Citing the case of Dow Jones v Gutnick  HCA 56, two of the terms that must be used in considering the questions that arise in this matter are terms that can give rise to difficulty. "Jurisdiction" is a generic term that is used in a variety of senses. In the present matter there are two distinct senses in which it is used - first, as referring to the amenability of a defendant to process in such a way as will give a court authority to decide the controversy which that process seeks to agitate and, secondly, as referring to a particular territorial or law area or law district.
Since so much was made in argument, both in this Court and in the courts below, of what was said to be the unusual features of publication on the Internet and the World Wide Web, it is necessary to say something about what the evidence revealed about those matters.
For present purposes, it is convenient to adopt what was said in that evidence without diverting to consider what qualification to, or amplification of, that evidence might be necessary to give a complete and entirely accurate description of the Internet or the World Wide Web.
One witness called by Dow Jones, Dr Clarke, described the Internet as "a telecommunications network that links other telecommunication networks". In his opinion, it is unlike any technology that has preceded it. The key differences identified by Dr Clarke included that the Internet "enables inter-communication using multiple data-formats ... among an unprecedented number of people using an unprecedented number of devices [and] among people and devices without geographic limitation".
The World Wide Web is but one particular service available over the Internet. It enables a document to be stored in such a way on one computer connected to the Internet that a person using another computer connected to the Internet can request and receive a copy of the document. As Dr Clarke said, the terms conventionally used to refer to the materials that are transmitted in this way are a "document" or a "web page" and a collection of web pages is usually referred to as a "web site". A computer that makes documents available runs software that is referred to as a "web server"; a computer that requests and receives documents runs software that is referred to as a "web browser".
The originator of a document wishing to make it available on the World Wide Web arranges for it to be placed in a storage area managed by a web server. This process is conventionally referred to as "uploading". A person wishing to have access to that document must issue a request to the relevant server nominating the location of the web page identified by its "uniform resource locator (URL)". When the server delivers the document in response to the request the process is conventionally referred to as "downloading".
Dow Jones has its editorial offices for Barron's, Barron's Online and WSJ.com in the city of New York. Material for publication in Barron's or Barron's Online, once prepared by its author, is transferred to a computer located in the editorial offices in New York city. From there it is transferred either directly to computers at Dow Jones's premises at South Brunswick, New Jersey, or via an intermediate site operated by Dow Jones at Harborside, New Jersey. It is then loaded onto six servers maintained by Dow Jones at its South Brunswick premises.
In the courts below, much weight appears to have been placed by Dow Jones on the contention that a relevant distinction was to be drawn between the apparently passive role played by a person placing material on a web server from which the would-be reader had actively to seek the material by use of a web browser and the (comparatively) active role played by a publisher of a widely circulated newspaper or a widely disseminated radio or television broadcast. In this Court, these arguments, though not abandoned, were given less prominence than policy arguments based on what was said to be the desirability of there being but a single law governing the conduct of a person who chooses to make material available on the World Wide Web.
Dow Jones submitted that it was preferable that the publisher of material on the World Wide Web be able to govern its conduct according only to the law of the place where it maintained its web servers, unless that place was merely adventitious or opportunistic. Those who, by leave, intervened in support of Dow Jones generally supported this contention. The alternative, so the argument went, was that a publisher would be bound to take account of the law of every country on earth, for there were no boundaries which a publisher could effectively draw to prevent anyone, anywhere, downloading the information it put on its web server.
The rule propounded by Dow Jones may have a greater appearance of certainty than it would have in fact. "Adventitious" and "opportunistic" are words likely to produce considerable debate. Does a publisher's decision to have a server in a country where the costs of operation are low, or the benefits offered for setting up business are high, warrant either of these descriptions? Does a publisher's decision to have servers in two, widely separated, states or even countries warrant either description, or is it simply a prudent business decision to provide security and continuity of service? How is the user to know which server dealt with a particular request? Is the fact that one rather than the other server met the request "adventitious"?
To the extent that the suggested rule would require reference only to the law of the place in which the server is located, it is a rule that would evidently be convenient to the party putting material on a web server. But that does not conclude debate. The convenience of one party is important to it, but how would such a rule fit with other, no less relevant, considerations? In particular, how would it fit with the nature of the competing rights and interests which an action for defamation must accommodate?
It is necessary to begin by making the obvious point that the law of defamation seeks to strike a balance between, on the one hand, society's interest in freedom of speech and the free exchange of information and ideas (whether or not that information and those ideas find favour with any particular part of society) and, on the other hand, an individual's interest in maintaining his or her reputation in society free from unwarranted slur or damage.
