against. Nevertheless, a bill in equity (creditors bill or supplemental proceedings) was available to *1140 compel transfer of the intangible assets. Intangible assets include seats on the Chicago Mercantile Exchange, oil and gas leasehold interests, hunting and fishing rights, and unsecured and liquidated counterclaims. By analogy, a domain name should be eligible for attachment or execution despite its intangibility. There is a final problem, however: what would the writ of execution command? That the sheriff seize and sell the domain name at auction? That is not likely to produce a result very useful to the victim. What is the alternative? That any DNS server located in Illinois stop resolving the domain name?
It may not be necessary to answer those questions because viewing domain names as property under the concept of in rem jurisdiction is not as useful as a much broader conception that has begun to be visible as a result of a report of the IAHC. That broader role uses domain names and their possible revocation as the centerpiece of a comprehensive international private governance scheme.
C. DOMAIN NAME REGISTRIES: A NEW SOVEREIGNTY?
The Internet itself can be a new sovereign. Recent recommendations by the IAHC for reforming the system of domain name administration portend such a new sovereignty: a self-contained system in which Internet-based entities make rules that are applied by Internet-based adjudicators, and enforced by condemning Internet-based property. IAHC was formed at the initiative of the Internet Society (ISOC) and at the request of the Internet Assigned Numbers Authority (IANA). [FN75] IAHC also was supported by the Internet Activities Board (IAB), the International Telecommunications Union (ITU), the International Trademark Association (INTA), and the World Intellectual Property Organization (WIPO). Beginning work in November 1996, the IAHC sought comments from a wide variety of people and organizations and issued a final report with associated draft legal documents in February 1997. The IAHC report recommended changes in top level domains for the Internet and a complete reorganization of the mechanisms for administering Internet domain names. The constitutional document, the generic Top-Level Domain-Memorandum of Understanding (gTLD-MoU), was signed in Geneva on May 1, 1997, and deposited with the Secretary General of the ITU. With the signing of the gTLD-MoU, the IAHC was dissolved and replaced by the Interim Policy Oversight Committee (IPOC). As of December 15, 1997, 188 entities had signed or indicated their intent to sign the gTLD-MoU, although there is much controversy over the inclusion of some entities on that list. By December 1997, the Policy Oversight Committee (POC) was operating, and comments being solicited on amendments to its composition and procedures. [FN76]
*1141 A DNS is an essential component in the Internet's operation. It permits use of human-friendly addresses for nodes connected to the Internet such as "kentlaw.edu," "law.vill.edu," "cilp.org," "fcc.gov," and "ibm.com." The characters after the period are Top Level Domains (TLD) signifying respectively two educational institutions, a nonprofit organization, a U.S. governmental body, and a commercial enterprise in the examples given. The DNS functions through domain name servers that translate the human-friendly names into IP addresses such as 184.108.40.206 through a series of interconnected domain name tables maintained on DNS servers. Tens of thousands of DNS servers are linked in a kind of hierarchical distributed look-up service. If one DNS server does not know a domain name for which it is asked to supply the IP address, it refers the request to another DNS server with broader knowledge of that part of the Internet domain.
The IAHC was formed because of a growing set of controversies over the DNS as it now exists. The popularity and commercialization of the Internet meant that multiple entities sometimes want to use the same domain name because the same few letters can signify more than one well known company, product, or service, and because some persons have registered domain names for the primary purpose of selling them to enterprises with which they appear to be associated. Many of the controversies relate to trademarks and service marks as when enterprise A uses a domain name that is the same as a trademark registered to enterprise B. At the same time, Internet users outside the United States increasingly are restless with U.S. dominance of the DNS as an outgrowth of the U.S. Defense Department origins of the Internet.
The IAHC recommendations covered both administration of domain name assignments and behavior of the distributed look-up service which maps human- friendly names into IP addresses.
In addition to recommending the definition of seven new top level domains, the IAHC report [FN77] declared that "[t]he Internet top level domain space is a public resource," the administration of which presents public policy issues and should be carried out in an open and public manner "in the interests and service of the public."
*1142 Of particular significance for this article, the IAHC recommended a new governance structure based on several memoranda of understanding (MoUs), which entities in both the public and private sectors would be invited to sign. The generic top level domain memorandum of understanding (gTLD-MoU)-the constitutional document-would become effective as soon as signed by the IANA and ISOC. Stewardship of the gTLD space could be assigned to the gTLD DNS POC comprising members named by the ISOC, IANA, IAB, ITU, International Trademark Association (INTA), WIPO, and The Council of Registrars (CORE).
The CORE established by a Memorandum of Understanding (CORE-MoU) signed by multiple competing registrars that are globally dispersed, operates as a Swiss nonprofit association. A gTLD DNS Policy Advisory Body (PAB) is formed from public and private sector consultation and oversees POC and CORE activities. Amendments to the MoU can be initiated by POC after consultation with PAB and CORE according to section 11(d) of the gTLD-MoU. One could regard the legislative initiative function as residing with POC, subject to revision and possible veto by PAB and CORE.
Two international treaty-based organizations play a role in implementing the IAHC recommendations. The ITU agreed to act as the depository for the gTLD-MoU and to publish the list of signatories. [FN78] WIPO supports a dispute resolution mechanism for challenges of any domain name applicant's right to hold and use a second level domain name under the rules of the Arbitration and Mediation Center of the WIPO (Geneva). WIPO would administer a new system of Administrative Domain Name Challenge Panels (ACPs) "These panels do not substitute for national or regional sovereign courts; they have authority over the domain names only, not the parties. Unlike courts, however, the challenge panels would have the ability to exclude certain names, such as world-wide famous trademarks, from all of the CORE gTLDs." [FN79]
These provisions are reinforced by article 7(b)(I) of the CORE-MoU that provides that registrars must include in their registration agreements and application forms for assignment of secondary level domain names paragraphs that bind the registrars to follow ACP decisions. Also required are paragraphs that bind applicants to submit to WIPO mediation and thereafter to decisions by an ACP and by arbitration-"be referred to and finally determined by on-line arbitration in accordance with the WIPO On-Line Expedited Arbitration Rules." [FN80] The WIPO center must notify CORE of any results and decisions of ACP mediation or arbitration proceedings that require action. [FN81]
*1143 Appendix D of the gTLD-MoU provides substantive guidelines concerning administrative domain name challenge panels. ACPs and the associated mediation and arbitration mechanism have jurisdiction under the gTLD-MoU only over claims that a second level domain name in any of the CORE- gTLDs is identical or closely similar to an alphanumeric string that is deemed to be internationally known and for which demonstrable intellectual property rights exist, and as to which the owner has not given permission for use as a second level domain name.
ACP procedures would allow for two types of exclusion. First, the second- level domain name which was challenged could be excluded (that is, from the particular gTLD in which it was registered without the authorization of the owner of the intellectual property right). Second, a broader exclusion from some or all of the CORE-gTLDs could be applied for, in 'exceptional cases.' Such cases would include at least trademarks which are globally known. [FN82]
Procedurally, any person can file a challenge with an ACP requesting either form of relief or transfer of the requested SLD to the challenger in lieu of exclusion. [FN83] Appendix D provides criteria to be applied by ACPs determining whether the elements of a successful challenge have been established. [FN84]
Draft substantive guidelines for the ACPs were published for comment. The ACP determinations, however, are of limited effect. "A determination of an ACP shall carry no precedential weight in any later national or regional court proceeding." [FN85] Appeals are permitted, although the Appendix D is unclear as to what body has jurisdiction over the appeal-presumably the same or another ACP. [FN86] Clearly, de novo hearing by national or regional courts is contemplated: "Any dispute which has been submitted to an ACP may be brought, at any time before, during orafter the administrative challenge procedure, to a national or regional court, which would hear dispute under its normal jurisdictional and substantive rules." [FN87]
D. WIPO'S ROLE
On May 1, 1997, the Director General of WIPO signed the following statement: "[t]he Director General of the World Intellectual Property Organization (WIPO) hereby declares that the WIPO Arbitration and Mediation Center is available for administering procedures for the settlement of disputes concerning second level domain names registered in the gTLDs covered by the gTLD-MoU." On May *1144 16, 1997, WIPO adopted a memorandum prepared by its international bureau. [FN88] The memorandum noted that ACPs are necessary because if registrars were to implement the domain name challenge policy they would become the equivalent of trademark offices and would probably be bound to follow inconsistent national or regional legal principles.
Under the memorandum, ACPs would consist of one to three experts conversant in the fields of intellectual property and Internet domain names who would hear challenges on-line "wherever possible." [FN89] According to the memorandum, the WIPO Arbitration and Mediation Center is willing to provide on- line mediation, expedited on-line arbitration, and administration of procedures for administrative domain name challenge panels. [FN90] The procedural rules for ACPs "will be based on the existing WIPO Arbitration Rules, and are under preparation by the WIPO Center." [FN91] The WIPO Center will apply existing WIPO mediation rules and WIPO expedited arbitration rules under WIPO publication 446E to on-line mediation and expedited on-line arbitration. [FN92] In requests for comments issued in mid-1998, WIPO presented the following issues regarding the WIPO dispute resolution machinery:
16.7 The relationship between any such dispute resolution approaches and the jurisdiction of relevant national courts.
16.8 Whether the decisions resulting from any such dispute resolution approaches should be based on the applicable law or whether it would be desirable to develop special criteria of an administrative nature to be used as a basis for decision. [FN93]
In the case of ACPs, the substantive norms to be applied are under preparation by the Interim Policy Oversight Committee (IPOC), the successor to the IAHC. These substantive norms are referred to as the 'Substantive Guidelines Concerning Administrative Domain Name Challenge Panels.' They appear as Appendix D of the CORE-MoU, and will be available on the Internet at <http://www.iahc.org>. Adoption and modification of these substantive guidelines are procedures that are separate from WIPO or the WIPO Center. As part of the CORE-MoU, the substantive guidelines may only be adopted and amended by the appropriate procedures involving the self-governing bodies mentioned above, namely the PAB, POC and CORE. [FN94]
The relationship between the ACPs and arbitration is not altogether clear. It appears that the envisioned procedure would cause disputes to be addressed by *1145 ACPs first, followed by litigation in regular courts or, if a registrar had elected arbitration, through WIPO-overseen arbitration.
This semi-autonomous [FN95] legal system provides for internal sources of rules (prescriptive jurisdiction) through the IPOC and POC, for internal adjudication (adjudicative jurisdiction) through arbitration and the ACPs, and enforcement (enforcement jurisdiction) by denial of domain names. The IAHC model, whether or not it is actually implemented as proposed, [FN96] remains as a conceptual model for enforcing rules applicable to Internet conduct.
