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Earvin Delgado Juris Doctor (JDCTR) - Year III

De La Salle University Conflict of Laws - Internet Cases

APPLICABILITY OF FOREIGN JURISPRUDENCE ON JURISDICTION OVER INTERNET


CASES TO THE PHILIPPINES
In a world where technology is developing at a very fast rate, as spearheaded by the growing
influence and power of the internet, there are more legal problems that arise from various transactions
and interactions in the virtual space that is the world wide web. With this global revolution looming
on the horizon, the development of the law concerning the permissible scope of personal jurisdiction
based on Internet use is in its infant stages.1 Though there is still lack of jurisprudence over such
matters in the Philippines, there has been a number of foreign ones which have shed light over said
legal situations.
One such case is that of Bensusan Restaurant Corporation v. Richard B. King, where there
was a dispute over the use of a website domain. The Court ruled that the district courts dismissal of
the case was proper because it lacked the requisite of personal jurisdiction in order to sufficiently hold
a ruling. Jurisdiction cannot be asserted over a nonresident x x x unless the nonresident commits an
act in this state x x xthe failure to perform a duty in New York is not a tortious act in this state, under
the cases, unless the defendant or his agent enters the state.2 Since the crime was not tortious in
nature, the Court deemed it improper to try the case in New York.
In another case, America Online, Inc. (AOL) v. Superior Court, AOL filed a petition for writ
of mandate, and claimed that California is an inconvenient forum as to the dispute on the companys
proprietary Internet service. There was a forum selection clause in the contract where in the state of
Virginia was designated as the proper forum where disputes should be litigated.3
The Court denied the motion for two main reasons: First, the enforcement of the contractual
forum selection and choice of law clauses would be the functional equivalent of a contractual waiver
of the consumer protections x x x prohibited under California law.4 And second, Virginia law does
not allow consumer lawsuits to be brought as class actions and the available remedies are more
limited than those afforded by California law.5 The rights of the parties will be largely diminished,
and public policy will be violated if the case will be litigated in Virginia. Hence, the Court ruled that
the forum selection clause was unenforceable.
In the case of Panavision International v. Dennis Toeppen, Panavision accused Toeppen of
being as a cyber pirate who, steals valuable trademarks and establishes domain names on the

1 Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1123 (W.D.Pa.1997), January 16, 1997
2 Bensusan Restaurant Corporation v. Richard B. King, Docket No. 96-9344, September 10, 1997
3 America Online, Inc. (AOL) v. Superior Court, 108 Cal. Rptr. 2d 699, 90 Cal. App. 4th 1, June 21, 2001
4 Ibid.
5 Ibid.
Internet using these trademarks to sell the domain names to the rightful trademark owners.6
Panavision attempted to register a website for its activities, but it failed to do so because Toeppen has
already established the domain with the use of Panavisions name and trademark.
It was noted that there was no applicable federal statute in the United States which governed
personal jurisdiction over internet cases. Instead, the Court used the effects doctrine in its ruling.
California's long-arm statute permits a court to exercise personal jurisdiction over a defendant to the
extent permitted by the Due Process Clause of the Constitution.7 In this case, personal jurisdiction
was exercised because Toeppen had purposefully, though done virtually, directed his illegal activity to
the forum state. The effect of his actions were properly felt in California. Thus personal jurisdiction
applies in this case.
In the case of Maritz, Inc. v. Cybergold, Inc., Missouri-based company Maritz alleged that
California-based company Cybergold violated Section 43(a) of the Lanham Act as to its internet
activities which involved trademark infringement and unfair competition.8 The former brought action
against the latter in its home forum in Missouri. Similar to what was held in the Panavision case,
Cybergolds activity was felt in Missouri as it caused economic injury to Maritz and its various
consumers in the state. Thus, the long-arm statute of Missouri reached Cybergold. As such, personal
jurisdiction was correctly applied over it. In a way, the effects doctrine was also used in this case.
And finally, in the case of CompuServe, Inc. v. Patterson, CompuServe, a company based in
Ohio, was a nationwide provider of electronic network and information services such as the
opportunity for its subscribers to post and sell software as shareware.9 The Shareware Registration
Agreement (SRA) provided that Ohio law governed the relationship between the company and its
clients.10 Patterson, a Texas resident, subscribed to CompuServe, and took advantage of its shareware
service by posting Internet navigation software he developed. Subsequently, CompuServe began to
market its own navigation software to which Patterson believed to be similar to the one he created.
11Hence, CompuServe filed a declaratory judgment in Ohio, seeking a declaration that it had not
infringed Patterson's trademarks. Patterson filed a motion to dismiss for lack of personal jurisdiction.12
The Court held that the forum state has properly exercised jurisdiction over the author of
software who sold his software via a Internet service provider because, Patterson purposefully
availed of the forum's laws by acting in the forum, the cause of action arises from that availment, and

