Path of the Internet Law

Highlights of Case & Statutory Development Timeline

The number of cases addressing Cyberspace / Internet related issues has been growing exponentially over the years. Rather than detail every possible case, the instructors have highlighted some of the more significant cases starting back in the 1990s.

--1990--

5/16/90 - First case that mentioned the Internet (on LEXIS^®): United States v. Robert Tappan Morris [1] for the famous Internet worm which caused hundreds of educational and military computers to crash. Morris was convicted under the 1986 Computer Fraud and Abuse Act.

1990 – One of the first convictions of a criminal hacker under the federal Computer Fraud and Abuse Act. In that case, the hackers were able to gain unauthorized access to Bell South’s 911 computer files.[2]

1990 –National Science Foundation assumed control of the system of interconnected computers which evolved into the Internet.[3]

--1991--

10/29/91 - First case where an online service provider was held not liable for a content owner's publishing of defamatory statements.[4] The court found that the provider was not a publisher but more like a conduit because it had no control over content. Although CompuServe was not providing Internet access at this time, their level of service would be similar to those provided by ISPs and portal owners, newsstands, or bookstores.

1991 – First case to hold that shrinkwrap license agreements were unenforceable under Article 2 of the Uniform Commercial Code.[5]

1991 – First conviction of computer hacker for release of computer “worms” or viruses into computer systems causing destruction of files.[6]

1991 – United States Supreme Court enforced a forum selection clause in a consumer contract even though the forum was a distance from the consumer’s residence in a non-Internet context.[7] The presumption of the enforceability of forum selection clauses is of great importance to web site agreements.

--1992--

12/31/1992 - National Science Foundation entered into a contract with Network Solutions Inc. (“NSI”) to develop domain name registration system.[8]

--1993--

12/9/93 - First case that found an online bulletin board liable for a subscriber's posting of infringing materials: Playboy Enterprises, Inc. v. Frena.[9] A subscriber uploaded copyrighted photographs to the electronic bulletin board service. The court found the bulletin board operator infringed Playboy’s copyrights and trademarks and rejected rejecting the defendant’s defense that it had no knowledge of its subscriber’s infringement.

1993 – Court upheld Secret Service’s seizure of a bulletin board operator’s computer system rejecting Privacy Protection Act claim.[10]

1993 – Court held that a copy is created for purposes of copyright infringement the moment software is loaded into a computer’s operating system.[11]

--1994--

4/12/94 - First case considering Internet access as a factor in determining jurisdiction: Pres-Kap v. Prestige Travel.[12] The court found that, in addition to other factors, access of an Internet database was insufficient to put an out of state defendant within reach of the Florida long-arm statute.

10/28/94 - First domain name / trademark controversy: MTV Networks v. Curry.[13] Ex MTV v-jay had registered and developed "www.mtv.com" independently while employed at MTV. MTV later realized the potential of the Internet and demanded ownership of the site.

12/28/94 - First Internet copyright case: United States v. LaMacchia[14] for pirating software over the Internet. The case against LaMacchia was dismissed because the court found that the criminal penalties of the wire fraud statute were inappropriate for illegally copying software.

1994- First Internet copyright infringement case in which an electronic bulletin board was found to be liable for contributory infringement under the Copyright Act for operating a bulletin board where subscribers uploaded files containing copyrighted materials without permission.[15] Sega obtained an injunction against the operator of an electronic bulletin board who encouraged subscribers to copy Sega’s games.

--1995--

6/21/1995 – First case to quash an indictment for transmitting threats of kidnapping over the Internet. Dismissal of federal criminal indictment of former University of Michigan student who sent sado-masochistic stories to one of his classmates. Court ruled that indictment must be dismissed, as defendant could not be prosecuted for interstate transmission of threats in the absence of proof that these were “true threats.”[16]

11/21/95 - First case to absolve an Internet service provider (ISP) of secondary liability for permitting infringing material to be posted on its web site. Religious Technology Center v. Netcom On-line Communication Service, Inc.[17]

1995 – Court held the Prodigy was a publisher of defamatory statements made on electronic bulletin boards because it advertised itself as a family oriented provider which monitors content.[18]

1995 – Clinton Administration proposed “Clipper Chip” with the single-key algorithm to defeat private parties from using encrypted cellular-based communications for drug deals, spying and other illegal activities. The Clipper Chip was opposed by civil libertarians that viewed the government’s role as escrow agent with suspicion.[19]

1995 – President Clinton signed the Federal Trademark Dilution Act of 1995 which addresses the blurring or tarnishment of famous trademarks by cybersquatters.[20]

--1996--

6/12/96 - First major case successfully attacking the Communications Decency Act (CDA) of 1996: ACLU v. Reno.[21] The CDA criminalized obscenity through the Internet. Section 230 of the CDA was not affected by the Supreme Court’s decision.

