To Geoblock, or Not To Geoblock – Is That Still a Question? (Guest Blog Post)

by guest blogger Marketa Trimble

Should your client – an internet content provider or service provider – geoblock? Your client might geolocate – that is, it might determine an internet user’s physical location and then localize content to adjust the content to the user’s physical location. The apparent popularity of location-based services suggests that geolocation and location-based content are features that at least some users, if not the majority of users, appreciate. But your client might rather prefer not to geoblock – that is, to block access to content on the internet based on a user’s physical location. Geoblocking is unpopular with users, and it constrains your client’s business if the client’s website benefits from as much traffic as possible. The decision of whether or not to geoblock is not without significant reputational and economic consequences, yet some recent U.S. court decisions suggest that there might not be much choice about whether to geoblock.

Geobloocking must be implemented if a law requires that it be used. For example, online gambling regulations in some jurisdictions impose an obligation on providers to geoblock to comply with territorially-limited online gambling licenses. Also, a court may order a provider to geoblock (see, for example, here). Additionally, geoblocking must be implemented if there is a contractual obligation to do so; a contract, such as a copyright license, might include this obligation.

But is there an obligation to geoblock absent a law or contract that explicitly mandates geoblocking? Do rules of personal jurisdiction and the many laws that set rights and obligations on a territorial basis imply the use of geoblocking? Must one geoblock in order to limit the reach of personal jurisdiction and comply with territorially-defined laws, or can one rely on the parameters of audience and customer targeting on the internet that courts have developed, such as a website’s language version, payment currency, shipping terms, country code of its customer service phone number, and/or the website’s top-level domain?

Advancements in geolocation and geoblocking technologies and the industry’s widespread use of the technologies suggest that courts might reevaluate their approach to geoblocking. Courts have already accepted geolocation when they assess actual contacts with a jurisdiction for discovery, personal jurisdiction, and other localization purposes, but with some exceptions, courts seem to be reluctant to accept geoblocking as the means to territorially delimit conduct on the internet.

Geoblocking is certainly not perfect (nor are door locks, for that matter), and it can be circumvented (just as door locks can be), but geoblocking might now have reached a sufficient degree of reliability to play a role for legal purposes. Yet the statements of some courts evidence a continuing perception that the internet is a medium on which borders inevitably cannot be erected. For example, as recently as two months ago, in March 2017, Judge O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit remarked in Aereokiller that “an Internet-based service has no geographic boundary,” explaining that the internet’s borderlessness makes any “Internet-based service” by definition different from cable systems (see p. 17 here).

There have been recent cases that could have shed some light on the need – or perhaps the continuing lack of need – to geoblock in order to avoid personal jurisdiction and/or comply with territorially-defined laws and/or territorially-limited contracts. Aereo could have addressed this issue in the copyright context but did not: Aereo insisted vigorously that it offered its service only to users within the territorial footprint of the terrestrial broadcast that Aereo transmitted on the internet (Aereo’s acts being transmissions under the Copyright Act according to the U.S. Supreme Court here).

Spanski Enterprises seemed to offer an opportunity to clarify whether geoblocking is required to avoid copyright infringement in a country for which an alleged infringer has no license. In Spanski, the alleged infringer was the copyright owner itself that had no rights to publicly perform its content in the United States because it had granted an exclusive license for its work in the United States to the plaintiff. A settlement agreement from earlier litigation between the parties required that the copyright owner geoblock, and in this later case Spanski argued that the copyright owner had not fulfilled its geoblocking obligation.

In the December 2016 memorandum opinion in Spanski, Judge Chutkan of the U.S. District Court for the District of Columbia did not say (understandably so, given the facts of the case) whether or not, absent a contractual obligation to geoblock, sufficient geoblocking would have been required to comply with the territorial limitations of the rights. The judge held only that the defendant copyright owner had infringed copyright because its content was viewed on its website in the United States, and the defendant’s insufficient geoblocking (of which the defendant had knowledge) played a role only in the finding of the defendant’s willfulness.

Notwithstanding the judge’s disclaimer in Spanski that the finding of infringement was not “due to a failure of [the infringer’s] geoblocking system” (that failure went only to the finding of willfulness), the disclaimer did not mean that geoblocking was irrelevant to the finding of copyright infringement, a finding that was based on the actual viewing of the copyrighted content in the United States, which viewing could have been avoided through functional geoblocking. Therefore, in general, regardless of how “non-directed” a website might be toward a particular jurisdiction, geoblocking seems to be necessary to prevent the viewing of a website in a jurisdiction – which viewing might result in a finding of copyright infringement in the jurisdiction.

For someone who is outside of the United States, however, geoblocking might not be necessary to avoid subjecting oneself to personal jurisdiction in a court in the United States. In the recent case Triple Up, another judge of the U.S. District Court for the District of Columbia addressed a “most novel argument” that the alleged infringer’s lack of geoblocking should have been interpreted as purposeful acts directed at the United States. Judge Moss refused to accept this argument, noting that “[t]o hold otherwise would invite a sea change in the law of internet personal jurisdiction.” While the judge acknowledged that “a website’s affirmative geoblocking efforts should weigh against the exercise of personal jurisdiction,” the judge declined to “equate[…] a failure to geoblock with purposeful availment.”

What do these cases mean for your client? These are district court cases that address new legal issues; the cases raise more questions than the decisions do to solve existing issues. Given the uncertainty of what other courts might hold, geoblocking appears to be a wise preventive measure to attempt to avoid personal jurisdiction in an unwanted jurisdiction and the infringement of the laws of that jurisdiction. But the interests of business continue to run up against geoblocking. In a world painted by Spanski and Triple Up, your client outside the United States who does not geoblock users connecting to the internet from the United States, and does not engage in any other acts that would suggest a direction of his website activities at the United States, will not be subject to the jurisdiction of a U.S. court. However, actual viewing of content on the client’s website by users in the United States may result in the infringement of copyright in the United States, and such acts of viewing may lead to your client subjecting himself to personal jurisdiction of a court in the United States.

If the conclusion about the above hypothetical is correct, it means that there no longer may be a question of whether to geoblock. With the added complexity and lack of certainty of what courts in other countries might do, geoblocking seems like the only safe practice to avoid personal jurisdiction. At some point the cost of geoblocking will be low enough to pose no significant barrier to entry, yet an increased use of geoblocking will likely remain unpopular with all who want the internet to remain borderless. Popular displeasure with geoblocking might lead to greater pressure on legislatures to address geoblocking comprehensively and minimize it as much as possible. In the European Union, the European Commission’s 2015 and 2016 proposals are the first attempts to address the issue; although perhaps insufficient in their eventual impact, the proposals are the first steps (see here and here, and my recent article here; see also an Australian government committee report from 2016 here urging its government to “clarif[y] the law on geoblocking,” and my 2012 call to address geoblocking and its circumvention here).