E. THE VIRTUAL MAGISTRATE AS A MODEL
The May 16, 1997 WIPO Memorandum [FN97] says:
the procedural rules that will be applied by the WIPO Center for online mediation and expedited online arbitration will be the existing WIPO mediation rules and WIPO expedited arbitration rules. The procedural rules for administrative challenge panels (WIPO ACP rules) will be based on the existing WIPO arbitration rules, and are under preparation by the WIPO Center. [FN98]
The existing rules do not explicitly provide for on-line arbitration or mediation although there arguably is room for the use of electronic communications techniques. "Any notice or other communication that may or is required to be given under these Rules shall be in writing and shall be delivered by expedited postal or courier service, or transmitted by telex, telefax or other means of telecommunication that provide a record thereof." [FN99] The mediation rules have no reference to means of communication, and neither do the modifications made to the basic arbitration rules to produce the expedited arbitration rules. [FN100]
The WIPO Arbitration Center is understood to be working on more specific procedures for on-line arbitration and mediation under the IAHC scheme. The Virtual Magistrate (Vmag) system is one possible model. The Vmag system is a specialized, on-line arbitration and fact-finding system for disputes involving users of on-line systems, those who claim to be harmed by wrongful messages, and system operators as to complaints directed at the system operator. It is a project of the Cyberspace Law Institute, the American Arbitration Association *1146 (AAA), the Center for Information Law and Policy, [FN101] and the National Center for Automated Information Research. Under the Vmag rules, complaints are submitted as e-mail messages or by completing a form available through the World Wide Web. That triggers an automated process resulting in the assignment of an arbitrator from a specialized AAA roster, and a seventy-two hour exchange of positions by e-mail implemented through a web discussion group, followed by a decision posted on the web and also sent by e- mail to the participants.
The proceedings are not open to the public until the Vmag reaches a decision, at which time the decision and the filings are made public unless the magistrate orders otherwise. Confidentiality is implemented by password- protected web-pages and discussion groups.
Implemented as a pilot project, the Vmag system has handled one case to the point of decision and received a number of other cases that settled before the Vmag became involved. The basic concepts of the Vmag system, and its implementation through the web, are appropriate models for the on-line mediation and on-line arbitration process of the IAHC machinery. Of course, the subject matter limitation on Vmag jurisdiction would have to be removed, and the administration of the system presumably would be moved to Geneva and handled by WIPO, although aspects of the implementation could be handled elsewhere, for example at Chicago-Kent or Villanova.
The only significant limitation in the technologies used by the Vmag as it exists in mid-1998 is the unavailability of audio and video information exchange features. Graphical images, for example a trademark symbol, easily can be exchanged by e-mail attachment or uploaded file. The Center for Information Law and Policy already has begun work on enhancements to the Vmag software that would permit the exchange of real audio files and, conceptually at least, exchange of video streams.
F. DOMAIN NAME REVOCATION AS SANCTION FOR VIOLATIONS OF INTERNATIONAL NORMS
The dispute resolution machinery proposed by the IAHC is limited to disputes over domain name assignment and focused more particularly on domain name assignment disputes that raise trademark or unfair competition issues. Moreover, it is an optional procedure with a resort to national courts remaining available as another option. As section V.C. explains, agreement on even this limited arrangement has been elusive. No doubt, agreement would be even harder to obtain with respect to a broader dispute resolution procedure and more ambitious use of domain names as leverage to enforce a broader set of international norms.
*1147 Notwithstanding those practical difficulties, however, it is useful to consider the possibility of using Internet domain names as a means of enforcing international norms in general-not just norms against infringement of international trademarks. One of the difficulties in developing international legal systems is the absence of sources of coercion to enforce decisions by international tribunals enforcing international norms of behavior. The problem is still largely theoretical because no genuinely public international civil tribunals for private disputes exist (the International Court of Justice only hears disputes between states), although international arbitration occupies much of this field successfully. Regional tribunals for private disputes, such as the European Court of Justice, which has jurisdiction over claims by private parties who challenge decisions of European institutions, and the European Court of Human Rights, which has jurisdiction to hear private claims alleging human rights violations by European institutions, both require subsequent enforcement action before national courts.
The availability of adjudication machinery is greater in the criminal law area, with the establishment of the specialized tribunals to hear war crimes cases arising in the former Yugoslavia and in Rwanda. The Yugoslav tribunal particularly has encountered nearly insuperable problems in the enforcement of its process. The sovereign or quasi-sovereign entities in whose territory the major indicted war criminals are found have refused to produce them for the tribunal. As a more complete international machinery is developed for rulemaking and adjudication, the need for adequate enforcement measures will increase. I have argued elsewhere that the Internet itself is making it easier to establish international rulemaking and adjudication institutions, and the pressures of all kinds of transnational commerce and the evolution of human rights law are increasing the demand for such internationalization of legal and political systems. [FN102] In many instances, the decisions of international adjudicatory bodies can be enforced successfully in national courts. [FN103]
But there also will be many instances in which national-court enforcement will be ineffective. This will occur for at least two reasons. First, because the actor acts through the Internet and thus avoids meaningful jurisdiction, execution, or remedies from national courts, [FN104] and second, because some nation states decline to enforce international decisions. In both of these (potentially overlapping) instances, enforcing an international adjudicatory decision against Internet domain names can be an effective supplement to the effectiveness of the international legal regime.
The basic concept is that the domain name of a malefactor would be revoked as a remedy under an adjudicatory decision by an international body. As section *1148 V. explains, the domain name revocation remedy is incomplete in that it does not compensate the victim for injury. It does, however, have deterrent value and prevention value.
An intellectually complete system for using domain name revocation as a remedy for enforcing international adjudicatory decisions would have at least three elements: rules for prescriptive jurisdiction, rules for adjudicatory jurisdiction, and rules for assuring compliance with the analogue of the writ of execution-the final order requiring that a domain name be revoked. The rules for prescriptive and adjudicatory jurisdiction have already been worked out. They are the ones summarized in section II. as recognized in customary international law and expressed in the Restatement (Third) of Foreign Relations Law of the United States. Such rules are necessary to determine which substantive norms and which adjudicatory decisions would be entitled to enforcement through the DNS. When the substantive norms and the adjudicatory decisions emanate from international institutions, their jurisdiction would be determined according to the documentary sources of their power-treaties for the foreseeable future.
That leaves the need to assure that the "sheriff" in this new legal domain obeys the "writ of execution." The obligation to obey the writ of execution would be expressed much as the obligation to obey decisions of ACPs and IAHC arbitration is expressed in the existing MoU. Once a decision to revoke a domain name is reached by the designated body, any registrar in the system is obligated to revoke the domain name. A registrar declining to fulfill that obligation would lose its status as registrar. Obviously, the integrity of this means of execution depends upon the continued willingness of everyone up and down the hierarchical chain of registrars to live up to their contractual commitments. As the scope of rules and decisions to be enforced by this means increases, presumably the degree of compliance by registrars who intend to comply will diminish.
The execution decision itself could be reached either by specialized tribunals within the domain name registration system, or by the adjudicatory body hearing the merits of the case, in which case domain name revocation simply would be an additional remedy.
VI. RELATIONSHIP WITH NATIONAL COURTS: LIMITATIONS OF THE NEW SOVEREIGNTY
The principal limitation on the system of dispute resolution envisioned by the IAHC documents is the absence of exclusive jurisdiction in the new dispute resolution bodies and the absence of preclusive effect for their decisions. No doubt, some of this limitation arises from political difficulties, and the unwillingness of negotiators of the IAHC mechanisms to agree to stronger power in the dispute resolution bodies. Legal analysis cannot substitute for political will. It is, however, useful to understand the alternatives for allocating power between IAHC dispute resolution bodies and national courts. (As section V.F. explains, *1149 there are few international bodies that need to be considered at present other than international arbitration).
The basic problem is that an IAHC dispute resolution body can make whatever decision it wants, and no one having coercive power will enforce it. It is like the injunction issued by the Missouri judge that cannot be enforced by a sheriff in Pennsylvania or Barbados. The problem for IAHC dispute decision, however, is worse. There are sources of national and international law that provide for recognition of a Missouri judicial decision, as explained in section VI.B. There are no comparable sources of law applicable to IAHC dispute resolution tribunals except for those that qualify as arbitration under the New York Convention. Neither cyberspace in general nor the Internet in particular comes close to qualifying as a sovereign in international law, because it has no territory that it controls and no population that it can be said to control. Even if one assumes sufficient modification in traditional concepts of sovereignty to allow cyberspace governance bodies to be recognized as sovereign, additional elements of jurisdiction to prescribe and adjudicate would have to be satisfied before cyberspace dispute resolution bodies decisions would be recognized in national courts.
A. ELECTION OF REMEDIES AND WAIVER AS SOURCES OF JURISDICTION
Some mechanisms, however, can give teeth to IAHC dispute resolution bodies. They all are essentially contractual. Those who ultimately may be bound by decisions of these bodies may explicitly agree through their subscription agreements or other contractual documents, such as applications to be registrars, to be bound by decisions of the IAHC bodies. This explicit agreement is exactly what the gTLD-MoU and the CORE-MoU provide. This form of predispute granting of jurisdiction is a concept well known in the law of arbitration. Second, disputants may agree after a dispute has arisen to submit it to the new dispute resolution bodies rather than to the regular courts. Often called election of remedies, this type of consensual grant of power is a matter of contract and is well known as post dispute arbitration. Whether the disputants intend to elect arbitration or other forms of nonjudicial dispute resolution to the exclusion of judicial bodies is a matter of contract interpretation, which in turn is a matter of inferring disputant intent.
Just as any kind of contract can arise by conduct other than verbal conduct, so can both forms of agreement to be bound by new forms of dispute resolution arise from conduct. In theory, at least, a party with sufficient notice may agree to be bound by the decisions of an ACP or IAHC arbitration simply by participating in certain on-line services. For example, under well recognized contract doctrine, there is no reason that one is not bound to arbitrate when he accesses information from a webpage after seeing a prominent notice on the webpage saying: "anyone who accesses this web page is, by that access, agreeing to be bound by decisions of the x panel under gTLD-MoU as to any dispute arising out of the use of this service." Section seven of the CORE-MoU obligates registrars to *1150 participate in the IAHC dispute resolution process. Submission to ACP proceedings and to mediation is compulsory. Submission to arbitration is voluntary, but not on a case-by-case basis.
Preclusion and recognition are two closely related concepts that together determine the legal effect of decisions by IAHC dispute resolution bodies. Recognition refers to the willingness of a legal decisionmaker to give legal effect to a decision reached earlier by some other legal decisionmaker. Typically, the term is used to refer to the willingness of a court to give effect to a judgment issued earlier by another court. Preclusion refers to a strong form of recognition that obligates the second court to apply the decision of the earlier court. Instead of reaching its own decision on the merits of the dispute, it simply accepts the decision on the merits by the earlier court. To say that a judicial decision has preclusive effect necessarily means that it is entitled to recognition. It is possible for a decision to be recognized, but not to have preclusive effect. This would occur, for example, if the preclusion rules of the jurisdiction issuing the first decision do not provide for preclusive effect. The second jurisdiction recognizing the first decision would also recognize the preclusion rules of the first jurisdiction and thus not give preclusive effect to the first decision.
