Brief View of Jurisdiction in E Commerce and eBay Eachnet’s RuleIntroductionElectronic commerceis a booming market around world. Its fast moving and highly fluid environment brings us a wide array of innovative virtual businesses， markets and trading communities. Buyers， sellers and internet platform service provider are forming industry-specific Internet markets in such diverse fields range from daily commodities， eccentric souvenirs to real estate， automobile. Accessible from anywhere to the online virtual world in anyplace is the most prominent feature of the new business， in the mean time global jurisdiction issues arise as this business extends itself to every corner of this planet. E Commerce business has many facets in its definitions， B2B， B2C and C2C etc， there exists established conventions and solutions to guide the transaction， but the jurisdiction ambiguity in E Commerce in some degree held back the fast growing business. Jurisdiction is fundamental to the following concerns as what consumer laws， privacy laws， advertising laws， taxes issue， and export/import laws and others apply to internet-related transactions.Jurisdiction claims by courts to apply principles of their own country or the complying policies accordingly taken by an internet service platform are widely considered in terms of the nature of electronic transaction dealing with paperless proceeding in selling tangible items or intangible products across border or even intangible border. However， In many situations， due to national sovereignty in mind， most courts are claiming jurisdiction over the disputes arising from internet-related issues and applying theirs owncountries’ laws to the parties and the internet service provider， even those are located outside the geographic boundaries.Possible choice taken by the courts will subject the dispute to the laws of any country from which the Internet service platform， the website could be accessed， thus， applicable laws will be contradictory inevitably.The object of this article aims at presenting brief coverage of jurisdiction for website-related dispute in US， EU and China， particularly the problems arising out of E Commerce platform， and some relative rules in practice taken by eBay Eachnet.U.S.Traditionally， general jurisdiction and specific jurisdiction have been divided by the United States Supreme Court. A general jurisdiction might be exercised when a defendant‘s contacts with a forum are ‘systematic and continuous，‘ regardless of the connection between the cause of action and the nature of the defendant‘s contact with the forum. On the other hand， specific jurisdiction generally exists where the plaintiff‘s cause of action arises out of or relates to defendant‘s contacts with the forum. Other countries also apply similar jurisdictional provisions.Additionally， “long-arm” statutes are enacted by most states in U.S.， allowing courts to reach out and obtain jurisdiction over non-resident defendants where the defendant‘s contacts with the forum meet certain statutory defined requirements. Long-arm jurisdiction seeks to hold foreign defendants responsible for the consequences of their actions in other forums.If a defendant‘s conduct is covered by a state‘s long-arm statute then the court must determine whether the exercise of jurisdiction is in line with the due process requirements of the U.S. Constitution. The defendants must have sufficient minimum contacts with the forum to render the exercise of jurisdiction reasonably consistent with ‘traditional notions of fair play and substantial justice. The definition of “minimum contacts” varies from case to case adopted by different courts， especially in the newly booming E Commerce related disputes.Respecting the exercise of personal jurisdiction over a non-resident defendant based on Internet and Web activities， many cases have been decided by the U.S. courts. These cases， including a number of Federal Circuit appellate rulings of U.S. Circuit Courts， have applied traditional approaches to evaluating personal jurisdiction questions involving the Internet. However， different courts have reached different conclusions as to how far their jurisdiction extends in cases involving the Internet.Three categories are commonly categorized.The first category covers situations where the defendant operates business over the Internet. Courts have no trouble exercising personal jurisdiction over non-resident defendants in this category because such business is consistent with ‘systematic and continuous contacts‘ necessary for exercising general jurisdiction. This category， for example， involves the knowing and repeated transmission of computer files over the Internet or in other words， ‘persistent‘ conduct. In other words， if the insufficient contacts could be found by the court， hence the jurisdiction should be insufficient.The second category is occupied by cases where the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site. This category is the most uncertain and therefore most troublesome.The third category involves the posting of information or advertisements on the Web site that is accessible to users in foreign jurisdictions， but not enough by itself to