6 Panavision International v. Dennis Toeppen, 9th Circuit Court of Appeals, No. 97-55467, April 17, 1998
7 Ibid.
8 Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, August 19, 1996
9Legal Information Institute, CompuServe, Inc. v. Patterson, 89 F.3d 1257, 39 U.S.P.Q.2d (BNA) 1502 (6th Cir. 1996),
available at https://www.law.cornell.edu/background/internet/CompuServe.htm (last accessed May 26, 2017)
10 Ibid.
11 Ibid.
12 Ibid.
the burden on the defendant author is less than that on the forum state's interests in determining its
laws concerning trademarks and trade names.13
In case similar scenarios happen in the Philippines, the rulings of these five cases, particularly
that of the last four are applicable in our jurisdiction - most especially if the cases and the crimes
happened within the territory of the Philippines.
Also, The Supreme Court of the Philippines, through AM No. 11-3-6-SC, or the Amendment
of Section 12, Rule 14 of the Rules of Court On Service Upon Foreign Private Juridicial Entity which
expanded the ways service of summons may be done on foreign private juridical entities that are
either not registered or have no resident agent in the country.14
Despite the possible application to the Philippine setting, there are limitations present., First,
due to the territorial nature of the Philippine criminal law15, it may be difficult to apply our rules of
personal jurisdiction and venue over internet cases which involve foreign persons and corporations as
the internet transactions and interactions happen in a virtual space. In a sense, a person can be
everywhere in the world, all at once.16
Also, judgment of the Philippine courts must be enforceable to the country of residence of the
accused, or the country where the property may be found.17
Hence, as held in it is an accepted principle in private international law that
a court may exercise personal jurisdiction over a nonresident defendant for purposes
of rendering valid and enforceable judgment against it only if there exist minimum
contacts between the defendant and the forum state. This principle aims to protect
the defendant against the burden of litigating in a distant forum even as it ensures that
states, through their courts, do not reach out beyond the limits imposed on them by
their status as co-equal sovereigns.18

Since the internet blurs spatial distance and national borders19, as well as enable more people
to interact with each other compared before, we must be able to expand from our current border and/or
territorial centric view of the application of our national law as we move to accommodate a more
globalized world.
Conflict of laws also apply in the realm of cyberspace. Even if the internet is not governed by
the political and geographical boundaries of our world, each person, corporation and/or entity will
almost always have a home forum, or State, or equivalent of such, in the real world.

13 Ibid.
14
Francis Ed Lim, Toward a more sensible long arm statute, available at http://business.inquirer.net/2502/toward-a-
more-sensible-long-arm-statute (last accessed May 26, 2017)
15 An Act Revising the Penal Code and Other Penal Laws, REVISED PENAL CODE, Act No. 3815, art. 2 (1932)
16 Betsy Rosenblatt, Principles of Jurisdiction , available at https://cyber.harvard.edu/property99/domain/Betsy.html
(last accessed May 26, 2017)
17 See note 14.
18 Ibid.
19 See note 16.