The way in which those interests are balanced differs from society to society. In some cases, for example as between the States in Australia, the differences in substantive law might be said to be differences of detail rather than substance, although even then it may be doubted that this is an accurate characterisation of the effect of the differences in the defamation laws of the Australian States. Whether or not that is so, comparing the law of defamation in different countries can reveal differences going well beyond matters of detail lying at the edge of debate.
It follows that identifying the law which is to govern questions of substance, in an action for defamation where there is some foreign element, may have substantial consequences for the resolution of the proceeding. No less importantly, those who would seek to order their affairs in a way that will minimise the chance of being sued for defamation must be able to be confident in predicting what law will govern their conduct. But certainty does not necessarily mean singularity. What is important is that publishers can act with confidence, not that they be able to act according to a single legal system, even if that system might, in some sense, be described as their "home" legal system.
Activities that have effects beyond the jurisdiction in which they are done may properly be the concern of the legal systems in each place. In considering where the tort of defamation occurs it is important to recognise the purposes served by the law regarding the conduct as tortious: purposes that are not confined to regulating publishers any more than they are confined to promoting free speech.
On the other hand, in the case of Young v New Haven Advocate 315 F.3d 256 C.A.4 (Va.), the United States Court of Appeals for the Fourth Circuit holds that specific jurisdiction in the Internet context may be based only on an out-of-state person’s internet activity directed at the forum state and causing injury that gives rise to a potential claim cognizable in that state. That standard for determining specific jurisdiction based on internet contracts is consistent with the one used by the United States Supreme Court.
The US Court of Appeals for the Fourth Circuit holds that a state may, consistent with due process, exercise judicial power over a person outside of the state when that person: (1) directs electronic activity into the state, (2) with the manifester intent of engaging in business or other interactions into the state, and (3) that activity creates,in a person within the state, a potential cause of action cognizable in the state’s courts.
When the internet activity is in the posting of news articles on the website, the test works smoothly when parts one and two of the test are considered together. In this case the Court said that the person’s act of placing information in the Internet is not sufficient by itself to that person to personal jurisdiction in each state in which the information is accessed. Otherwise, a person placing information on the Internet would be subject to personal jurisdiction in every state, and the traditional due process principles governing a state’s jurisdiction over persons outside of its borders would be subverted.
Thus, the fact that the newspaper’s website could be accessed anywhere, does not by itself demonstrate that the newspaper is intentionally its website content to a particular state’s audience. Something more that posting and accessibility is needed to indicate that the newspaper purposefully directed its activity in a substantial way to the forum state. The newspaper must, through the internet postings, manifest an intent to target and focus on a particular state’s readers.
Lastly, personal jurisdiction is proper under Yahoo! Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 433 F.3d 1199 (9th Cir. 2006) (en banc). The issue raised was whether the State of California had jurisdiction over French citizens who attempted to enforce an order of a French court requiring Yahoo! Inc., a California resident, to comply with that order by modifying its computer hardware and software systems physically located in the United States? The reasoning was that The United States Supreme Court formally adopted the "foreign effects" test in Calder v. Jones to prevent wrongdoers from avoiding litigation in their victim's forum state.
In Calder, Shirley Jones filed a libel action against the National Enquirer that obtained enormous revenue from the sale of its paper in California. Likewise, in Panavision Int'l, L.P. v. Toeppen, Toeppen was a thoroughly unsympathetic "cyber-pirate" trying to extort money from Panavision. The Court stretched the "foreign effects" to make certain Toeppen was not getting off on a technical argument. The court in Yahoo! has taken the foreign effects test to its ultimate conclusion.
LICRA and UEJF did not do anything wrong; they did not make a financial gain nor seek to cause financial harm in California. Of course, they intended to effect Yahoo! Inc. by forcing it to comply with French law by obtaining a judgment against Yahoo! Inc. in France. That fact together with one cease and desist letter plus the use of officials to serve process in California is slim compared to the criteria supporting the result in Calder.
Rather, Yahoo! Inc. involves a clash of two legal systems in a world that is wired together. Whether a French magistrate has (or should have) the authority to require a United States corporation to re-engineer its Internet service to comply with French law is highly debatable and has far reaching consequences. But the language of Yahoo! Inc., for purposes of establishing jurisdiction over nonresidents, has the capacity to be misused later by other courts. The result is the extinction of any meaningful limits to court jurisdiction.