subject non-resident defendants to personal jurisdiction. Most courts in the United States have not exercised personal jurisdiction based on the mere operation of a passive Web site or just posting information on a web site， including general advertisements unless there is interactive and integral to the business of the defendant. Interactive business could allow users to feedback with a web site and feedback back and forth， regular emails etc. This third category currently dominates most exercising of jurisdiction by the courts in U.S. after the Zippo case， which will be expatiated hereinafter. After acceptance of the Zippo case， most courts in U.S. were reluctant to grant jurisdiction solely on the basis of the number of potential customers in the forum jurisdiction who can access a passive web site or just putting information， even there exists some communicating and a small amount of other contacts with the forum.Here is an example for the foresaid principle without sufficient quality of contact. In the case of Smith v. Hobby Lobby Stores， 968 F. Supp. 1356 . The district court finally declined to exercise personal jurisdiction over a Hong Kong defendant， who advertised in a trade journal posted on the Internet without any sales of goods or services occurring in Arkansas.The case concerned the wrongful death of Mary Smith from a fire allegedly started by an artificial Christmas tree sold by Hobby Stores and manufactured by the Hong Kong defendant. Hobby Stores has its home office in Oklahoma and several stores in Arkansas. The Hong Kong defendant had no contacts to Arkansas， and dealt with Hobby Store only in Oklahoma. Hobby Stores tried to join the Hong Kong defendant into the action under a third-party complaint. Hobby Stores claimed that the Hong Kong defendant‘s Web site， accessible from Arkansas， created the sufficient minimum contacts for the court to exercise personal jurisdiction. While the Hong Kong defendant had placed an advertisement on a Web site， it conducted no business through the Web site. It did not contract to sell any goods or services to any citizens of Arkansas over the Internet site.While in those cases marked with sufficient contact held by court， the result will be opposite.In the case of Zippo Mfg Co. v. Zippo Dot Com， Inc.， 952 F. Supp. 1119 . The district court found that Zippo Dot Com had purposefully availed itself in Pennsylvania by virtue of Zippo Dot Com‘s interactive Web site and contracts with individuals and Internet service providers in Pennsylvania allowing them to download the electronic messages that formed the bases of the lawsuit. By conducting electronic commerce with Pennsylvania residents， the non-resident California Corporationwas determined to have purposefully availed itself of doing business in Pennsylvania.In the case of American Network Inc. v. Access America/Connect Atlanta， Inc.， ， the district court determined it had personal jurisdiction over the Georgia Internet service providerand denied the motion to transfer the action to a more convenient forum. America Network brought a trademark infringement action against Access America claiming that a mark used by Access America， ‘AmericaNet，‘ infringes the mark American Networks owns， ‘American Net.‘ There was assumed purposeful availment taken by the defendant in its business expansion in the New York forum as part of a nationwide market.Moreover， some decisions have been made by U.S. Appellate Courts recently regarding online jurisdiction which move forward on the definition of active and passive in the business operation category of the internet service providers.In the case of ALS Scan v. Digital Service Consultants， the U.S. Court of Appeals reversed the decision made by the Maryland District Court that it can exercise personal jurisdiction over a ISP based outside Maryland in a copyright infringement case on the sole basis that the ISP provided web hosting services to the alleged copyright infringers.The distinction between passive and active website was further clarified in this case， which is the principle adopted by the court in judging Internet related disputes.In this case， the Court moved forward on the definition of passive and active to an analysis based on whether the website was targeting or directing its activities towards the places where the jurisdiction is in question.It is concluded in this case that， a person who simply posts information on the Internet does not subject himself to jurisdiction in the forum’s location where the electronic signal is accessed and received. Three exceptions will lead to the opposite situation when the following requirements are met:directs electronic activity into the State，with the manifested intent of engaging in business or other interactions within the State， andthat activity creates， in a person within the State， a potential cause of action cognizable in the State‘s courts.Instead of case law interpreting constitutional due process in the U.S.