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It is likely that 1996 will be remembered as the year that cyberspace law came of age. In both Congress and individual state legislatures, a significant amount of legislation addressing the online world was introduced. And in the federal courts, a major increase was apparent in the number of cyberspace-related decisions handed down. While in previous years observers might have been hard-pressed to find more than a handful of cases addressing Internet-related topics, in 1996 there were 15-20 important opinions delivered in this regard.
In addition, at the policy level, the persons and groups who ostensibly control at least some part of the online world wrestled with an ever increasing number of compelling issues -- some new, others left over from previous years but still unresolved.
At the present time, it is probably correct to continue dividing cyberspace law into seven topic areas: freedom of expression, intellectual property, privacy, safety, electronic commerce, equity, and jurisdiction. While much has been happening in all these areas, freedom of expression and intellectual property are the two fields that have seen the most action -- at least with regard to cases and statutes.
In the First Amendment area, Congress passed the Communications Decency Act (CDA), which was immediately challenged in federal court. Two decisions have since found portions of this act unconstitutional. ACLU v. Reno, 929 F. Supp. 824 (E.D. Pa. 1996), and Shea v. Reno, 930 F. Supp. 916 (S.D. N.Y. 1996). Both cases are being appealed, and the U.S. Supreme Court has agreed to hear oral arguments on the CDA in March.
A number of states have sought to address problems of online obscenity and pornography by developing their own statutory schemes. In New York, for example, such a state law went into effect on November 1, 1996. N.Y. Penal Law ¤ 235.21 (3). However, it has recently been challenged in federal district court by a coalition of library groups, publishers, and Internet companies. ALA v. Pataki (S.D.N.Y., filed January 14, 1997).
In another closely watched free speech case, the Sixth Circuit upheld the conviction of Robert and Carleen Thomas for violating federal obscenity laws. The Thomases had operated a bulletin board service out of Northern California, but were convicted in Tennessee for selling pornographic material that was found to be obscene according to Memphis community standards. U.S. v. Thomas, 74 F.3d 701 (6th. Cir. 1996); cert. denied, 117 S.Ct. 74.
Finally, in a recent case that also had anti-trust implications, America Online's actions preventing unsolicited e-mail advertisements from reaching its subscribers via the Internet was held not to be violative of the First Amendment. Cyber Promotions, Inc. v. America Online, 1996 U.S. Dist. Lexis 16237 (E.D. Pa. 1996).
In the area of intellectual property, two major "digital age" bills stalled in Congress at the end of the summer. Copyright legislation based on the Clinton administration's controversial National Information Infrastructure white paper (HR 2441) apparently failed to advance because of an inability to resolve issues relating to service provider liability and the proposed ban on the manufacture of devices used to defeat encryption. In addition, a key patent reform act (HR 3460) was damaged by strong opposition from inventor groups who criticized it as overly favorable to large corporate patent holders.
On the international front, a highly publicized gathering of 160 countries in December led to the most sweeping extension of international copyright law in 25 years. The global agreement concluded in Geneva -- which would grant broader protections for creators in cyberspace -- must still be ratified by the U.S. Senate and other lawmakers around the world before it can go into effect.
One U.S. proposal which was eventually withdrawn because of objections from other countries would have extended copyright protection to computerized data bases that provide such things as sports scores and telephone listings. This issue was the basis of a recent lawsuit filed by the National Basketball Association against several online companies. The NBA argued that the companies' real-time reporting of game scores misappropriated its information before the association itself could use it. The court found for the NBA, but the ruling is being appealed. NBA v. Sports Team Analysis, 939 F. Supp. 1071 (S.D.N.Y. 1996).
ProCD, another database compiler, sued a Wisconsin graduate student who placed the CD-Rom's uncopyrightable directory on his web site. Although ProCD ostensibly prevailed at the appellate level, the Seventh Circuit ruling addressed the narrow question of whether a shrinkwrap license inside a computer software package is a valid contract under the UCC. ProCD v. Zeidenberg, 86 F. 3d 1447 (7th Cir. 1996). Thus the larger issue remains unresolved.
In the area of fair use, the Church of Scientology continued to find success in its efforts to prevent copyrighted texts from being posted on the Internet. In the most recent case, the court rejected the defendant's analogies to the fair uses of "news gathering, scholarship, and time-shifting," and refused to extend any special fair use consideration to uses on the Internet. Religious Technology Center v. Lerma, 1996 U.S. Dist. Lexis 15454 (E.D. Va. 1996).
In the area of trademark, the domain name controversy continued to garner a great deal of attention. Several decisions focusing on this issue were handed down, including Comp Examiner Agency v. Juris, Inc., 1996 WL 376600 (C.D. Cal. 1996) (use of domain name "juris.com" is likely to infringe the federally registered trademark "Juris"); Intermatic, Inc. v. Toeppen, 1996 U.S. Dist. Lexis 14878 (N.D. Ill. 1996) (summary judgment recommended in favor of plaintiff whose trademark was registered and used by defendant as a domain name); Panavision International, L.P. v. Toeppen, 1996 U.S. Dist. Lexis 19698 (C.D. Cal. 1996), (registration of another's trademark as domain name constitutes unlawful trademark dilution).
Other topic areas were also the subject of major developments. With regard to privacy, for example, the encryption controversy continued to be the focus of much debate. The Clinton administration recently revised their encryption exportation policy, and transferred oversight to the commerce department. In addition, the State Department prevailed in the related lawsuit of Karn v. Department of State, 925 F. Supp. 1 (D.D.C. 1996) (executive branch determination under Arms Export Control Act that disk containing cryptographic algorithms is subject to strict export control is not judicially reviewable). See also Bernstein v. Dept. of State, 1996 U.S. Dist. Lexis 18974.
In the area of safety, government investigators warned that computer hackers posed a serious and growing threat to national security. In the area of electronic commerce, issues relating to digital cash, electronic contracts, taxation, anti-trust, and consumer rights all moved to the front burner. In the area of equity, a growing consensus emerged with regard to the importance of enabling children from all segments of society to access the online world.
Finally, the area of cyberjurisdiction has been the subject of numerous recent decisions, with several courts holding that personal jurisdiction could be exercised by a state based on contacts in cyberspace: CompuServe v. Patterson, 89 F.3d 1257 (6th Cir. 1996), Maritz, Inc. v. Cybergold, Inc., 1996 U.S. Dist. Lexis 14978 (E.D. Mo. 1996), and Minnesota v. Granite Gate Resorts, Inc., No. C6-95-7227 (D. Minn. December 1996). In Bensusan Restaurant v. King, 1996 U.S. Dist. Lexis 13035 (S.D.N.Y. 1996) and McDonough v. Fallon McElligott, 1996 U.S. Dist. Lexis 15139 (S.D. Cal. 1996), however, the court determined that personal jurisdiction could not be exercised over a nonresident defendant whose only contact with the state was through its web site. And in Network Solutions, Inc. v. Clue Computing, Inc., 1996 U.S. Dist. Lexis 18013 (D. Col. 1996), the court found no subject matter jurisdiction in a domain name lawsuit under the federal interpleader statute.
In many of the legislative debates and courtroom arguments described above, the parties have begun to focus on questions of regulation and enforcement. Increasingly, legislators, commentators, and jurists are wondering how all these new laws and recent case decisions can be enforced in the freewheeling world of cyberspace. Undoubtedly, this overarching practical question will continue to move to the forefront in the months and years ahead.
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