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At the start of 2001, the Internet still bears some resemblance to a wild frontier. By the end of this year, sizable sections of cyberspace in all likelihood will be cordoned off behind fences. That will be the theme of the biggest stories of the coming year in cyberlaw, according to a group of lawyers in the field. Topping the list will be three expected appellate court opinions in cases in which trial courts last year issued preliminary injunctions against alleged trespassers onto patches of cyberspace. The same theme will be at the center of another type of dispute likely to blossom in 2001 as foreign governments and even some states step up efforts to block access by their citizens to Internet content they consider objectionable. The taming of the Internet will also be the subtext of another development that legal experts say will unfold this year. The denizens of the cyberfrontier will finally give up on trying to police themselves for abuses of the privacy rights of consumers. They’ll step aside and let the sheriff — in the form of the U.S. government — take over the job. APPELLATE RULINGS The single biggest story of the year, by most accounts, will be the ruling by the 9th U.S. Circuit Court of Appeals in the suit filed by record companies against Napster, a company that distributes file-sharing software. Cyberlaw experts are also eagerly awaiting another 9th Circuit ruling in a suit filed by online auctioneer eBay against an auction aggregator called Bidder’s Edge, and a ruling from the 2nd Circuit in a suit filed by the motion picture industry against digital video hacker Shawn Reimerdes. In all three cases, district court judges issued preliminary injunctions in favor of the plaintiffs. And in all three cases, the appellate courts “are going to have to decide the extent to which the Internet really is a collection of private spaces from which everyone is excluded except at the sufferance of the site owner, or the extent to which it really is an interlinking web of content,” says professor Mark Lemley, who teaches Internet law at Boalt Hall School of Law. The Napster ruling will directly affect the tens of millions of individuals who use the software to swap copies of digitized music, much of it pirated. But the impact will extend far beyond Napster itself. The ruling, which will be one of the first from an appeal court to interpret the Digital Millennium Copyright Act of 1998, “will have a dramatic effect on how we understand copyright in the virtual world,” says associate Fred von Lohmann of San Francisco’s Morrison & Foerster. Among the many issues likely to be addressed will be standards for third-party liability by people who disseminate tools used by others to violate copyrights, adds Mark Radcliffe, a partner with Gray Cary Ware & Freidenrich in Palo Alto. By bringing some clarity to that issue, the ruling could open or close forever the spigot of funding for a whole new category of so-called peer-to-peer file-sharing software that is now on the drawing board but going nowhere as long as the cloud of uncertainty hangs over Napster. By most accounts, Napster is going to lose. “Before the oral argument I was laying, like, 10-to-1 odds against Napster,” says von Lohmann. “After the oral argument, in which I think [Napster's trial counsel] David Boies did a remarkable job, I reset my odds to 4-to-1 against.” Universal City Studios Inc. v. Reimerdes, 00-0277, scheduled to be argued before the 2nd Circuit in New York in April, will also shed some appellate light on the DMCA. The case, in which the alleged hacker first posted encryption-busting software on his Web site and later posted a link to another site where the software resided, should also address open questions about third-party liability for linking. Arguably an even more important effect of the case, legal experts say, will be the momentum it has given efforts by the entertainment industry to cajole manufacturers into building copy-prevention mechanisms into their hardware. “There’s going to be a new front opened in the copyright wars and that front is going to be in the technology itself,” von Lohmann says. Boalt’s Lemley is even more worried about the possible repercussions of a 9th Circuit ruling affirming the preliminary injunction slapped on Bidder’s Edge. Ebay convinced the trial judge that its rival’s attempt to display auction listings from eBay’s Web site alongside links to similar items from other auction sites amounted to trespass to chattels. “Ebay is trying to prevent consumers from having price information that they might find valuable. But a lot of our concern is a little bit broader, and there, it does go to the extent to which the law will control the Internet,” Lemley explains. “If you adopt a trespass to chattels theory in this case, it has sweeping potential implications for the rights of search engines to index and the right to link without permission.” As Lemley put it in the amicus brief, “the court’s rationale sweeps so broadly as to endanger many of the most fundamental activities on which the Internet and electronic commerce are based.” INTERNATIONAL BOUNDARIES A similar process to block access to Internet content is under way internationally and will gain momentum in the coming year. The fence builders undoubtedly were emboldened in November when a French court ordered leading U.S. Internet portal Yahoo to block French Web users from its auction sites selling Nazi memorabilia. Yahoo’s lawyers argued during trial that it would be technically impossible to prevent Web surfers in France from viewing content on the site. Faced with a February deadline to comply with the French court’s order or start paying a fine of $13,000 a day, the company announced in early January that it would stop carrying online auctions featuring hate-related material. The Yahoo case is just one salvo in what could become a barrage of efforts to impose geographically based regulations over the Internet. Government entities from China to the state of Texas have asserted a right to shield their citizens from content ranging from opinions about the status of Taiwan to lawyer advertising. “You’d be surprised at how many countries have passed laws restricting content,” says Megan Gray, an associate with Baker & Hostetler in Los Angeles. “The France-Yahoo matter has gotten a lot of publicity because France is taking action on its laws. Now I think we’re going to see a lot more enforcement.” PRIVACY PROTECTIONS In another development that cyberlaw experts predict will come to pass this year, the grand experiment in self-regulation by Web sites attempting to protect the privacy rights of consumers will come to an end. The industry has taken steps over the past couple of years to set up private mechanisms to prevent Web sites from abusing the vast quantities of data they can collect about the identities, buying habits and personal proclivities of often-unsuspecting Web surfers. “But there have been a number of shocks to the system,” Gray Cary’s Radcliffe notes, citing in particular the Toysmart flap. The online toy store, partly owned by Disney, had promised users of the site that it wouldn’t sell any information about them to other marketers. Then Toysmart went bankrupt, and the data it had amassed about its customers proved to be one of the most valuable assets it owned. Last year, the Federal Trade Commission filed suit accusing Toysmart of deception, and several dozen state attorney generals also swung into action to prevent the company from breaching the promise it had made to its users. Disney ultimately offered to buy the customer list for $50,000 and destroy it. But Radcliffe called Disney’s offer a “face-saving” gesture that won’t relieve the pressure, which was turned up several notches by the Toysmart scandal, for governmentally imposed online privacy protections. That will come to a head this year. “I think we’re going to get some kind of federal legislation, if only because industry is now running a little scared that we’re going to get a lot of inconsistent state rules,” Radcliffe says. “It’s not that the industry is welcoming regulation. But they would rather have one regime than 50.” Congress will happily oblige. In the embittered political environment in Washington, Internet privacy is one issue on which both parties should be able to find common ground. Even if that dispute is resolved, a new electronic privacy controversy will break out, cyberlaw experts add. “We’re likely to see new developments in the whole area of wireless privacy and the collection of location information,” says David Sobel, general counsel of the Electronic Privacy Information Center in Washington, D.C. With the spread of wireless Internet applications, marketers will be able to determine not only what an individual consumer is buying, reading and thinking about. They’ll also know where that consumer is at any given time. That potentially frightening prospect is an “interesting and difficult issue that is likely to come to the forefront this year,” Sobel says. Mark Thompson is a free-lance writer based in Culver City.

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