， jurisdiction fundamentals of European countries are generally based on the statute and regulations， but the two systems share the common perspectives in the principles of jurisdiction.E.U.Brussels convention on jurisdiction and the enforcement of judgments in civil and commercial mattershas provided general and special grounds for civil jurisdiction， particular provisions for collective consumer interests for the past years. Article 13 of this convention states that consumers may bringa suit against the other party to the contact in the court of his domicile or in the court of counter-party’s domicile if it is:“1. a contract for the sale of goods on installment credit terms， or2. A contract for a loan repayable by installments， or for any other form of credit， made to finance the sale of goods， or3. Any other contract for the supply of goods or a contract for the supply of services， andin the State of the consumer‘s domicile the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising， andthe consumer took in that State the steps necessary for the conclusion of the contract.”For those do not fall into the foresaid Article 13.1 and Article13.2， the conclusion of contracts that were preceded by specific invitation addressed to consumers or by advertising” can be exercised under consumer jurisdiction.Questions arise when people try to understand some terms of this article， e.g. the meaning of “address”. If it depends on the act of the computer， accessing to a web site is done by the consumer himself， using computer to surf， to search and conclude a contract online. So through this point， the website is by no means addressing specific invitation to the consumer. But the intention of the author on this term could be like this， even user downloads email from the mail server in another country， the email should be considered as “address to him” since sending to his mail box is intend to be accessed by him.Other uncertainty also was encountered， as this convention does not firmly generate the obvious solution in the era of E Commerce， so it has been replaced by Brussels Regulation that was approved by the European Union on November 30th， 2000 and entered into force throughout Europe from March 2002. The countries covered by it are all the EU Member States except Denmark.Switzerland， Iceland and Norway apply the rules of the 1988 Lugano Convention， which is similar to the Brussels Convention. Because it opted out of the Brussels Regulation， Denmark continues to follow the rules of the Brussels Convention.Article 15 of the Brussels Regulation functionally mirrored the Article 13 of the Brussels Convention and created a new method to find the jurisdiction， it brought two major changes to the analogous rule in Article 13 of the Brussels Convention through Article 15:“ 15.2. Where a consumer enters into a contract with a party who is not domiciled in the Member State but has a branch， agency or other establishment in one of the Member States， that party shall， in disputes arising out of the operations of the branch， agency or establishment， be deemed to be domiciled in that State.”The Brussels Convention says that the consumer may bring proceedings in his own court against a trader if “in the state of the consumer’s domicile the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising”， while the Regulation says that the consumer may sue at home if the trader “pursues commercial … activities in the Member State of the consumer‘s domicile or， by any means， directs such activities to that Member State …”;The Brussels Convention says that the consumer must also have taken the steps to conclude the contract while in his home state， and the Regulation omits this requirement.These two changes reflected itself on Internet website business， for example， whether a commercial website can be considered as activities directed to consumer’s domicile， and whether the website can be regarded as branch， agency， or other establishment if the undertaking is not domiciled in the Member state.The Yahoo case of 2000 is a good example of explaining the foresaid jurisdiction principles adopted by Brussels Regulation and Convention. November 2000， A French court ruled that Yahoo， by allowing its US-based web site to be accessed from France to make auction available in France and French language banner on the web site， violated France‘s law criminalizing the exhibition or sale of racist materials. The French court ordered Yahoo to re-engineer its servers to identify French IP addresses and block their access to Nazi material. It also required Yahoo to ask users with ambiguous IP addresses to declare their nationality when they browse on Yahoo‘s home page or when they initiate a search using the word Nazi. The French court concluded that “accessibility” of French surfer is addressing a French Party， thus it is sufficient to establish the jurisdiction over the case， in which Yahoo has it server out of France.This situation is similar to the upper mentioned principles adopted by U.S. court to exercise jurisdiction， while active or interactive web site conducts business to target or direct its activities towards the places in jurisdiction. And it seems Brussels Regulation moves forward on this factor and it is interpreted by the Yahoo case. Besides accessibility of passive web site， other points shall also be considered as the “direct its activities”， such as some characteristics on the