However, its boundless nature poses great challenges to the territorial-based legal regime. People begin to wonder whether traditional laws are competent enough to deal with all jurisdictional issues arising from the Internet or whether separate rules should be created for the cyberspace.

Laws are territorially determined. An act may be valid in one jurisdiction but may not be so in another. It is the power of the sovereign to adjudicate disputes within its boundary. However, for wrongs done in the cyberspace, it is difficult to identify the place of the tort and to apply the appropriate law. On the Internet, once a website is uploaded to the server; it is viewable from any part of the world through an Internet connection. An article, perfectly valid in one country, targeted at the particular group of viewers in that country, may turn out to be defamatory when it reaches viewers in another country. Is there a wrong committed? Under which jurisdiction can the wrongdoer be pursued? Which law is applicable?

These issues were addressed in the Australian case Gutnick v Dow Jones & Co Inc [2001] VSC 305. The facts of the case were pretty similar to the example listed above. Dow Jones, a publisher of business and financial new and information published an article about Mr. Gutnick in the US. The electronic version of the article was later uploaded to a server located in New Jersey and was put on web. The article could be accessed by any net users including those from Australia. Gutnick then sued Dow Jones in the Victoria State Court in Australia. The key issue was whether the Victoria court had jurisdiction over the case. Where was the defamatory article published for the purpose of defamation law?

Dow Jones argued that it was in the US that the publication occurred. There could be only one place of publication, that being either where the article was actually uploaded to the server or where it was ready for download on the website. There was no causing by Dow Jones of publication in Victoria. The mere access of the website from Victoria was not enough for court to assume jurisdiction. Finding liability based on the location of website and server was the appropriate test for determining the place of web publication, for it served the purpose of certainty that web publishers would be in a better position to assess their liability.

The court rejected all arguments raised by Dow Jones. The physical location of the website and server were held irrelevant in relation to the publication issue. Where the website and server are located may not necessarily have any real connection with the very essence of the tort. Furthermore, the domain name of a website did not always correspond with its physical location. A website ended with "au" may not necessarily be situate in Australia. The court held that uploading to the server did not constitute publication. It was well-established principle that there was no publication until the defamatory materials were heard, read, communicated or comprehended to another person. Each downloading of the article in different territories was a separate publication and separate tort subject to the local law. There was no room for the irresponsible publishers to escape liability by pleading on the new Internet technology.

The ruling was consistent with the line of authorities. However, this approach is bound to cause further problems. A worldwide web is deemed to be published in any and every jurisdiction where there is Internet access. A website publisher may be pursued under various jurisdictions for the same material published on the Internet. It will put an enormous burden on publishers to check the laws of these countries to avoid liability. It will enable a plaintiff to shop for the most advantageous forum to bring his action. Extending the long-arm jurisdiction over foreign subjects may impede the sovereignty of other countries. Above all, it will inhibit worldwide communication and the free flow of information, thus defeat the very purpose of the Internet.

It seems the courts will extend traditional laws to the cyberspace in adjudicating disputes. However, given the unique nature of the Internet, it is doubtful whether such approach will really provide satisfactory answer to the cyber problems.