6/20/96 - First case where a hidden shrinkwrap software license agreement prohibited the defendant from providing an Internet interface to the software's database: ProCD, Inc. v. Zeidenberg.[22] The court enforced a shrinkwrap agreement even though the licensee had no opportunity to review the terms of the license agreement until after he has paid for the product. The court found that a customer had an opportunity to review the terms and return the product if he objected to them. This decision sets a major precedent for the use of clickwrap agreements.

6/26/96 – First United States Supreme Court decision addressing a cyberspace law issue. Court struck down the Communications Decency Act of 1996 as overly broad and vague violating the First Amendment of the U.S. Constitution.[23] The other provisions of the Com. Dec. Act of 1996, such as the Good Samaritan, is still in effect.”

10/28/96 – First case to restrain e-mail spammer from using false return addresses to CompuServe subscribers. CompuServe prevailed on the basis of common law trespass. Court rejected spammer’s argument that it had a First Amendment right to send spam. [24]

11/1/96 - First case to challenge the domain resolution dispute process and the first case to establish cybersquatting as significant contact for personal jurisdiction: Panavision Int'l, L.P. v. Toeppen.[25] The domain name registrar Network Solutions was held not liable for registering a domain name that potentially infringes on a patent. Toeppen was held liable for cybersquatting, or registering the domain name for the purpose of selling it back to a patent holder, and enjoined from further use.

11/29/96 - First case where a domain registrar provider deposited a disputed domain name in the court system for resolution: Network Solutions v. Clue Computing, Inc.[26] The court denied jurisdiction for the interpleader and returned the case for resolution between the parties.

12/20/96 – WIPO Copyright Treaty concluded at Geneva, Switzerland. The WIPO Treaty grants copyright protection to compilations of data and other databases.[27]

1996 - First case to rule that defendant’s use of a trademark similar to a plaintiff’s presents a danger of tarnishment because of unfavorable associations with the mark. The use of a domain-name combination for a sexually explicit web site diluted the plaintiff’s trademark, “Candyland,” for a children’s game.[28]

1996 – Congress enacted the Communications Decency Act of 1996 (“CDA”) which provided a safe harbor for providers. Section 230 of the CDA was designed to overrule the Prodigy case.

1996 – The Federal Trademark Dilution Act of 1995 when into effect in January of 1996.

1996 - First court to rule that an e-mail spammer did not have a First Amendment right to send unsolicited e-mail.[29]

--1997--

1/16/97 - First case allowing personal jurisdiction based on web site contracts: Zippo Mfg. Co. v. Zippo Dot Com.[30] The court found that in addition to the web site, the fact that defendant entered into service contracts with members of the forum state availed them of the protection of Pennsylvania law.

1/28/97 - First case allowing a university to restrict Internet access: Loving v. Boren.[31] The court found that the plaintiff could not show that the university blocking access to obscene Internet newsgroups injured him.

2/20/97 - First framing case: Washington Post Co v. Total News, Inc.[32] The defendant's webpage framed pages from various news sources and had advertising on the frame. The parties reached an agreement allowing linking, but not framing.

2/26/97 - First case denying personal jurisdiction for both a web site and the use of an email domain name to make business contacts to the forum state: Hearst Corp. v. Goldberger.[33] The court held that these two factors were not enough to establish personal jurisdiction over the defendant.

4/28/97 - First linking case for a link that bypassed an introductory webpage: Ticketmaster Corp. v. Microsoft Corp.[34] Microsoft created a link to the Ticketmaster site, which went directly to the ticket purchase page. This link bypassed all of Ticketmaster's advertising and introductory pages. The parties settled before the court could render a decision.

5/28/97 – Massachusetts court held that an electronically transmitted police report to the Registry of Motor Vehicles satisfied the state’s requirement for a signed writing.[35]

8/29/97 - First case mentioning metatags (machine code for search engines): Playboy v. Calvin Designer Label.[36] The defendant was enjoined from infringing upon Playboy's trademark in metatags, domain names, or web content.