When one seeks to enforce a foreign [FN105] judgment, the first step conceptually is to obtain recognition of the judgment by a court that has means of physical coercion such as a sheriff or marshal. When the foreign judgment is from another American state, the Full Faith and Credit Clause of the United States Constitution obligates the enforcing state to recognize it. When the foreign judgment is from another country, either state statutory law, the Uniform Recognition of Foreign Judgments Act (in about half the states), [FN106] or the common-law doctrine of comity [FN107] prescribe the criteria for recognition. Basically, they require recognition unless the party opposing recognition can show violations of procedural due process, lack of personal jurisdiction by the rendering court, [FN108] or in rare instances, violations of public policy in the recognition state. [FN109]
Regardless of the path to recognition, the effect and scope of a judgment *1151 afforded recognition is determined by concepts of preclusion under the preclusion law of the rendering state. Thus, discrete decisions on fact or law issues may have collateral estoppel effect, depending on the rules of issue preclusion of the rendering state. Transactionally-related claims that might have been brought in the foreign lawsuit may be foreclosed by res judicata, depending on the claim preclusion rules of the rendering state. [FN110] If the foreign judgment is recognized, then it must be enforced as a procedural matter. This occurs either under a state statute like the Uniform Enforcement of Foreign Judgments Act, [FN111] or by bringing a new lawsuit in the state of enforcement on the debt represented by the recognized foreign judgment. [FN112] The Uniform Enforcement Act allows the judgment creditor simply to file the foreign judgment with the clerk and obtain a writ of execution. The new lawsuit approach results in a new judgment that supports a writ of execution. The Brussels Convention, binding members of the European Union, provides for summary enforcement of covered foreign judgments under procedures similar to those of the Uniform Enforcement Act. [FN113] Recognition and enforcement are not two separate proceedings. Rather, recognition is a substantive decision within the enforcement proceeding. [FN114]
As noted, section eight of the gTLD-MoU establishes concurrent jurisdiction among the ACPs and national or regional courts. Not only that, the same section disavows any preclusive effect for ACP decisions in concurrent or subsequent judicial proceedings. Further, ACP determinations shall have no "precedential weight." [FN115] That proviso does not make it altogether clear whether the ACP determination could be introduced into evidence or not. Presumably, that would be a question of law for the state in which parallel judicial proceedings occur. [FN116] The language of the gTLD-MoU does not deprive an ACP decision of recognition in national courts; it simply excludes preclusive effect. The ACP decision still might be entitled to "great weight," in a national court proceeding. [FN117]
*1152 Arbitration decisions resulting from domain name challenges may lead to stronger results, however. Under both domestic U.S. law and under international treaty law, arbitration awards are entitled to recognition in national courts and have essentially the same status as judgments when they fall within the scope of the arbitration recognition rules.
Under U.S. common law, "a valid and final award by arbitration has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court." [FN118] Two U.S. statutes, one federal [FN119] and one model state act, [FN120] require regular courts to recognize arbitration awards unless the award is outside the powers conferred by the agreement to arbitrate, or has been procured by fraud. [FN121]
Under international law the general rule is that foreign arbitration awards must be recognized. [FN122] Moreover, the legal status of an arbitration award is greater than the legal status of a court decision in another country because of the existence of an international agreement providing for the enforcement of international arbitration awards [FN123] compared with the absence of a similar convention on the recognition and enforcement of judicial decisions. In addition, an international arbitrator or arbitration panel has greater flexibility to choose substantive law that fits the dispute, not being bound by national choice of law rules, and probably not being limited to national sources of law.
The particular set of rules that apply to an international arbitration is determined by the written agreement to arbitrate. [FN124] Some of these rules, like those of the AAA, are issued by a body that performs administrative services in connection with the arbitration. Others, like those issued by the United Nations Commission on International Trade Law (UNCITRAL), [FN125] allow the parties to select the body to provide administrative services. [FN126]
*1153 Under the New York Convention, arbitration awards are entitled to recognition in their own right as long as they fall within the scope of the convention. Under the Restatement, however, the effect of an arbitration award depends on the effect of a judgment, and it is therefore useful to understand the framework for recognition of foreign judgments in international affairs. That framework is incomplete, and depends on the doctrine of comity: state law when recognition is sought in the United States, and European Union law when recognition is sought within Europe.
These basic international law principles are expressed in the Restatement (Second) of Judgments provisions dealing with the enforcement of foreign judgments, [FN127] which summarize the doctrine of comity. [FN128] A (1) valid judgment rendered in a foreign nation (2) after a fair trial in a contested proceeding will be recognized in the United States (3) so far as the immediate parties and the underlying cause of action are concerned. [FN129] When the conditions are met, the effect to be accorded foreign judgments is the same as that required under the Full Faith and Credit Clause. [FN130] Qualifying foreign judgments may be enforced. [FN131] Equitable decrees from foreign courts also generally are enforceable in the United States as long as they meet the basic requirements set forth in section ninety-eight. [FN132]
Overlaid on the comity doctrine are positive law enactments, such as the Uniform Recognition of Foreign Money Judgments Act, adopted in about half the states. This legislation provides a framework for U.S. recognition of judgments from foreign countries, performing essentially the same function- though under slightly different criteria-that the Full Faith and Credit Clause of the United States Constitution performs with respect to judgments from sister states. [FN133] Within the European Community, the Brussels and Lugano conventions [FN134] rationalize recognition of judgments among members of the European Union and the European Free Trade Area. There is no truly international civil judgment enforcement convention to which the United States is a party.
*1154 The Uniform Recognition Act applies to "any foreign judgment that is final and conclusive [FN135] and enforceable where rendered even though an appeal therefrom is pending or it is subject to appeal." [FN136] Foreign judgment is defined as "any judgment of a foreign state granting or denying recovery of a sum of money, other than a judgment for taxes, a fine or other penalty, or a judgment for support in matrimonial or family matters." [FN137] Foreign state is defined as any governmental unit other than the federal government, a state, or a U.S. possession. [FN138] The heart of the act grants full faith and credit status to a foreign judgment "to the extent that it grants or denies recovery of a sum of money," [FN139] subject to certain exceptions. Three of the exceptions deprive the judgment of its status as a judgment if:
(1) The judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law;
(2) The foreign court did not have personal jurisdiction over the defendant;
(3) The foreign court did not have jurisdiction over the subject matter. [FN140]
The remaining exceptions support discretionary nonrecognition:
(1) The defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient time to enable him to defend;
(2) The judgment was obtained by fraud;
(3) The cause of action or a claim for relief on which the judgment is based is repugnant to the public policy of this state;
(4) The judgment conflicts with another final and conclusive judgment;
(5) The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in that court;
(6) In the case of jurisdiction based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action. [FN141]
Ground (5) permits nonrecognition of a judgment resulting from litigation evading an agreement to arbitrate. With the exception of that ground, the bases for nonrecognition under the Uniform Act are essentially the same as the bases for nonrecognition under the doctrine of comity. [FN142]
One of the most complete frameworks for international enforcement of private law rights is provided under the Hague Convention on the Civil Aspects of International Child Abduction. This treaty became effective among the *1155 United States, Australia, Canada, France, Hungary, Luxembourg, Portugal, Spain, Switzerland, and the United Kingdom on July 1, 1988, and has become effective with some sixteen other countries since then. [FN143] The convention makes removal or retention of a child "wrongful" when it is in breach of rights of custody "under the law of the state in which the child was habitually resident immediately before the removal or retention ..." [FN144] This obligates signatories to recognize judgments and orders of other signatories. Procedurally, a person seeking the return of a child files an application with the central authority of either the state of residence or of any other contracting state for assistance in securing the return of the child. [FN145] The central authority receiving such an application is obligated to take "all appropriate measures," [FN146] and judicial and administrative authorities of contracting states must act to cause the return of a child and "shall also order the return of the child" within one year. [FN147] Certain exceptions are provided. [FN148]
In ascertaining whether there has been a wrongful removal of [sic] retention within the meaning of Article 3, the judicial or administrative authorities of the requested State may take notice directly of the law, and of judicial or administrative decisions, formally recognized or not in the State of the habitual residence of the child, without recourse to the specific procedures for the proof of that law or for the recognition of foreign decisions which would otherwise be applicable. [FN149]
Similar treaty language could be used to obligate national courts to recognize domain name challenge procedure decisions, either of the administrative challenge panels contemplated by the IAHC, or of arbitration panels under the IAHC following ACP determinations.
One of the problems of exercising governmental authority is that not everyone is happy with the result. Often, litigation results against the entity exercising governmental power. When that occurs, liability in the form of damages or a judicial order mandating a different decision often is avoided only because the defendant enjoys immunity. Traditional sovereign governments enjoy sovereign immunity. There is little likelihood that elements of the IAHC machinery would be characterized as sovereigns in that respect. [FN150]
*1156 More plausible in the private governance context are two other forms of immunity or privilege. [FN151] First and most important is antitrust immunity. Any cooperative effort, such as that envisioned by the IAHC, limits competition among the participants. But not all limits on competition are illegal under American or other sources of competition law. Some limits on competition are necessary in order to promote more effective competition at other levels. The Supreme Court of the United States has recognized this possibility in a series of cases including NCAA and CBS. [FN152] Moreover, the Supreme Court has recognized the validity of regulatory activities by associations of competitors. In general, rulemaking activities are allowed as long as anyone in the industry may participate and basic principles of due process are followed. [FN153]
Most troublesome in this case law, however, is the idea that enforcement measures are not allowed. In other words, a private association may adopt regulatory standards and be immune from antitrust liability, but as soon as it tries to enforce those standards, it exceeds the immunity and confronts potential liability. Obviously, such a limitation would defeat the effectiveness of the IAHC regime, especially if it extends its reach beyond disputes over domain name conflicts and trademarks.