web site indicating the web site is intending to direct its business content to the consumer in such state， i.e. is to attract the consumers in order to generate the sufficient connection to the state.Rules of eBay Eachnet in practiceeBay Eachnet， the online auction platform provider in Shanghai， as the representative of the San Jose based eBay online auction company， inevitably shall comply with the laws and regulations of PRC and meanwhile be in line with the rules set globally， boasting of a global trading community of 135 million users in 32 markets around the world.After migration with the eBay global platform last September， Eachnet users can now use their eBay Chinese identity to trade globally. They can sell their products to international buyers by listing them on any of the 32 eBay market sites， they can buy their favored goods from the large electronic market either.In the meantime， many disputes arise in this global borderless transaction both internally and externally.As long as the eBay Eachnet user transacts on the eBay Eachnet platform， the user would be governed by the laws and regulations of PRC， at the same time， be bound by the User Agreementand policies of eBay Eachnet when the user registered on the site.The same is true of the eBay Eachnet itself， when it is dealing with setting up a new category or promoting a new market initiative.Principles for eBay Eachnet to defer in ChinaOn structuring online policies and handling with numerous online dispute， eBay Eachnet generally traced the guidance and general jurisdiction principles in Civil Procedure Law of China and other judicial interpretations regarding internet business， such as Interpretation on Problems Regarding Applicable Laws in Handling Copyright Disputes in Computer and Internet Environment Promulgated by Supreme Court In December 2000 and its amendment in November 2003.Albeit the Civil procedure law does not cover the principles related to jurisdiction of Internet dispute， it provides general ones as in Article 243:“Civil action over contract disputes or disputes over property rights against a defendant who does not reside within the territory of the PRC is under the jurisdiction of the court at the place where the contract is signed， or the place where the contract is carried out， or the place where the object of the litigation is located， or the place where the defendant has property that can be detained， or the place where the infringements of rights have taken place， or the place where the representative organization of the defendant is located， if the contract is signed or carried out within the territory of the PRC， or the object of litigation is within the territory of the PRC， or the defendant has property within the territory of the PRC that can be detained， or the defendant has a representative organization within the territory of the PRC. The newly amended Judicial Interpretation in 2004 is aiming at protecting copyright online with further clarifying the general jurisdiction principles adopted in Civil Procedure Law and relative rules stated in Copy Right Law.In the first article， the Judicial Interpretation establishes some stipulations for the jurisdiction on cases involving in copyright disputes. Internet copyright dispute cases are to be administered by court where an infringing act is committed or those courts where the defendant is residing.The place where an infringing act is committed includes places where the accused network server conducting the infringement and the computer terminals are installed. In case the place where an infringing act is committed or the place of the defendant is hard to be determined， the place of equipment such as the computer terminals found by the plaintiff to have infringed the copyright may be deemed as the place where an infringing is committed.”Many of the foresaid principles of jurisdiction have been undertaken by eBay Eachnet in its daily business operation. The jurisdiction principle involved business operation of eBay Eachnet could be classified into the following sectors.The first one is mostly connected to the nature of this business， a global platform， which has two edges of this market advantage， global platform allows listing items and shipping items abroad to expand the communication of transaction， bring more profits as this promised business booms， but the dispute arises inevitably due to different laws and regulations over import/export commodities and political and law system.It will place the burden on eBay Eachnet to make rules for those sellers to regulate their item listing and shipment destination， and for buyers to be clear about the effectiveness of the purchasing before the click-wrap contract is concluded online with a foreign provider.Policy BalanceTaking into the account of the internal balance of the dispute， here is an instance for this issue:The Dog shipment worldwide issueEarly 2005， eBay UK had media inquiries from a UK publication called Dogs Today – a magazine for dog lovers， who have spotted a few listings available to buyers in the UK advertising live dogs selling， in English language.These are not permitted in the UK， according to the Animal Import and Export