12/16/97- President Clinton signed the No Electronic Theft Act of 1997(“NET”). NET broadens criminal liability for copyright infringement even where no financial gain or profit is involved. NET closed the loophole in United States v. LaMacchia[37] where the criminal indictment for wire fraud was dismissed for illegally copying because there was no proof that the defendant received financial gain or profit from the infringing acts.[38]

11/17/97 –First case to hold NSI domain name registrar not liable for direct infringement or dilution because it had not made use of the mark in its role as registrar.[39]

1997 – First appellate case extending the safe harbor provision of Section 230 of the CDA to immunize provider from liability for defamatory statements posted on its service. Court found that AOL was immunized from a defamation lawsuit for statements posted on its service. The CDA extends to bar actions for torts against providers for information posted by third parties.[40]

1997 First state attorney general to restrain fraudulent online business which solicited orders and payment but failed to send goods to customers.[41]

1996 – The State of Washington enacted the Electronic Authentication Act “to facilitate commerce by means of reliable electronic messages.”[42] This act was designed to enhance economic development and trade through the use of digital signatures.[43]

1997- The Federal Trade Commission held the first public workshop on the collection of personal information from web site visitors.[44]

1997 - First spamming case to bar defendant from using false headers or any false references to plaintiff in Spam e-mails.[45]

1997 – Utah became the first state to enact a prescriptive digital signature statute. Utah’s Digital Signature Act designates a government agency to be a certificate authority. Certificate authorities perform the role of trust third parties in Internet commercial transactions.

--1998--

2/29/98 – District of Columbia appeals court rejects Microsoft’s argument that depositions be conducted in private to protect trade secrets. Court rules that the Sherman Act requires depositions to be conducted in open court.[46]

3/25/98 - First Internet gambling payout case: Thompson v. Handa-Lopez Inc.[47] Thompson had won thousands of dollars on the defendant's Internet gambling site and sued to recover his winnings.

5/13/98 European Parliament adopts report on electronic commerce of the Committee on Economic and Monetary Affairs and Industrial Systems.[48]

5/18/98- The United States Department of Justice and several state attorneys general filed a civil antitrust case in the United States District Court for the District of Columbia charging Microsoft with various antitrust violations. The principal claim was predicated upon Microsoft’s market share for its Internet Explorer product.[49]

5/28/98 – Bavarian judge convicts former head of CompuServe of Germany of distributing child pornography for simply failing to block third party’s transmission of pornography on provider’s services.[50]

6/4/98 – Federal Trade Commission released report finding 9 out of 10 web sites collected personal information on users but only a small minority of sites gave visitors notice of personal data harvesting.[51]

7/23/98 – First case to hold that private litigants had no standing to challenge the sale of alcohol on the Internet under state licensing statute.[52]

9/14/98 - Filing date for major civil antitrust action involving the tying of an Internet product: U. S. v. Microsoft Corp.[53] The case history of the antitrust case dates back to an original antitrust action filed by the government on July 15, 1994. Judge Thomas Penfield Jackson will shortly announce whether Microsoft will be split into several mini-Microsofts. The final disposition of this case is still open at the time of this publication; however, the findings of fact indicate that Microsoft has monopoly power in their operating system and illegally tied the sale of an Internet browser to the operating system product.

9/22/98 – First court to rule that a defendant linking to a third party’s web site could not be liable for infringing material on the linked site.[54]

9/30/98 - First case denying liability for a host web site that was linked to a web site containing copyright infringing materials: Bernstein v. J.C. Penney.[55] The court found that linking to an infringing web site does not constitute infringement because the link does not copy the web site.

10/24/98 - European Directive on Privacy Protection goes into effect that requires Member Countries to impose minimum standards in the processing of personally identifiable information collected and disclosed to third parties.

10/24/98 – Sweden enacted the Swedish Data Protection Act including regulations about web site personal information. [56]

10/28/98 – Hessen became the first German Land (state) to adopt a data protection law “in line with the EU Data Protection Directive.”[57]

10/28/98 – Congress passed the Digital Millennium Copyright Act (“DMCA”) which provides providers with a safe harbor from copyright infringement. Title I of the DMC implements the 1996 copyright treaty of WIPO. DMCA amends federal copyright law to adapt to Internet-related technologies. Internet Service Providers receive a safe harbor for vicarious or contributory copyright infringement so long as they designate an agent to receive notice of copyright infringement.

11/18/98 – European Commission adopted an Electronic Commerce Directive addressing issues such as caching, electronic contracts, digital signatures and online dispute resolution.

