This case presents novel legal issues arising from the global nature of the internet

Judge Jeremy Fogel

It stems from a dispute over a French court ordering the California-based Yahoo to remove local access to an auction site selling Nazi memorabilia.

Yahoo was faced with fines of up to $13,000 a day under French anti-hate laws after being sued by two French civil rights groups.

It withdrew the items from all its websites since it could not prevent French users from accessing the material from other country sites.

But it also filed an appeal with a district court in San Jose, California, to consider whether French laws could be enforced in the US, arguing that they violated US free speech laws.

Landmark ruling

Judge Jeremy Fogel ruled that because the French groups had attacked Yahoo in the US, they would also be subject to counter legal measures by the internet company.

This situation is unprecedented

Ronald Katz, lawyer for French groups

"This case presents novel legal issues arising from the global nature of the internet," Judge Fogel said in his ruling.

"Many nations, including France, limit freedom of expression on the internet based upon their respective legal, cultural or political standards.

"Yet because of the global nature of the internet, virtually any public website can be accessed by end-users anywhere in the world," he added.

French reaction

The BBC's Peter Bowes in Los Angeles says that by agreeing to hear the case, the judge has set the stage for a legal showdown with broad implications for free speech on the internet.

The French groups - The International League Against Racism and Anti-Semitism (Licra) and the French Union of Jewish Students (UEJF), have appealed against Judge Fogel's decision.

"This situation is unprecedented," Ronald Katz, a lawyer representing the French groups, said.

"It cries for appellate review."