Worldwide: The Game Of Courts In Cyber Crimes

Last Updated: 14 June 2017
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, October 2017

'It used to be the wealthier you were, the more immune you were to crime. Cyber crime has tipped it the other way'

- Neal O'Farrell

Jurisdiction is the practical authority of a legal body to administer and execute statutes and regulations within a well-defined area of territory and responsibility. Hence, when a crime has taken place in a particular territory, the courts of that territory would have the jurisdiction to hear the matter. However, which court will have the jurisdiction to hear a crime that which occurred on the internet? How can the territory of cyber space be identified in order to determine which court that would have the jurisdiction in the matter? Now let's indulge further. What about a crime by a corporate that has no physical office presence on the planet?

A multitude of confidential data is stored in a fluorescent dark room in every office. Therefore, it is crucial for the companies to identify cyber crimes and the courts that would have the jurisdiction to hear its related cases. The fiasco in internet jurisdiction arises due to the fact that parties who are situated miles apart are connected with each other through a virtual nexus. In today's world, a person sipping tea located in the suburbs of New Delhi will be able to hack and obtain information from the computer of a multi-conglomerate in New York.

Generally, the jurisdiction of a particular court is triggered depending upon the place where i) defendant resides, or ii) the cause of action arises. However, cybercrimes occur in a virtual and electronic medium of computer networks where communication takes place known as the cyber space. Technology has become the backbone of every corporate house today. Hence, the literal meaning of the words 'place' or 'area' in relation to a cyber-crime does not point towards one specific geographic location. However, the internet user does not wear an invisible cloak to conduct his activities in the cyber space. Internet users are situated in physical locations and are subject to the domestic laws of that particular area. This makes an internet user, who has committed a crime, prone to the risk of being sued in any country where another user can establish a claim. Therefore, jurisdictional issues have colossal value in internet crimes. The prominent issue in regard to internet jurisdiction lies in the question whether to treat the cyberspace as a physical location or to pretend that the internet is another world whole together. However, there is no single uniform law or legislation that has been accorded between all the countries in order to regulate the internet. A classic example of this is the fact that the legality of the contents of a website could differ from one country to another.

The American Style

The due process clause in the Fourteenth Amendment of the US Constitution has prescribed the validity of personal jurisdiction. Personal jurisdiction is a substantial tool that is used in the US in order to determine whether a court has jurisdiction to hear a matter. Therefore, a case cannot be instituted with a defendant in a foreign jurisdiction unless an underlying relationship that would enable the defendant to anticipate a case being filed against him in that particular forum exists.  The lower courts in the US has opined that merely creating and hosting a website available to all does not confer an internet user to general jurisdiction all over the country. However, the US Supreme Court has suggested that a court can confer personal jurisdiction over a non-resident whose only source of contact with the country was the internet although the court has not evaluated the impact of technology on personal jurisdiction.

The court elucidated that the characteristics of cyberspace the infamous case of Zippo Manufacturing vs. Zippo Dot Com, Inc.1 In this case, the plaintiff had alleged the defendant on the grounds of trademark infringement since the defendant had provided online services in the name of Zippo. The defendant's website had requested users to submit address information in order to subscribe to a news service. The primary jurisdictional issue in the case was whether the court had the jurisdiction in the case since the defendant was providing online services and was not located in the US. However, the court held that the defendant had knowingly conducted business with the residents of the forum state where the headquarters of the plaintiff was located. Further, a similar judgment was passed by the California District Court in the case of Panavision International, L.P. v. Toeppen2. In this case, the defendant had set up his webpage with the sole intention of making the plaintiff purchase the same from him. The defendant was based in Illinois and had not direct or significant contact with the State of California. Therefore, the court did not have any explicit jurisdiction over him. However, the court held that it has specific jurisdiction in the matter since the actions of the defendant had affected the actions of the plaintiff even though he was physically present within the jurisdiction of the court.

However, the California District Court had a differing view in the case of McDonough vs. Fallon McElligott, Inc3 The plaintiff alleged that the defendant had infringed his copyright and violated unfair competition laws by posting the former's photographs on the internet without his consent. However, the court held that the court's jurisdiction could not be invoked solely on the fact that the residents of the state were using the defendant's website since the internet had provided for world wide access.

Status quo in Europe

The EU Regulation Number 1215 of 2012 (the Regulations) has detailed on the jurisdiction of the courts in the civil and commercial matters. The Regulations have explicitly provided the general rule that a court can assume jurisdiction based on the domicile of the defendant. However, it is strenuous to determine the domicile of a party even when a victim can identify his location. Further, it is essential to note that the domicile of a party is not determined by the IP (internet protocol) of the defendant. The IP address of a computer merely provides us information regarding the location of the computer and its user. The domicile of a defendant is determined by its principal place of business. The EC Directive on Electronic Commerce that generally deals with internet laws does not elucidate any provisions regarding the jurisdiction of a court to try a case of cyber crime. Further, the UN Convention on the use of Electronic Communications in International Contracts has defined the location of parties (domicile) as their place of business.

However, a court could also assume jurisdiction if a contract between the parties has explicitly mentioned that the particular court would have jurisdiction in case of a dispute. This exception to the general rule is usually when a software company is one of the parties and it has executed a contract or agreement for a performance of service with the other party. A party may also institute a lawsuit in the state where the tort has occurred. When a party has faced substantial damage through a cybercrime or an online attack or malfunction due to the actions of another party, the court that has jurisdiction over the place where the former party has suffered the damage could assume jurisdiction of the matter. Further, the consumer of online products and services are also provided with the right to sue the other in the member state of the domicile. This comprehends that the jurisdiction of the courts in cybercrimes in the European Union has been well defined in order to eliminate any ambiguity that may lie in its path. The transactions that take place over the internet may cross numerous political borders. Therefore, the legalities involved in a cyber crime might differ from one country to another.

Compendium

The era of boundless internet access has elevated the risks of cyber crimes and online hacking on both, individuals and multi-national corporations. It is vital for the victims of cyber attacks to have a clear apprehension of the jurisdictional issues that are involved in their disputes. Therefore, the potential for cross-border disputes and international predicaments are acute and exorbitant. The dynamic and developing electronic and communication industry might call for a more elaborate legislation since the existing laws might become unsuitable and incongruous. Hence, parties should always perceive the legislative authorities to amend the jurisdictional regimes in order to eliminate the ambiguity involved in them.

Footnotes

1 952 F. Supp. 1119

2 141 F.3d 1316 (1998)

3 40 U.S.P.Q. (2d) 1826 (S.D. Cal. 1996)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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