A variety of antitrust cases have arisen challenging the application and enforcement of rules of associations of competitors. In general, the federal courts have the power under the antitrust laws "to void 'any significantly restrictive rule of a combination or trade association with significant market power, that lacks competitive justification or whose reach clearly exceeds the combination's legitimate needs."' [FN154]
Scrutiny of private associations of competitors is strengthened when members waive rights to seek judicial relief. That heightened scrutiny can be lessened by transferring antitrust disputes not to a board of directors of a producer's association, but to an arbitrator. [FN155]
Health care peer review is a particularly pertinent area of antitrust analysis of self governance. After the Supreme Court denied state-action immunity to *1157 physician peer review decisions, the Congress enacted the Federal Health Care Quality Improvement Act, [FN156] which immunizes from antitrust liability peer review actions meeting certain criteria: being based on a reasonable belief that the action furthered quality health care, appropriate fact gathering, notice and hearing, and reasonable belief resulting from the fact gathering and hearing that the action taken was warranted. The health care peer review act requires the opportunity for a hearing either before an arbitrator or before a hearing officer or panel not in direct competition with the involved physician. [FN157] The federal act permits states to opt in or opt out. [FN158]
Even without the statutory immunity, "[a]lthough revocation of doctor's privileges may, perforce, eliminate competition by decreasing the number of doctors in a given specialty, this alone will not give rise to an antitrust violation." [FN159] An essential element of a Sherman Act section one violation is proof of an unlawful objective, and " c orrective action against a physician does not violate the antitrust laws if the physician's peer reviewers had legitimate medical reasons to believe that the physician provided substandard care." [FN160] That is so because monitoring the competence of physicians through peer review is clearly in the public interest. Actual support for the peer review decision enters into the analysis because if "the peer group's conclusions are so baseless that no reasonable medical practitioner could have reached those conclusions after reviewing the same set of facts," a fact finder may infer the existence of an illegitimate motive. [FN161]
One commentator noted that the likelihood of a successful antitrust claim based on a peer review decision is extremely small. [FN162] She suggests three measures to reduce antitrust risk: ensuring that no competitor of the physician under review dominates the peer review proceeding especially if the competitor has significant market power; ensuring that partners of the same medical group do not act both as complaining witnesses and hearing panel members; and ensuring that no physicians have a personal bias or independent personal stake in the outcome of investigative committees or hearing panels, at least without investigating the nature of their potential bias. [FN163] Further, she suggests that fair hearing procedures, utilization of peer review in a consistent and nondiscriminatory manner, and ensuring that the decision is narrowly focused on professional confidence or conduct will minimize antitrust exposure. [FN164]
*1158 Another respected antitrust commentator agreed, arguing that special statutory immunities are not needed. [FN165] He notes that antitrust scrutiny of competitive collaboration to impose and enforce rules should focus on whether any restraints on competition are: "(1) ancillary to-that is, truly necessary for legitimate purposes ... and (2) crafted to minimize the risk of anticompetitive effects." [FN166] On the other hand, restrictions on competition cannot be defended successfully by mere claims that they are "inspired by pure or public-spirited motives;" instead, the actions must be justified as not incompatible with maintenance of effective competition. [FN167] He admits, however, that "coercive boycotts" of unapproved providers "are almost certainly unlawful regardless of their arguably worthy purpose," and that antitrust immunity depends on the peer review organization simply making a report to others like public licensing authorities, hospitals, insurers, referring physicians, and patients themselves who decide for themselves whether to act on the advice provided by the peer reviewers. [FN168] He suggests that explicit agreements to adhere to ethical or practice standards are problematic. [FN169] He acknowledges that fee review poses greater problems than review of utilization under published, profession- approved practice standards, but does not endorse anything more than advisory standards. [FN170]
The caselaw and commentary on physician peer review is directly applicable to "peer review" by competitors in the NII. The public policy in favor of self-regulation of the NII is no stronger than the public policy in favor of self-regulation in the medical profession. Market structures are similar, and the utility of due process in deflecting claims of anticompetitive motivations is the same in both industries.
The basic concepts of Radiant Burner [FN171] are the place to start in formulating a more extensive competition law immunity. First, proof of an anticompetitive purpose not legitimated by some plausible standardization need would defeat the immunity. This is akin to a substantive due process or decisional rationality requirement, where only those decisions that can be related to a legitimate private government objective are within the revised immunity.
Second, due process must accompany both rulemaking and adjudicatory and enforcement decisions. This comes directly from Radiant Burner, [FN172] and is sufficiently flexible under the extensive case law developed for private due process *1159 in employment and private associational contexts, and vindicates the basic principle of procedural due process and process transparency. [FN173]
As the private Internet governance mechanisms mature, it would reduce uncertainty if traditional sovereigns enter into an international agreement that would define this competition-law immunity and obligate them to apply it in enforcing their national competition law. Such an international agreement should be self executing so that legislative implementation by state parliaments is not necessary.
Also important is the availability of a tort privilege or immunity so that accusations and findings of fact can be communicated without giving rise to liability for defamation. The present formulation of privilege in the Restatement (Second) of Torts [FN174] appears to be broad enough to afford the requisite tort privilege. Because common law is uncertain, however, and because the Restatement only purports to synthesize American common law, it would be desirable ultimately to express the tort privilege in an international agreement that articulates the competition-law immunity.
There also are potential problems with contractual liability when entities covered by the IAHC machinery implement decisions to exclude malefactors. When Cyber Promotion sued America Online, implied contract theories were asserted with greater effect than tort or other legal theories. [FN175] But this source of liability should take care of itself. The IAHC machinery cannot be implemented without standardizing contracts of service through the full range of Internet Service Providers. Such standardized contracts should not only present the arbitration alternative for domain name disputes, but also waive any liability for breach of contract for the enforcement of decisions reached through arbitration or the ACP process.
A conference in Washington on October 8, 1997, defined the criteria that should guide state acquiescence expressed through antitrust and tort immunities. The report of that conference is reproduced in Appendix A. Although the IAHC system is a remarkably complete legal system, it is not complete in the same *1160 sense that a traditional sovereign's legal system is complete. Cyberspace is not sovereign. The positivist theory of international law forces the conclusion that the contractual and corporate institutions making up the IAHC legal system do not have sovereign powers. Ultimately, they depend either on traditional sovereign institutions to enforce their decisions, or they depend on some degree of immunity to enforce their own decisions. That means, as section VII explains, that traditional sovereigns must give the new cyberspace sovereignty some breathing room by offering antitrust and tort immunities.
But the restricted scope of the new sovereignty presents a large problem. Members of the cyberspace community-domain registrars under the original documents developed by IAHC-are bound by decisions of the IAHC because they have consented to be bound. They must comply with arbitration awards, and traditional courts enforce those awards against them because they have consented to arbitration by contract. This is not true of third parties or "strangers." Someone who has no contractual relationship with the new system of cyberspace governance has no obligation to honor decisions of the new governance institutions. This might be the little old lady in Virginia who is defrauded by the operator of an Internet web server. It might be the owner of a copyright infringed by someone trafficking in it over the Internet. It might be a child whose image is circulated through the Internet as pornography.
There are two possibilities with respect to regulating the legal rights of these third parties. One possibility is simply to concede that those rights must be handled outside the context of cyberspace. That approach leaves them vulnerable to all of the limitations of transnational dispute resolution in cyberspace that prompted this article and this symposium in the first place. The other approach is to try to stretch the new cyberspace jurisdiction to extend to these rights. That stretching can be done by adding a criterion for adjustment of third party claims to the criteria for antitrust and tort immunity. The tribunals of cyberspace must be opened to third party claims, and the cyberspace institutions must be willing to apply the same enforcement measures to a successful third party claim as they would to a claim by a "member" of the cyberspace governance system. This is not much different than insisting that the tribunals of the defendant's state be opened to foreign claimants, while not divesting the foreign claimants of an entitlement to go to their own courts. While third parties cannot be forced to present their claims to the cyberspace tribunals, those tribunals can be made available to them. In many cases the cyberspace tribunals will be superior, as a practical matter, to traditional tribunals.
VIII. Bonds and Funds to Secure Victims' Rights
In many international (and domestic) contexts, anticipated problems with judgment-proof or fugitive debtors is mitigated by requiring a trading partner to post security for performance of obligations. The security may take the form of a *1161 performance bond or a standby letter of credit. More sophisticated institutional alternatives exist, such as workers compensation pools, and uninsured motorist coverage.
No need would exist for formal extraterritorial judgment enforcement, new targets for in rem enforcement of judgments, or new private systems of civil dispute resolution, such as that generalized from the IAHC report, if some system could be devised for likely wrongdoers on the Internet to post a bond, assuring compensation of victims of their misconduct.
Designing and erecting such a system is extremely difficult, however, because of the Internet's defining characteristic-its low barriers to entry. The class of potential wrongdoers on the Internet numbers in the tens of thousands. Now, all that is necessary to set up an activity with the potential to effectuate a consumer fraud, hate speech, defamation, or offshore gambling, is a $3,000 computer, free web server software from Apache, a telephone line, an account with an ISP, and enough money to leave the telephone connection to the ISP open all the time.
It is far from clear how a bond requirement could be implemented in such an informal structure. Who would collect it-ISPs? What sanctions would be imposed on them for not collecting it? Who would hold the security? Who would define adequacy of security and according to what standards? The difficulties in implementing the universal service fund under the Telecommunications Act of 1996 are a preview of some of the political and legal problems likely to be encountered.
It surely would be possible in theory to impose a tax on all users of the Internet, assuring by treaty that all nation states would collect it. But negotiation of such a treaty would be cumbersome, and it would fly in the face of emerging governmental opposition to taxing the Internet. It might be easier to develop new mechanisms for international enforcement of civil judgments and for harmonization of basic norms of conduct on the Internet than to develop the mechanisms for deciding claims to an Internet security fund.
The "jurisdictional" problem in cyberspace is not so much a problem with the theory of jurisdiction as it is a problem with the practicality of enforcement. The existence of new kinds of property in the Internet-one might say "virtual property"-enlarges the opportunities for enforcement of adjudicatory decisions by both traditional courts and new kinds of tribunals. Injunctive relief can compel natural persons to take action with respect to both traditional and new forms of property located elsewhere. The traditional judgment execution process supplemented by garnishment can act directly on property located within the jurisdiction of the victim of Internet misconduct. All these possibilities, however, rely on lawsuits in regular courts. The most interesting possibility for making enforcement of decisions against Internet bandits more effective is to use new mechanisms *1162 for private governance enabled by the Internet and proposed in remarkably comprehensive form by the IAHC.
The IAHC recommendations are focused narrowly on Internet domain names and disputes arising out of conflicts between domain names and trademarks. Nevertheless, domain names are the most significant form of new property in the Internet, and the IAHC mechanisms are well-suited to become more general institutions of rulemaking, adjudication, and enforcement, thereby providing a comprehensive private rule of law for the Internet including enforcement measures targeted at domain names. The domain name registry system proposed by the IAHC provides the outline of a private international government framework for the Internet. This framework can supplement traditional state sovereign institutions that are weakened by the global character of the Internet. It can be used to enforce a variety of international norms under appropriately adapted rules for prescriptive and ajudicatory jurisdiction. The private governance institutions also can be made fair and made to observe due process by application of now well-recognized rules for antitrust scrutiny of standards organizations.
[FNa1]. Henry H. Perritt, Jr. is Dean and Professor of Law for Chicago-Kent College of Law at the Illinois Institute of Technology. He is a member of the bar in Virginia, Pennsylvania, the District of Columbia, Maryland, Illinois, and the United States Supreme Court. The ideas expressed in this article result in part from several years of discussion regarding Internet governance with David R. Johnson, Esq. and Stuart P. Ingis, Esq. Mr. Ingis, Randolph R. Clarke, and April M. Major, Esq. helped the author organize the October 7, 1997 conference, the results of which are presented in Appendix A.
[FN1]. Eli Noam, An Unfettered Internet? Keep Dreaming, N.Y. TIMES, July 11, 1997, at A27.