12/15/98 – First Circuit U.S. Court of Appeals affirms district court’s denial of Microsoft’s motion to compel production of research materials compiled by two academic investigators for its defense in antitrust case. The materials requested by Microsoft were research for the book, Competing on Internet Time: Lessons from Netscape and its Battle with Microsoft.[58]

1998 – District of Columbia federal circuit court dismissed America Online from defamation lawsuit filed by White House employee. Sidney Blumenthal for statement made by political columnist Matt Drudge posted on the AOL system. Drudge had an exclusive contract to electronically publish his column on AOL.[59]

1998 – Expiration of cooperative agreement between National Science Foundation and Network Solutions Inc. (“NSI”) for domain name registration services.[60]

1998 – Children’s Online Privacy Protection Act of 1998 (“COPPA”) was enacted. COPPA requires web sites to “obtain parental consent before collecting personal information from children, and a measure criminalizing identity theft using such personal information such as credit card and Social Security numbers.”[61] COPPA requires parental consent before collecting information from children under 13.

1998 – United States Department of Commerce entered into agreement with Internet Corporation for Assigned Names and Numbers (“ICANN”) to replace NSI in administering domain name registration system.[62]

1998 – Federal Trade Commission proposed fair information practices for the Internet. The FTC requires “fair information practices, which include “consumer awareness, choice, appropriate levels of security, data integrity and consumer access to their personally identifiable data.”[63]

1998 – Seventh Circuit U.S. Court of Appeals upholds shrinkwrap software license agreement mailed inside software box mailed to customer. The court upheld an arbitration clause finding the clause enforceable by the consumer’s decision to retain the computer system beyond the 30-day period specified in the agreement. First case to find acceptance of mass-market agreement by silence.[64]

1998 – President Clinton signed the Sonny Bono Copyright Term Extension Act of 1998 (CTEA) which increases the copyright term an additional twenty years.[65]

--1999--

1/1/99 – The Euro became the official currency of the Member States of the European Union on January 1, 1999.

1/6/99 – First in rem jurisdiction lawsuit against domain names. Porsche Cars North America filed the in rem case against 130 domain names infringing or diluting the Porsche.[66]™ Court found no basis for in rem jurisdiction.[67]

3/10/99 - First case admitting liability for trademark infringement by domain name use from a non-competing business: Communications. Inc. V. West Coast Entertainment Corp.[68] The court held that consumer confusion may still ensue despite the different products and services offered.

5/99 – Ninth Circuit held that the government’s ban on the export of encryption code violated the free expression rights of an Illinois mathematics and computer science professor who developed an encryption method.[69]

5/3/99 – Release of World Intellectual Property (WIPO) Internet Domain Name Process by Francis Gurry, Assistant Director General.[70]

6/24/99 - First case denying trademark infringement against providers of Internet search engines from arranging for a certain combination of advertisements to appear on results screen when user selected words “playboy” or “playmate” as search terms. Holder failed to show provider used trademarks in interstate commerce. Neither the likelihood of confusion nor trademark dilution were proven.[71] Providers’ use of search words was protected by First Amendment and in any event protected by fair use doctrine of trademark law.

6/15/1999 – The Ninth Circuit denied an injunction, which would have prohibited the marketing of the RIO PMP 300, a handheld digital recording device.[72]

7/7/99 - Major fourth amendment case on admissibility of records seized from an Internet Service Provider: United States v. Hambrick.[73] The court held that a user may have no overt expectation of privacy for information submitted to an ISP for registering a screen name identity. The court still holds open the option of civil damages, if the ISP provides the information without being presented a valid warrant.

7/29/99 –National Conference of Commissioners on Uniform State Laws (NCCUSL) approved the Uniform Electronic Transactions Act (“UETA”) for enactment in the states.[74] UETA treats electronic records and signatures as the equivalent of paper writings and manually signed signatures. UETA provides legal infrastructure for electronic records, electronic signatures, electronic contracts, electronic filing for diverse substantive fields of law.

7/29/99-NCCUSL approved the Uniform Computer Information Transactions Act (“UCITA”) for enactment in the states.[75] UCITA governs computer information transactions including access agreements, software licenses, and countless other Internet-related contracts. UCITA validates mass-market license agreements such as “terms and conditions” or webwrap agreements.

8/18/99 - First case to recognize local toll calls to an ISP subject to reciprocal agreements for telecommunications reciprocity: Bellsouth Telcoms. Inc. v. Itc Deltacom Communs., Inc.[76] The court held that calls that terminate at a local ISP point of presence are local and not interstate.

