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Courts Poised to Decide Internet Borders

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If the first two weeks of 2003 are any indication, this is likely to be the busiest year yet in the law and technology field.

Two cases nicely foreshadow the major trends of the coming year — the U.S. Supreme Court on Jan. 3 declined to intervene in a copyright dispute involving questions of jurisdiction on the Internet, and a Norwegian court last week acquitted an Oslo teenager of criminal wrongdoing for creating a software program that defeated the encryption found on DVDs.

These much-anticipated cases hit all the right buttons indicating where the action will be in the coming year — Supreme Court cases, Internet jurisdiction, copyright court battles, and competing policy initiatives.

At one time, technology issues rarely made their way before a country's highest court, however today the top courts in several countries have begun to address challenging technology issues with great frequency. No later than this June, the U.S. Supreme Court will issue its decision on the legality of the Copyright Term Extension Act — referred to by many as the Mickey Mouse extension since Disney lobbied for the change to keep its prized mouse out of the public domain for an additional twenty years. The U.S. court will, as well, hear arguments in a case involving the constitutionality of the Children's Online Protection Act, the latest attempt by the U.S. Congress to regulate obscene content on the Internet.

The Canadian Supreme Court will also have its hands full with three important cases.

Fresh off decisions last year on the patentability of higher life forms, the legality of accessing U.S. direct-to-home satellite providers, and the need for a balanced approach to copyright law, the court will now face cases involving Internet jurisdiction, user rights in copyright, and online music.

The Internet jurisdiction case, which will be argued in March, involves the Earth Fund Lottery, an online lottery based in Prince Edward Island. While the lottery's supporters argue that it is based solely within the province, opponents, including many of the provincial lottery corporations, maintain that operating on the Internet is the equivalent of having a presence everywhere.

Canada's highest court will also hear arguments involving leading legal publishers and the Law Society of Upper Canada in a case that will have a significant impact on the "copyrightability" of legal materials.

It will also decide whether to take on the Tariff 22 case — an eight-year-old legal tussle that raises the prospect of creating a new tariff for music posted online.

Questions surrounding Internet jurisdiction will take centre stage in 2003.

Late last year, the Australian High Court issued a decision over whether a U.S. publisher could be sued in the Australian courts for an article that appeared on the Internet. The court ruled that Australia could indeed assert jurisdiction, setting off a firestorm of protest from U.S. publishers and the free speech community who fear a chilling effect on Internet speech.

The Australian case is part of a growing trend of courts in many countries asserting jurisdiction over disputes they believe cause harm locally, without regard for the home of the parties. The end result of this jurisdictional land grab is growing confusion over which laws apply to online activity.

While policy makers will continue their search for a solution to this dilemma in 2003, look for businesses to take matters into their own hands by increasingly "bordering" the Internet through the deployment of geographic identification technologies. Web sites will shift away from distributing content globally, instead identifying the geographic location of their users and providing content to a limited number of legally safe jurisdictions.

The recent copyright decisions in the United States and Norway are the first of many copyright cases to be in the spotlight in 2003. On Friday, a California court determined that it will hear arguments on the legality of the file swapping giant Kazaa this year. The case promises to be the most-watched online music case since the Napster saga captured everyone's attention two years ago.

In Canada, online music fans will focus on hearings before the Canadian Copyright Board, scheduled to commence next week, that will determine the tariff rate on blank media such as CDs and MP3 player hard drives. Dubbed a music tax by critics, a high tariff could result in the creation of a massive grey market for CDs, music players, and possibly even personal computers.

The Norwegian case also highlights competing technology policy decisions as prosecutors were forced to use criminal law, rather than copyright law as would have been the case in the United States, since Norway has yet to adopt new digital copyright reforms.

Canada has also refrained from adopting digital copyright reforms, though that may change this year. Nearly two years of digital copyright debate in Canada will likely come to a conclusion as Ottawa is expected to identify the Canadian approach to digital copyright law.

Canada's policy makers will be active on several additional fronts with federal officials grappling with patent reform in the wake of last year's Harvard Mouse Supreme Court decision, cybercrime legislation, and possibly anti-spam measures. At the provincial level, privacy will move to the forefront since provinces now have less than 12 months to introduce their own private-sector privacy legislation or face the prospect that the federal law will become the national law of the land.

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