[FN2]. Henry H. Perritt, Jr., Internet Will Become Its Own Watchdog, N.Y. TIMES, July 16, 1997, at A18.
[FN3]. The Business Law Section of the American Bar Association (ABA) has commissioned an "Internet Jurisdiction Project," housed at Chicago-Kent College of Law at the Illinois Institute of Technology. The project is cosponsored by the International Law and Practice Section and Science and Technology Section of the ABA, and is led by Chicago-Kent professor Margaret Stewart.
[FN4]. The Internet is not the first phenomenon that has presented transnational jurisdictional issues. Maritime trade, civil aviation, and (to a lesser extent because of its limited geographic reach) television all raise the possibility of conduct in one sovereignty having injurious effects in another. Of these, maritime trade is the most interesting because of the development of the idea of in rem jurisdiction over vessels, thus mitigating problems of personal jurisdiction over vessel owners. See generally George K. Walker, The Personification of the Vessel in United States Civil In Rem Actions and the International Law Context, 15 TUL. MAR. L.J. 177, 187 (1991) (analysis of in rem jurisdiction when personal jurisdiction not present in United States and internationally).
[FN5]. 326 U.S. 310 (1945).
[FN6]. See Fed. R. Civ. P. 69(a) (incorporating state judgment execution procedure); Ill. R. Civ. P. 5/12-101 to 5/12-183 (enforcing judgments); Iowa R. Civ. P. 241-60 (same); Kan. R. Civ. P. 60-2401 to 60-2419 (executions and order of sale).
[FN7]. See generally HENRY H. PERRITT, JR., LAW AND THE INFORMATION SUPERHIGHWAY 501-67 (1996) (analyzing connections among jurisdiction, judgment enforcement and venue).
[FN8]. In other words, to make it cheaper and easier for the little old lady in Richmond to enforce her Virginia default judgment in France.
[FN9]. International Ad Hoc Committee (last updated May 25, 1997) <http:// www.iahc.org.>. In the summer of 1998, the U.S. government proposed allowing a private, nonprofit corporation to take over responsibility for domain name administration, thus embracing the central idea of IAHC. United States Department of Commerce, Management of Internet Names and Addresses (visited Oct. 19, 1998) <http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm>. By late 1998, the IAHC structure had evolved into the Internet Corporation for Assigned Names and Numbers (ICANN). See Internet Assigned Numbers Authority (visited Oct. 19, 1998) <http://www.iana.org>.
[FN10]. THE RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 401 (1987) distinguishes among jurisdiction to prescribe, jurisdiction to adjudicate, and jurisdiction to enforce. Id. Jurisdiction to prescribe limits the rulemaking or legislative power. Jurisdiction to adjudicate limits the judicial power. Id. Jurisdiction to enforce limits the executive power to use coercive means such as judicial sale or incarceration to enforce legal decisions. Id.
[FN11]. I have explored other aspects of this relationship in Henry H. Perritt, Jr., Jurisdiction in Cyberspace, 41 VILL. L. REV. 1 (1996) (evaluation of traditional bases of personal jurisdiction over Internet- based conduct giving rise to civil and criminal proceedings); Henry H. Perritt, Jr., Cyberspace and State Sovereignty, 3 J. INT'L LEGAL STUD. 155 (1997); Henry H. Perritt, Jr., Internet as a Threat to Sovereignty? Thoughts on the Internet's Role in Strengthening National and Global Convergence, 5 IND. J. GLOBAL LEGAL STUD. 423 (1998); Henry H. Perritt, Jr., Cyberspace Self- Government: Town-Hall Democracy or Rediscovered Royalism?, 12 BERKELEY TECH. L.J. 413 (1997).
[FN12]. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 401 (1986).
[FN13]. Id. § § 402-403 (bases and limitations of jurisdiction to prescribe).
[FN14]. Id. § 431 (bases of jurisdiction to enforce).
[FN15]. Jurisdiction based on the nationality of the actor is called active personality. Jurisdiction based on the nationality of the victim is called "passive personality." Id. § 402 cmt. g.
[FN16]. See Viktor Mayer-Schonberger & Teree E. Foster, More Speech, Less Noise: Amplifying Content-Based Speech Regulation Through Binding International Law, 18 B.C. INT'L & COMP. L. REV. 59 (1995); Henry H. Perritt, Jr., Jurisdiction in Cyberspace: The Role of Intermediaries, in BORDERS IN CYBERSPACE: INFORMATION POLICY AND THE GLOBAL INFORMATION INFRASTRUCTURE 164 (Brian Kahin & Charles Nesson, eds. 1997); RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 403 (1987).
[FN17]. See RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES, ch. 2 Introductory Note (1987) (jurisdiction to prescribe).
[FN18]. See Pennoyer v. Neff, 95 U.S. 714 (1977); RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES § 402 reporter's note 2 (1987) (referring to International Shoe).
[FN19]. See RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES § 421 (1987) (bases of jurisdiction to adjudicate).
[FN20]. JOSEPH STORY, COMMENTARIES ON THE CONFLICT OF LAWS, § § 532-38, at 900-05 (4th ed. 1852) (personal jurisdiction in Roman law was limited to domicile of defendant except for in rem actions which could be brought where personal or real property was situated; civil law also allowed the place where the contract was made or was to be fulfilled if defendant or his property could be found there, even though it was not the place of his domicile). "Considered in an international point of view, jurisdiction, to be rightfully exercised, must be founded either upon the person being within the territory, or upon the thing being within the territory; for, otherwise, there can be no sovereignty exerted upon the known maxim." Id. § 539, at 905. Story noted questions about quasi in rem jurisdiction. Proceeding against nonresidents by attaching property found within the jurisdiction is not personally binding on the party as a judgment in personam; it only binds the property seized or attached, "and is in no just sense a decree or judgment, binding upon him beyond that property. In other countries, it is uniformly so treated, and is justly considered as having no extraterritorial force or obligation." Id. § 549, at 921-22. 28 U.S.C. § 1655 (federal in rem jurisdiction); Colo. R. Civ. P. 4 (personal jurisdiction); Colo. R. Civ. P. 4(f)(3) (in rem jurisdiction); Iowa R. Civ. P. 56.1 (personal service).
[FN21]. In rem jurisdiction is aptly described by the international law principle for jurisdiction to adjudicate: "(k) [jurisdiction to adjudicate exists if] the thing that is the subject of adjudication is owned, possessed, or used in the state, but only in respect of a claim reasonably connected with that thing." See RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 421 (1987).
[FN22]. See 495 U.S. 604 (1990).
[FN23]. There is some doubt about the effect of the Burnham case because the rationale stated in the text was embraced by only four justices. Id.
[FN24]. See 326 U.S. 310 (1945).
[FN25]. See Asahi v. Superior Court, 480 U.S. 102, 111-12 (1987) (explaining interaction of minimum contacts and fair play as substantial justice). The best way to combine two considerations is to realize that when minimum contacts analysis results in a close question, fair play and substantial justice factors should play greater weight. The fair-play-and- substantial-justice part of the inquiry is sometimes called the "Gestalt" inquiry. It considers five factors:
1. burden on the defendant;
2. forum state's interest in adjudicating the dispute;
3. the plaintiff's interest in obtaining most efficient resolution of the controversy;
4. the interstate judicial system's interest in most efficient resolution; and
5. the shared interest of the several states in furthering fundamental substantive social policies.
See Burger King v. Rudzewicz, 471 U.S. 462, 477 (1985) (identifying factors).
[FN26]. See International Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
[FN27]. Shaffer v. Heitner, 433 U.S. 186, 204 (1977).
[FN28]. Madara v. Hall, 916 F.2d 1510, 1517 (11th Cir. 1990) (quoting, 471 U.S. 462, 476 (1985)). These other factors include:
the burden on the defendant in defending the lawsuit, 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 obtaining the most efficient resolution of controversies and the shared interest of the states in furthering fundamentalsubstantive social policies.
Madara, 916 F.2d at 1517.
[FN29]. See generally Friedrich Juenger, Federalism: Judicial Jurisdiction in the United States and in the European Communities: A Comparison, 82 MICH. L. REV. 1195 (1984).
[FN30]. The Brussels Convention binds signatory states-the members of the European Union-to rules for jurisdiction and enforcement roughly corresponding to the rules under International Shoe and its progeny. See PAUL R. BEAUMONT, ANTON & BEAUMONT'S CIVIL JURISDICTION IN SCOTLAND ch. 5, at 90-124 (1995) (explaining bases of jurisdiction under convention).
[FN31]. Id. § 1.10, at 6-7 (1995) (explaining exorbitant bases of jurisdiction with examples).
[FN32]. See 937 F. Supp. 295 (S.D.N.Y. 1996), aff'd, 126 F.3d 25, 27 (2d Cir. 1997) (state law does not authorize personal jurisdiction based on web posting in Missouri, despite alleged effect on New York trademark; no need to reach due process considerations).
[FN33]. See Compuserve, Inc. v. Patterson, 89 F.3d 1257, 1263 (6th Cir. 1996).
[FN34]. See Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997).
[FN35]. The Ninth circuit considered the Compuserve and Bensusan decisions from the Second and Sixth circuits, and found them consistent. It decided that merely placing a trademark on a website did not justify the assertion of jurisdiction by a court in the place where a competing trademark owner resides. It found that mere knowledge that a web site is visible from all over the world does not satisfy the purposeful availment requirement of International Shoe. It distinguished other cases, including Zippo, where the defendant subjected to jurisdiction had targeted the forum state or had engaged in conduct after the web posting resulting in interaction with those in the forum state. See id., distinguishing EDIAS Software Int'l, L.L.C. v. BASIS Int'l Ltd., 947 F. Supp. 413 (D. Ariz. 1996); Heroes, Inc. v. Heroes Found., 958 F. Supp. 1 (D.D.C. 1996) (web page that solicited contributions and provided toll-free telephone number along with the defendant's use on the web page of the allegedly infringing trademark and logo, along with other contacts, provided sustained contact with the District), amended by No. Civ.A.96- 1260(TAF) (1997); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) (finding purposeful availment based on Dot Com's interactive website and contracts with 3000 individuals and seven Internet access providers in Pennsylvania allowing them to download the electronic messages that form the basis of the suit); Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, 1332-33 (E.D. Mo. 1996) (browsers were encouraged to add their address to a mailing list that basically subscribed the user to the service), reconsideration denied, 947 F. Supp. 1338 (1996); Inset Sys., Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996).
[FN36]. See Panavision Int'l v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996).