Restriction Regulation of UK， if live animals are bought from abroad and imported into the UK， it’s likely they would be put down and killed at the border. In addition， live dog listing is prohibited according to the relative listing policy of eBay UK， while it differs in eBay Eachnet in its listing policy. The relative law of China does not prohibit the export and import of pet， only some special requirements shall be met such as being vaccinated before export and license authorized. So eBay Eachnet has different list policy regarding pet selling， “the tropical fish， snail and pet can be listed on site”， but special regulation on logistics is followed as “ the seller should guarantee that it will be safely packed and deliver to buyer by courier on the second day.”As the similar queries raised by UK， U.S. and Australia people are also upsetting that pet such as dog can be exported to UK from eBay Eachnet users.Though the user who lists dog on eBay Eachnet and makes it available to shipment worldwide， complies with the relative listing policy of the site and the law of this country， as eBay is a global platform， listed items with marking shipment worldwide would accessed by people in some countries， where this commercial activity would be found in violation of the local laws.In addition， the definition of “passive web site” or “just putting information” could hardly be applied to this case as they are categorized in the aforesaid introduction of U.S.， since the information of selling dog is put on the site in English as well as the attractive note that the shipment of the listing dog is worldwide available， thus an activity of creating necessary link to the user in his countries is conducted. Moreover， the eBay sites around the world are normally taken as one site in essence by most of the users. So， a local site is often to be taken as a branch， agency of the core site， though in perspective of legal entity， they are independent entities under respective incorporation laws under each country or area. This unified impression is intending to guide people believe that the eBay site has to do something to attract himself， if so， it cannot be taken as a passive web site but a interactive one in some ways.In order to settle down this issue and be in accordance with the other eBay sites， eBay Eachnet made a concession to alter its listing policy for its registered user， i.e.“…as live animals import are prohibited by most countries and areas， so please modify the shipment option into domestic… ”VeRO ProgramBesides the first one above mentioned-online policy balance with other eBay sites， eBay Eachnet has paid great efforts in protecting IPR on site. This is in concert with the recent trends made by China government， Interpretation by the Supreme People‘s Court and the Supreme People‘s Procuratorate on Several Issues of Concrete Application of Laws in Handling Criminal Cases of Infringing Intellectual Property， was effective as of December 22， 2004 and that Judicial Interpretation on handling copyright dispute in 2004.The outstanding feature of its efforts is the VeRO Program provided by eBay sites including eBay Eachnet， it is developed to facilitate cooperation between eBay sites and rights owners to protect their intellectual property rights， and in this VeRO Program， the shadow of jurisdiction principles is extending.Some of the several highlights of the program are removal of suspected infringing listing items reported to eBay Eachnet by intellectual property rights owners， and then cooperation with rights owners seeking personal information on alleged infringers etc. Effective report submitted by the rights owners shall meet some basic requirements such as information of business license， certificate of ownership of rights. Specific， this is in line with the principles of the Interpretation on Problems Regarding Applicable Laws in Handling Copyright Disputes in Computer and Internet Environment.In this jurisdiction， some terms covers the obligation of the Internet content provider in handling with copy right owner’s request against suspected infringing items.For example， an Internet content services provider， as they have certain editing and controlling capability over information on Internet， therefore， when they are aware of infringement happens or after the copyright owner gives warning supported by evidences， they shall have the responsibility to take measures to remove the infringing contents and to stop the dissemination of the infringing contents. For Internet content providers who violate the responsibility mentioned above， they have subjective faults， and they conducted omission infringing acts， according to the stipulations in Article 103 of the General Principles of the Civil Law， they constitute contributory infringement with the doer， and shall undertake joint and several liabilities.The request applied by the rights owner must have form essentials， and must provide three types of information based on the situation: 1. The identification certificate of the copyright owner， including ID card， legal person license， and business licenses etc. 2. Certificate of copyright for a work or works， including registration