8/23/99 –Court held that the registration of “Avery” and “Dennison” without commercial use did not violate the Federal Trademark Dilution Act of 1995.[77]

10/20/99 – Organization of Economic Cooperation and Development (“OECD”) proposed a tax treaty where a company is not liable for income tax on business profits merely because it has a web server in another country.”[78]

11/2/99 - Court refused to enforce a statute criminalizing dissemination by computer of material harmful to minors because enforcement of the statute violated the First Amendment and Commerce Clause.[79]

11/29/99 – The Anticybersquatting Consumer Protection Act of 1999 (“ACPA”) became law designed “to protect consumers and American businesses…promote the growth of online commerce, and …provide clarity in the law for trademark owners by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from the goodwill associated with such marks.”[80]

12/9/99 – The President signed the Digital Theft Deterrence and Copyright Damages Improvement Act to increase statutory damages for copyright infringement targeting software piracy.[81]

12/12/99 – The President signed the Deceptive Mail Prevention and Enforcement Act to “provide for the non-mailability of certain deceptive matter relating to sweepstakes, skill contests, and facsimile checks.[82]

1999 - E-mail message introduced as “smoking gun” in racial discrimination lawsuit. E-mail was used to show that company had knowledge of racial discrimination within the in company.[83]

1999 – President Clinton signed the Economic Espionage Act which applies to any individual who transmits, receives or possesses stolen trade secrets.[84]

1999 – Court found domain name “moviebuff.com” was owned by the trade mark user despite prior Internet registration by defendant.[85]

--2000--

1/2000-WIPO’s first international domain name dispute was initiated when the World Wrestling Federation (“WWF”) submitted a dispute over the domain name www.worldwrestlingfederation.com to WIPO in Geneva. The WIPO arbitrator ruled that the registrant acted in bad faith by offering to sell the domain name for a significant profit. The arbitrator found the domain name was confusingly similar to WWF’s trademarks and service marks.[86]

1/10/2000- First case filed to shut down web sites distributing software to copy DVD movies. The DVD industry plaintiffs argue that web sites have “pirated proprietary technology designed to copy DVD movies.” [87]

1/18/2000 –First case to rule that domain name registrar did not violate the Sherman Act.[88]

2/7/2000- First case filed on rebroadcast of television programs on the Internet without permission of the copyright holders. Canadian and U.S. television broadcasters and film companies filed intellectual property infringement lawsuits against iCraveTV, a Toronto webcaster who distributes television programs on the Internet.[89]

2/2000 – Amazon.com filed a complaint against Barnesandnoble.com alleging that its “Express Lane” method infringed Amazon.com’s “1-Click” e-commerce patent for ordering goods from web sites.[90] Court ordered Express Lane to stop using Amazon.com’s business method.

2/28/2000 – European Council adopts European Community Directive on Electronic Commerce validating digital signatures, Spam, electronic money, digital copyright protection, electronic contracting, online dispute resolution and other issues.[91] European Parliament approved single market rules for electronic commerce applying to fifteen European Union countries.

2/28/2000 – Court held that criminal defendant who violated employer’s Internet usage policy as well as criminal law had no reasonable expectation of privacy in his government office or computer.[92]

3/1/2000 – American Law Institute released the Revised draft of Article 2 on Sales of the UCC. Revised Article 2 validates electronic contracting and provides for electronic authentication and digital signatures.[93]

3/21/2000 – The Advisory Commission on Electronic Commerce to study Internet Tax Freedom Act and other Internet tax policies was scheduled to hold its final meeting.

3/22/2000 –First preliminary injunction granted under the Anticybersquatting Consumer Protection Act in federal court.[94]

3/27/2000 – Federal court granted defendant judgment against the claim that deep linking practices violated the federal copyright act. In that case, Ticket.com extracted factual data from Ticketmaster and placed it in its own form. The federal court ruled that the federal law of copyright couldn’t protect purely factual data or compilations.[95]

4/2000 – The Recording Industry Association filed suit against Napster and other MP3 programs permitting copyrighted music to be freely downloaded from the Internet.[96]

4/3/2000 - First case to rule that web site postings on electronic bulletin board were excluded as hearsay for evidentiary purposes. [97]

4/3/2000 –U.S. District Judge Thomas Penfield Jackson ruled that Microsoft violated the Sherman Antitrust Act by using its monopoly over the Windows computer operating system to bully rivals into promoting other Microsoft products, at the expense of rival companies, industry competition and consumers.[98]

4/4/2000- First case to rule that computer encryption code was protected by the First Amendment although the protection is not absolute and may be

restrained for national security interests.[99]