[FN37]. The court in Resuscitation Techs., Inc. v. Continental Health Care Corp., No. IP 96-1457-C-M/S, 1997 WL 148567 (S.D. Ind. Mar. 24, 1997) similarly found personal jurisdiction in Indiana appropriate. The defendant contacted the plaintiff based on the plaintiff's webpage, posted in Indiana, and then began a series of e-mail and physical contacts that contemplated operations in Indiana. See also Digital Equip. Corp. v. Altavista Tech., Inc., 960 F. Supp. 456, 462 (D. Mass. 1997) (totality of ATI's minimum contacts with Massachusetts-a contract with a Massachusetts corporation, reflecting an agreement to apply Massachusetts law, soliciting business through its website, including Massachusetts business, and three sales to Massachusetts residents- made it unnecessary to reach novel issues; no matter whether user clicked on webpage, called telephone number, or answered mail). But see Hearst Corp. v. Goldberger, No. 96 CIV. 3620 PKL AJP, 1997 WL 97097 (S.D.N.Y. Feb. 26, 1997) (website maintained in New Jersey was insufficient to establish jurisdiction in New York even if its contents were targeted at New York residents, drawing analogies to cases involving advertisements in national magazines).
[FN38]. No. C6-95-7227 (Dist. Minn. Dec. 11, 1996).
[FN39]. "However, so far as we are aware, no court has ever held that an Internet advertisement alone is sufficient to subject the advertiser to jurisdiction in the plaintiff's home state. See, e.g., Smith v. Hobby Lobby Stores, 968 F. Supp. 1356 (W.D. Ark. 1997) (no jurisdiction over Hong Kong defendant who advertised in trade journal posted on the Internet without sale of goods or services in Arkansas). Rather, in each, there has been "something more" to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state." See Cybersell, 130 F.3d at 418.
[FN40]. <http://www.state.mn.us/cbranch/ag/memo/txt>; Complaint, Minnesota v. Granite Gate Resorts (visited Oct. 21, 1998) <http:// www.state.mn.us/home/consumer/consumernews/OnlineScams>; <http:// www.state.mn.us/consumer/news/OnlineScams> (order, recognizing jurisdiction); < http://www.loundy.com/E-LAW_Links.htm#jurisdiction>.
[FN41]. See Reid Kanaley, Raid! Cyber Gambling's First Run-In with the Law, PHIL. INQUIRER, May 30, 1997, at C1. In early 1997, a state (land) government in Germany caused a local executive of CompuServe to be invited for allowing hate speech to enter Germany in violation of German criminal law.
[FN42]. See International Shoe, 326 U.S. 310 (1945).
[FN43]. International law operates as a constraint on municipal (national) law. A positive source of law must authorize the execution before it can occur. See RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 431(3)(c) (1987) (enumerating grounds for jurisdiction to enforce). "The right to or in the thing must already have vested for there to be a cause of action. The action in rem does nothing more than declare the status of a preexisting right." Matthew P. Harrington, Rethinking in Rem: The Supreme Court's New (And Misguided) Approach to Civil Forfeiture, 12 YALE L. & POL'Y REV. 281, 286 & n.21 (1994). See also Rhonda Wasserman, Equity Renewed: Preliminary Injunctions To Secure Potential Money Judgments, 67 WASH. L. REV. 257 (1992) (suggesting preliminary injunctions as mechanism for preventing dissipation or hiding of assets before judgment can be obtained).
[FN44]. The United Kingdom and other law jurisdictions have developed the "Mareva" injunction, which prohibits the owner from removing or disposing of assets from the jurisdiction. Walker, supra note 4, at 203. France and much of the rest of the continent have a conservatory attachment (saisie conservatoire) procedure which serves the same purpose. Id. at 205.
[FN45]. E.g., einstweilige verfugung (German temporary injunction).
[FN46]. The steps in civil contempt are the service of a notice of contempt, a hearing in which the court makes a factual determination whether contempt is occurring, issuance of a contempt order in which sanctions for further noncompliance are specified, and reduction of the sanctions to judgment if further noncompliance occurs. The steps in civil contempt are the issuance of a notice, the opportunity for bail if arrest occurs, a hearing at which criminal standards of proof apply, and a conviction or acquittal.
[FN47]. Lehman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 451 (1932) (reversing court of appeals and reinstating contempt order of district court against defendant in patent infringement suit who engaged in violation of Massachusetts injunction in Michigan after participating in lawsuit in Massachusetts); see also Ernest J. Messner, The Jurisdiction of a Court of Equity Over Persons to Compel the Doing of Acts Outside the Territorial Limits of the State, 14 MINN. L. REV. 494, 514-29 (1930) (citing cases and other authority); Phelps v. McDonald, 99 U.S. 298, 308 (1878) (when necessary parties are before a court of equity, immaterial that res of controversy is beyond territorial jurisdiction of tribunal); French v. Hay, 89 U.S. 231 (1874) (court with in personam jurisdiction has power to require defendants to act outside limits of territorial jurisdiction.) But see People v. Central R.R., 42 N.Y. 283 (1870) (New York court lacks jurisdiction to order abatement of nuisance in New Jersey).
[FN48]. See Waffenschmidt v. MacKay, 763 F.2d 711 (5th Cir. 1985).
[FN49]. See id. at 716.
[FN51]. Id. (citing Lehman). This is the circumstance of the first defendant in the textual hypothetical.
[FN52]. Id. at 717; see Fed. R. Civ. P. 65(d).
[FN53]. See Waffenschmidt, 763 F.2d at 717 (citing Ex parte Lennon, 166 U.S. 548, 555 (1897)); Alemite Mfg. Corp. v. Staff, 42 F.2d 832 (2d Cir. 1930).
[FN54]. See Waffenschmidt, 763 F.2d at 717.
[FN55]. See id. at 718.
[FN56]. See id. at 723. That left a problem of service of process under Fed. R. Civ. P. 4, as it then existed. Because then Rule 4(f) and (e) allowed extraterritorial service of process when permitted by state law, and Mississippi allowed service on nonresidents committing acts outside the state with foreseeable effects resulting within the state, service of the injunction on the Texas actors was permissible. See id. at 720. Subsequently, the federal rules were amended to add Rule 4.1:
an order of civil commitment of person held to be in contempt of a decree or injunction issued to enforce the laws of the United States may be served and enforced in any district. Other orders in civil contempt proceedings shall be served in the state in which the court issuing the order to be enforced is located or elsewhere within the United States if not more than 100 miles from place at which the order to be enforced was issued.
Fed. R. Civ. P. 4.1(b). The Advisory Committee notes make it clear that nationwide service of contempt papers is contemplated only when the injunction enforces federal law. For injunctions that enforce state law, the more limited 100 mile rule applies. Rule 4.1 was intended to conform civil contempt service to the service permissible for criminal contempt because 28 U.S.C. § 3041 permits criminal contempt enforcement against a contemnor wherever the contemnor may be found. Advisory Committee notes to Fed. R. Civ. P. 4.1. Thus, service of contempt papers from federal court no longer depend on state service of process rules unless it is state law that is being enforced. This is a typical assertion of long-arm jurisdiction. Under such state statutory or rule text, the service-of-process analysis repeats the personal jurisdiction power analysis under International Shoe.
[FN57]. See Waffenschmidt, 763 F.2d at 723-27.
[FN58]. 639 F. Supp. 69 (N.D. Cal. 1985).
[FN59]. Id. at 72 (quoting Alemite, 42 F.2d 832 (2d Cir. 1930)).
[FN60]. Lynch, 639 F. Supp. at 71-72.
[FN61]. Id. at 74 (distinguishing facts of Waffenschmidt, 763 F.2d 711).
[FN62]. Reebok Int'l, Ltd. v. McLaughlin, 827 F. Supp. 622 (S.D. Cal. 1993), rev'd, 44 F.3d 1387 (9th Cir. 1995).
[FN63]. Reebok, 827 F. Supp. at 624 & n.1.
[FN64]. Banque Internationale A Luxembourg S.a. v. Reebok Int'l, Ltd., 49 F.3d 1387, 1391-92 (9th Cir. 1995).
[FN66]. Id. at 1392.
[FN68]. Id. at 1394.
[FN69]. Id. at 1393.
[FN70]. SEC v. Current Fin. Servs., Inc., 798 F. Supp. 802, 806 & n.11 (D.D.C. 1992) (notice to parties is presumed; must prove notice, but not formal service, on nonparties); United States v. Hochschild, 977 F.2d 208, 212 (6th Cir. 1992) (actual notice avoids need for formal service of process for civil contempt, acknowledging I.A.M. Nat'l Pension Fund v. Wakefield Indus., Inc., 699 F.2d 1254, 1260 (D.C. Cir. 1983) (mail service of contempt motion on nonparty insufficient, to the contrary)); Envtl. Defense Fund, Inc. v. Envtl. Protection Agency, 485 F.2d 780, 784 & n.2 (D.C. Cir. 1973) (nonparties with actual notice bound by temporary restraining order even though not formally served; citing early cases); Select Creations, Inc. v. Paliafito Am., Inc., 852 F. Supp. 740, 778-80 (E.D. Wis. 1994) (reviewing Reebok and other earlier cases and holding that nonparty may be subjected to contempt as an aider or abettor only when that party has notice of injunction and notice that acting in concert with certain persons would subject them to contempt proceedings, but need not have formal service; evidence showed lack of notice, thus no contempt permissible because jurisdiction lacking); Fed. R. Civ. P. 4.1 Advisory Committee Notes (service of process not required to notify party of decree, injunction, or show cause order for contempt).
[FN71]. See section VI.B. of this article.
[FN72]. See id. To some extent, this model for jurisdiction to adjudicate is similar to in rem in admiralty. In admiralty procedure, the vessel is seized to begin the suit, Walker, supra note 3, at 182, and if the vessel escapes before it can be seized, jurisdiction over it is lost. Unlike the concern in the early cases denying execution against copyright, the vessel is localized, and only one sovereign at a time can assert jurisdiction over it. Maritime liens attached to the ship where the claim arose traveled with it and could be extinguished only by proceedings in admiralty. Id. at 186 (citing United States v. The Little Charles, 26 F. Cas. 979 (C.C. Va. 1818) (No. 15,613); The Palmyra, 25 U.S. (12 Wheat.) 1, 14-15 (1827); Harmony v. United States, 43 U.S. (2 How.) 210, 233-38 (1844)). The concept may be different in other countries, but the presence of property can support in personam jurisdiction as well as in rem jurisdiction. See Shaffer v. Heitner, 433 U.S. 186 (1977).
The concept of in-rem jurisdiction or quasi-in-rem jurisdiction is unknown in Japan. A justiciable controversy may arise between persons over a certain thing which is the res, but not between a person and a thing. A thing is an object of a suit, it cannot be a party to a suit. This jurisdiction is always necessarily in personam.
[E]ven when an alien has no domicile or residence in Japan, a Japanese court can still exercise jurisdiction over any of the alien's assets found in Japan. However, the courts have held that there must be justice and fairness when they rule on the relationship to Japan, so that the property involved must be sufficient to make the exercise of jurisdiction reasonable under article 8 of the Japanese Code of Civil Procedure.