paper of relevant works， legal publications， manuscripts of writings;3. Evidence of infringement， including contents of accused infringing information， location for spread on Internet etc.VeRO Program covers not only the protection of copyrights， but also all areas in IPR. So it takes time and workforce to deal with the daily case report. It is very often that some IPR owner joined the VeRO Program of other eBay sites and reported to the local site of the infringing listing items in China， and then such report was transferred to eBay Eachnet. These situations may bring a complex to the internal responsibility of case handling system， which in some degree needs taking the principle of jurisdiction into account. Generally， the reported VeRO case shall be subject to different jurisdictions since the case may relate to different nations. However， conflicts exist between the laws of different nations and policies between different eBay sites even regarding the same trade. For instance， a trade mark rights owner shall go through the process of registering in China and get approval from the authority before he claims the protection over the registered trade mark except those world famous brands， so before the right of trade mark is legalized， the trade mark may be infringed or abused by some trade mark users in China. It will be the trade mark’s obligation to produce some evidence to eBay Eachnet to prove the register of trade mark in China and the certificate of his rights， though most of them have already registered in other countries and even as the VeRO member of other eBay sites.eBay Eachnet worked out several measures to handle those situations， which is expounded by two scenarios hereinafterThe first scenario of the VeRO case， e.g. the user registered on eBay EachNet， listing a commodity on eBay US. The seller’s activity could be deemed as use of US site. And according to the CN UA， “by accepting this User Agreement， you also agree to be bound by the User Agreement and posted terms and conditions on other eBay websites to the extent that you use website”. Therefore， the US site policy will apply to the seller and the US VeRO system immediately remove the relating information of the commodity after receipt of the report from any RO in US in terms of the US law. This method is also in accordance with the jurisdiction principles of US， i.e. purposeful availment， directive to the targeted market via an interactive web site- eBay site.The second scenario of the VeRO case， e.g. the user registered on eBay EachNet， listing a commodity on eBay EachNet with worldwide shipment， which might infringe other’s IPR or cause collision by parallel import.This kind of VeRO case under such scenario would be much more complicated. As it is stated above in the dog-selling paragraph， a balance was finally made by eBay Eachnet， considering it is a member of the whole eBay community. But from the perspective of the eBay Eachnet platform itself， the worldwide shipment option marked by user would not violate the User Agreement with eBay Eachnet.If the VeRO system of other site removes the relating information of the commodity after receipt of the report from any RO of other eBay site， there will be some legal problems under Chinese law， and it is obviously falling into the argument that mere accessibility in any place by any person may cause jurisdiction over the content of the web site.Currently， the practice taken by eBay Eachnet is to ask the RO of other eBay site to go through VeRO system of eBay Eachnet， then eBay Eachnet may take action on RO’s request. The entire process of verifying the identity of RO under Chinese law implies that eBay EachNet commits an obligation to identify the RO and furthermore can be regarded by the Court that eBay EachNet is making judgment on whether there is an infringement before taking further actions to cease the reported infringement activities， which is line with the basic principles of the terms in the said Judicial Interpretations.ConclusionE Commerce over the Internet is born to be a global model and the dispute arising in it is of crossing border either， thus the relating jurisdiction is doomed to be developed on this uncertain and rapid growing industry. More time and much attention need to be spent on studying it， regarding the competent court to decide a trial. In fact， as examples given in eBay Eachnet tests， a commerce merchant including the internet service/content provider or user could be subjected to a foreign jurisdiction around the world even if the goods of the seller haven’t been delivered to or sold to these foreign countries. The international standard Lex on E Commerce to provide certainty and uniformity is needed， while in China， new substantive laws and regulations shall be created to govern the E Commerce and meanwhile to develop the E Commerce related procedure legislation， particularly the jurisdiction matters. Both of them must be established in correspondence with the trends of international level for making the laws and regulations applicable in international practice， and to be a powerful guidance for those internet service providers in coping with business without physical boundary.