Thomas S. Mackey, Jr., Litigation Involving Damages To U.S. Plaintiffs Caused by Private Corporate Japanese Defendants, 5 TRANSNAT'L LAW. 131, 168 (1992). The law defining the types of property subject to execution is murky. Patents and copyrights traditionally were not subject to "simple" execution but were reachable in proceedings supplementary to execution.
[FN73]. Security-First Nat. Bank v. Republic Pictures Corp., 97 F. Supp. 360 (S.D. Cal. 1951) (distinguishing between execution against copperplate engraving and execution of copyright associated with it); Stephens v. Cady, 55 U.S. 528 (1852) (same).
[FN74]. For example, the route from www.kentlaw.edu to iit.edu on October, 20, 1998, was 220.127.116.11-18.104.22.168-22.214.171.124-126.96.36.199. One of the characteristics of the Internet is that routes change as network conditions change.
[FN75]. Internet Assigned Numbers Authority (visited Sept. 1, 1998) <http:// www.iana.org>.
[FN76]. Although the IAHC mechanisms was operating in early 1998, hoped-for support from the United States government did not materialize. Instead, the government issued a "green paper" calling upon affected interests to establish a nonprofit corporation to manage domain names and associated matters of IP address assignment. Pressures had grown in the United States Congress for keeping control of domain names and IP addresses in the United States, while the European Commissioner with jurisdiction, Martin Bangaman, called for an international body to take control.
In a White Paper issued in June 1998, the United States government invited formation of a non-profit corporation to handle domain name administration. For more information, see <http://www.ntia.doc.gov>. The result was the formation of the Internet Corporation for Assigned Names and Numbers (ICANN). For more information, see <http://www.iana.org>.
The October 2, 1998 transmittal letter from ICANN notes that the details of dispute resolution procedures for trademark/domain name controversies will be determined by the new board. ICANN is thus less explicit than IAHC about dispute resolution machinery.
The IAHC bodies expressed support for the ICANN structure. For more information, see <http://www.gtld-mou.org>.
[FN77]. Final Report of the Int'l Ad Hoc Comm. (visited Sept. 1, 1998) < http:// www.gtld-mou.org/draft-iahc-recommend-00.html> [hereinafter IAHC Report].
[FN78]. But see Bruno Giussani, International Council to Take Up Issue of Domains Names, N.Y. TIMES, CYBERTIMES, (June 18, 1997) <http:// www.nytimes.com> (reporting on opposition to ITU role by Internet service providers).
[FN79]. IAHC Report, supra note 74, § 7.2.3.
[FN80]. Memorandum of Understanding for the Internet Council of Registrars, art. 8(b) (visited Sept. 1, 1998) <http://www.gtld-mou.org/docs/cor-mou.html>.
[FN82]. Interim Policy Ovesight Comm. § II (visited Sept. 1, 1998) <http:// www.gtld-mou.org/docs/.cor-mou.html>.
[FN83]. Id. § III(A).
[FN84]. Id. § IV.
[FN85]. Id. § V(A).
[FN86]. Id. § V(C).
[FN87]. Id. § V(D).
[FN88]. See memorandum prepared by the Int'l Bureau, May 16, 1997, tdn/cm/I/3 (visited Sept. 1, 1998) <http:// www.wipo.org/eng/internet/domains/tdn/cm/cm_i_ 3.htm#mou> [hereinafter WIPO Memorandum].
[FN89]. Id. § III.
[FN90]. Id. § IV.
[FN91]. Id. § IV (procedural rules).
[FN93]. World Intellectual Property Organization Internet Domain Name Process (visited Oct. 21, 1998) <http:// www.wipo2.wipo.int/process/eng/processhome.html>.
[FN94]. Id. § IV (substantive rules).
[FN95]. Semi-autonomous because it relies in part on other legal systems for its substantive norms and because it anticipates application of those norms both by its own dispute resolution mechanism and by dispute resolution institutions of other legal systems.
[FN96]. As note 76, supra, explains, the focus of policymakers shifted in 1998 to the ICANN, which is less explicit on rulemaking and adjudication than the IAHC.
[FN99]. W.I.P.O. Arbitration Rules, art. 4 (visited Sept. 1, 1998) <http:// www.arbiter.wipo.int/a_and_m_center/arbitration-rules/index.html#notices>.
[FN100]. W.I.P.O. Expedited Arbitration Rules (visited Sept. 1, 1998) < http:// www.wipo.arbiter.wipo.int/a_and_m_center/expedited-rules/index.html> (expedited arbitration rule modifications); W.I.P.O. Mediation Rules (visited Sept. 1, 1998) <http://www.arbiter.wipo.int/a_and_m_center/mediation- rules/index.html #commencement> (mediation rules).
[FN101]. A joint project of the Chicago-Kent College of Law at the Illinois Institute of Technology and the Villanova University School of Law.
[FN102]. See Perritt, Cyberspace and State Sovereignty, supra note 11, at 180-87.
[FN103]. See John M. Scheib, Threshold of Lasting Peace: The Bosnian Property Commission, Multi-Ethnic Bosnia and Foreign Policy, 24 SYRACUSE J. INT'L L. & COM. 119 (1997).
[FN104]. See Perritt, Cyberspace and State Sovereignty, supra note 11 (explaining how Internet-based conduct evades the power of traditional sovereign states).
[FN105]. "Foreign" in the most general sense in which it is used in this paragraph refers not only to judgments from other sovereigns, but also refers to judgments of other tribunals that do not have their own coercive means, e.g. administrative agencies or arbitration panels.
[FN106]. UNIF. FOREIGN MONEY JUDGMENTS RECOGNITION ACT, 13 U.L.A. 261 (1998).
[FN107]. See Mata v. Am. Life Ins. Co., 771 F. Supp. 1375 (D. Del. 1991).
[FN108]. JOSEPH STORY, COMMENTARIES ON THE CONFLICT OF LAWS § 586, at 978 (4th ed. 1852) (universally accepted that, foreign judgment not supported by jurisdiction is treated as a mere nullity, entitled to no respect). The personal jurisdiction and procedural due process standards areessentially American in character.
[FN109]. Matusevitch v. Telnikoff, 877 F. Supp. 1 (D.D.C. 1995) (declining to recognize and enforce British libel judgment under Maryland's Uniform Foreign-Money Judgments Recognition Act because British libel law lacked constitutional protections applied in the United States).
[FN110]. Authority for collateral estoppel and res judicata effect of recognized judgment is determined by preclusion law of rendering state.
[FN111]. UNIF. ENFORCEMENT OF FOREIGN JUDGMENTS ACT, 13 U.L.A. 152 (1964).
[FN112]. In such a lawsuit, the plaintiff should be entitled to summary judgment based on recognition of the foreign judgment.
[FN113]. BEAUMONT, supra note 30, § § 1.28-1.30, at 14-16 (overview of convention's summary enforcement procedures).
[FN114]. See Don Docksteader Motors, Ltd. v. Patal Enters., Ltd., 794 S.W.2d 760, 760-61 (Tex. 1990) (constitutional entitlement to challenge recognition within the judgment enforcement process; Texas version of uniform recognition act met requirements). If a new lawsuit is brought on the debt represented by a foreign judgment, the recognition issue would arise in adjudication of the plaintiff's summary judgment motion. If recognition is denied, of course, the plaintiff would have to retry the merits.
[FN115]. gTLD-MOU, § V(A).
[FN116]. See generally HENRY H. PERRITT, JR., EMPLOYEE DISMISSAL LAW AND PRACTICE, ch. 3 (4th ed. 1997) (summarizing U.S. law on admissibility of arbitration awards in judicial proceedings).
[FN117]. Compare Alexander v. Gardner Denver, 415 U.S. 36, 60 n.21 (1974) (denying preclusive effect to labor arbitration awards but allowing them great weight in subsequent judicial proceedings, and suggesting criteria to determine weight to be given).
[FN118]. RESTATEMENT (SECOND) OF JUDGMENTS § 84 (1982).
[FN119]. See 9 U.S.C. § 1 (1994).
[FN120]. See UNIF. ARBITRATION ACT, 7 U.L.A. 1 (1985 & 1991). About forty states have adopted the Uniform Arbitration Act.
[FN121]. See U.L.A. § 1; 9 U.S.C. § 2 (enumerating limited basis for refusing recognition).
[FN122]. See RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § § 487-88 (1986).
[FN123]. See Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38.
[FN124]. Compare AAA International Arbitration Rules, art. 1 (1991) with UNCITRAL Rules, art. 1 (1994).
[FN125]. See supra note 124 and accompanying text for a description of UNCITRAL.
[FN126]. See also Rules of Procedure of the Inter-American Commercial Arbitration Commission (1988), reprinted in 1991 WL 537102 (A.A.A.), at 2 (substantive rules are those of UNCITRAL, adapted for institutional requirements of Inter-American Commercial Arbitration Commission, established by the Inter-American Convention on International Commercial Arbitration, signed in Panama on January 30, 1975, at the Inter-American Specialized Conference on Private International Law).
[FN127]. RESTATEMENT (SECOND) OF JUDGMENTS § § 81, 82 (1980).
[FN128]. See Mata, 771 F. Supp. 1379, 1380; RESTATEMENT (THIRD) OF FOREIGN RELATIONS § 481 cmt. c (1986).
[FN129]. RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 98 (1971).
[FN130]. See id. § 98 cmt. b.
[FN131]. See id. § 100 cmt. d.
[FN132]. See id. § 102 cmt. g.
[FN133]. Full faith and credit requires that, absent a violation of due process, states must respect judgments from sister states as if they were their own. See Parsons Steel Inc. v. First Ala. Bank, 106 S. Ct. 768 (1986); Marrese v. Am. Academy of Orthopedic Surgeons, 105 S. Ct. 1327 (1985); Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75 (1984).
[FN134]. Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, Sept. 27, 1968, 1968 O.J. (L 299) 33, reprinted in 29 I.L.M. 1413 (1990); Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Sept. 16, 1988, 1988 O.J. (L 319) 1, reprinted in 28 I.L.M. 620 (1989).
[FN135]. See Cerezo v. Babson Bros. Co., 1992 WL 18875 (N.D. Ill. Jan. 24, 1992) [not reported in F. Supp.] (prejudgment attachment issued by Spanish court not entitled to recognition under Illinois Uniform Foreign Money Judgments Recognition Act because not final and conclusive, and no notice to defendant)
[FN136]. UNIF. RECOGNITION ACT § 2.
[FN137]. Id. § 1(2).
[FN138]. See id. § 1(1).
[FN139]. Id. § 3.
[FN140]. Id. § 4(a).
[FN141]. Id. § 4(b).
[FN142]. See Guiness PLC v. Ward, 955 F.2d 875, 884 (4th Cir. 1992).
[FN143]. Hague Convention on the Civil Aspects of International Child Abduction (visited Sept. 1, 1998) <http://www.ct-divorce.com/hague.htm>.
[FN144]. See Hague Custody Convention, art. 3(a), July 1, 1998.
[FN145]. Id. art. 8.
[FN146]. Id. art. 10-11.
[FN147]. Id. art. 12.
[FN148]. Id. art. 13.
[FN149]. Id. art. 14.
[FN150]. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW § 201 (defining state); Kadic v. Karadzic, 70 F.3d 232, 244 (2d Cir. 1995) (explaining sovereignty as a concept).
[FN151]. The difference between privilege and immunity can be subtle. In theory, immunity shields the defendant from having to respond at all to a court; it limits the power of the court. A privilege is an affirmative defense to be pleaded and proven in the litigation; it admits the power of the court and simply defeats liability.
[FN152]. See 468 U.S. 85 (1984) (exclusive arrangements for television football games were not justified by pro-competitive effects).
[FN153]. See Radiant Burner Inc. v. Am. Gas Ass'n, 320 F.2d 314 (7th Cir. 1963) and related cases.
[FN154]. Pope v. Miss. Real Estate Comm'n., 695 F. Supp. 253, 272 (N.D. Miss. 1988) (citing U.S. Realty Multi-List, Inc., 629 F.2d 1351, 1370 (5th Cir. 1980), in support of conclusion that association of realtors possessed market power); NCAA, 468 U.S. at 101-02 (antitrust laws allow sports leagues to make and enforce rules because they are necessary to preserve the character and quality of "product").
[FN155]. See San Juan v. Am. Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 250 (7th Cir. 1994) (Easterbrook, J.) (explaining basis for suspicion that no-suit agreement may be a device for suring up a cartel, but allowing agreements to arbitrate antitrust disputes under Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985)).
[FN156]. See 42 U.S.C. § 11112(a) (1994).
[FN157]. See id. § 11112(b)(3)(A)(iii) (1994).
[FN158]. See Smith v. Our Lady of the Lake Hosp., Inc., 639 So.2d 730, 742 (La. 1994) (describing federal act). Similar state statutes exist in almost every state. Id. at 742. State tort privileges have similar criteria. Id. at 743.
[FN159]. Willman v. Heartland Hosp. E., 34 F.3d 605, 610 (8th Cir. 1994).
[FN160]. Id. at 610-11.
[FN161]. Id. at 611.
[FN162]. See Roxanne C. Busey, Structuring Peer Review to Minimize Antitrust Risk after Patrick, 3 SPG ANTITRUST 12, 13 (1989).
[FN163]. See id. at 15.
[FN164]. See id. at 16.
[FN165]. Clark C. Havighurst, Professional Peer Review and the Antitrust Laws, 36 CASE W. RES. L. REV. 1117 (1986).
[FN166]. Id. at 1119.
[FN167]. Id. at 1120.
[FN168]. Id. at 1129.
[FN169]. See id. at 1144-45.
[FN170]. See id. at 1147. See also id. at 1150-51 ("professionally promulgated quality standards, backed by possibility of exclusion from the market, represent a real danger that physicians' clinical methods will be centrally determined, contrary to the premises of the antitrust laws").
[FN171]. See 320 F.2d at 314.
[FN172]. See id.
[FN173]. A student note expresses skepticism, however, that a "sovereign cyberspace" comprising "extra-governmental agencies" can survive rule of reason scrutiny under the antitrust laws, which prefer decentralized decisionmaking when it is technically feasible. Josh A. Goldfoot, Antitrust Implications of Internet Administration, 84 VA. L. REV. 909, 951-53 (1998) (noting antipathy for "extra-governmental agencies" expressed in Fashion Originators Guild of Am. v. Fed'l Trade Comm., 312 U.S. 457, 465 (1941) ("The combination is in reality an extra-governmental agency, which prescribes rules for the regulation and restraint of interstate commerce, and provides extra-judicial tribunals for determination and punishment of violations, and thus 'trenches upon the power of the national legislature and violates the statute."')). The court reiterated antipathy for "extra-governmental agencies" in American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp., 456 U.S. 556, 570 (1982) (affirming judgment against trade associations for antitrust violation), and the court of appeals scrutinize private government arrangements closely as well. See Wilk v. Am. Med. Ass'n, 719 F.2d 207, 228 (7th Cir. 1983) (reversing judgment for medical society that discouraged dealing with chiropractors, citing Fashion Originators).
[FN174]. See RESTATEMENT (SECOND) OF TORTS § 582 (25) (1977).
[FN175]. Cyber Promotions, Inc. v. Apex Global Info. Serv., No. 97-5931, 1997 WL 634384 (E.D. Pa. Sept. 30, 1997) (granting preliminary injunction against termination of service to mass mailer in violation of Internet access contract).
*1163 Appendix-October 8 Criteria
On October 8, 1997, those indicated on the attached list met in Washington, at a conference hosted by the Center For Information Law and Policy (CILP), [FN176] to define the boundary between Internet self governing systems, and governments of sovereign countries. CILP convened the meeting in response to declarations by European and U.S. governments for private sector leadership and self-regulation of the Internet. Participants recognized that no system of self-governance can be cut off from any national system of law, and that the degree of connection between private regulatory bodies and traditional legal institutions varies by issue. In any system of self-regulation it is necessary to ask what can be done to heighten confidence that a particular issue will be handled in a way that will be fair, legitimate, and efficient. Self-regulatory systems meeting certain criteria can inspire that confidence. The participants in the October 8 meeting reached an agreement-in-principle on five such criteria, which are set forth below. The strength of agreement was greater for the first three criteria than the fourth and fifth, and greater on the text of each criterion than on the explanatory notes that follow the statement of each criterion. The explanatory notes are examples and limitations to explain the intended operation of the criteria. Not every participant on October 8 agreed with every word of the principles and the explanatory notes, but the following statement fairly reflects the sense of the group taken as a whole. These criteria are intended to be used by the designers of self-regulatory systems, by government policymakers, and judges to determine the degree of deference owed to the decisions of private self-regulatory bodies for the Internet. A self-regulatory system meeting all the criteria should be entitled to judicial deference and to some insulation from competition and tort law with respect to private decisions made consistent with its constitutional documents.
1. Any private system of Internet domain name administration and any other aspects of self-regulation must be transparent.
Explanatory notes: Rules and agreements should be disseminated and published widely on the Internet, in an understandable and complete form. The process for amending and setting rules should be fully disclosed. Rules should be able to be created and changed only after an adequate notice period. Initiation and results of adjudications should be fully disclosed, including the factual and legal basis for the decision. Enforcement procedures *1164 and decisions should be fully disclosed. Who is making decisions and how they were selected should be publicly disclosed.
2. Rule making and adjudication within a private governance body must provide due process.
Explanatory notes: Decisions should be expressed in writing (including electronic formats). Adjudicatory decisions should be preceded by some form of hearing appropriate to the factual issues, and to the magnitude of the interests at stake. Decisions on rules and adjudications should be preceded by notice. Review of self-government decisions should be available, but should be confined to whether due process was made available not to the correctness of the decision on the merits; exceptions to this limitation on review should be reserved to cases implicating the protective principle below.
3. The actions of a private system of Internet domain name administration must be accountable.
Explanatory notes: The market provides a substantial degree of accountability, insofar as registrants may choose freely (in a free market) among a number of different registrars and registries offering diverse terms, conditions and policies. Additional accountability stems from the felt duty of all industry providers to assure that the Internet continues to work smoothly. Policymaking should be centralized only for issues as to which there is a need for a single, central rule, such as the policy of concurrence or interoperation. Each registrar is accountable to registrants according to the terms of the registration contract, and vice versa, provided that the registrar does not engage in fraud. Countries may or may not choose to require that actions within a country code comply with, and are thus accountable to, the law or policy established by that local government. In any event, the relationship between any particular country code domain and the law or institutions of a particular country should be disclosed to registrants, who should be free to decide whether or not to contract to register within such domains. Registries, which set policies for any particular domain and the corresponding set of registrars, should promise each other that they will enforce their own stated policies, and should be accountable to each other for doing so. Registries, individually and in groups, should appoint or elect appropriate bodies to resolve disputes and make rules with respect to registrations within their domains. One or more new entities, constituted as membership organizations or non-profit corporate entities (perhaps with multiple classes of stock), membership in (or ownership of), which is open to all in exchange for appropriate fees, should establish or oversee policies for various domains. Entities governing particular domains may appoint or elect a centralized entity to coordinate their actions and/or play the centralized roles previously performed by IANA. The decisions of such domain policy setting entities should be entitled to deference by local courts under doctrines similar to the business judgment rule, and under the criteria expressed in this document. Insofar as the officers or trustees*1165 of entities exercising policy oversight over domains are elected on the basis of membership or stock ownership, individual persons or corporations should not be allowed to accumulate or vote multiple or duplicative memberships or ownership interests. Such memberships or stock interests may have multiple classes, reflecting appropriately the relative economic stake or representative reach of the institutions eligible to hold such classes of membership or stock.
4. An open opportunity must exist for anyone meeting stated qualifications to participate.
Explanatory notes: Openness must operate on four levels: cooperative agreements among sovereigns (treaties); composition and deployment of policy oversight entity; freedom of entry among registrars (multiple business models); and consumer choice (portability and variety). Freedom of entry for registries should be tempered by assurances of continuous and accurate resolution of domain name requests by way of a shared database, insurance against private failure leading to collapse of system by way of surety bonds, and maintenance of "slave" servers. ISPs should subsidize the root server infrastructure.
5. Acceptable criteria must exist to avoid contract overreaching and for intellectual property protection and protection of the interests of third parties.
Explanatory notes: Inter-registrar agreements should recognize intellectual property rights. There must be some recourse to national sovereignty. Dispute policy must come from a source other than registrars. It may be desirable for all registrars to follow the same dispute policy. Adjudicators (dispute resolvers) should be empowered to set aside overreaching contract provisions. "Overreaching" must be carefully defined but, for example, the agreement that "anyone with a trademark registration wins" is an example of overreaching. Domain name holders (but not holders of email addresses) must be known; anonymity is not permitted. Some guidance should be provided on jurisdictional issues.
B. HYBRID SYSTEMS
The responsibility of private collective action can be bifurcated. For example, antitrust immunity problems would be greatly reduced by relying on private collective bargaining to make rules, with enforcement left to public authorities. Alternatively, antitrust immunity problems could be reduced by relying on breach of contract lawsuits (or arbitration) rather than expulsion from a collective arrangement or refusals to deal, which trigger much greater antitrust scrutiny. On the issue about government involvement in regulation (especially regarding pornography, copyright, etc.), why not take the stance that your concern is to assess the reasonable maximum amount of self- regulation? Then there is no need to assert that self-regulation is reasonable for all issues, nor is there need to deny that. Indeed, this seems to be the spirit of the paper.
[FN176]. The Center for International Law and Policy (CILP) is a Pennsylvania nonprofit corporation that supports cooperative efforts between Chicago-Kent College of Law at the Illinois Institute of Technology and Villanova University School of Law. CILP demonstrates use of the Internet to facilitate access to governmental information such as statutes, agency rules, and court decisions, and supports Internet policy development. For more information, see their web site at <http://www.cilp.org>.
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