FULL PRODUCT VERSION :
java version "1.7.0"
Java(TM) SE Runtime Environment (build 1.7.0-b147)
Java HotSpot(TM) 64-Bit Server VM (build 21.0-b17, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.1.7601]

A DESCRIPTION OF THE PROBLEM :
Paths.get() depends on ZipFileSystemProvider for paths inside JAR files.

Paths.get(uriWithSpaces) works in the default filesystem, but throws "java.lang.IllegalArgumentException: Illegal character in path" for ZipFileSystemProvider.

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Run testcase

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Testcase should run without throwing exceptions
ACTUAL -
Testcase throws:

Exception in thread "main" java.lang.IllegalArgumentException: Illegal character in path at index 16: file:/C:/Program Files/Internet Explorer
at com.sun.nio.zipfs.ZipFileSystemProvider.uriToPath(ZipFileSystemProvider.java:78)
at com.sun.nio.zipfs.ZipFileSystemProvider.getFileSystem(ZipFileSystemProvider.java:157)
at com.sun.nio.zipfs.ZipFileSystemProvider.getPath(ZipFileSystemProvider.java:148)
at java.nio.file.Paths.get(Paths.java:143)
at com.mycompany.mavenproject3.App.main(App.java:22)
Caused by: java.net.URISyntaxException: Illegal character in path at index 16: file:/C:/Program Files/Internet Explorer
at java.net.URI$Parser.fail(URI.java:2827)
at java.net.URI$Parser.checkChars(URI.java:3000)
at java.net.URI$Parser.parseHierarchical(URI.java:3084)
at java.net.URI$Parser.parse(URI.java:3032)
at java.net.URI.<init>(URI.java:595)
at com.sun.nio.zipfs.ZipFileSystemProvider.uriToPath(ZipFileSystemProvider.java:76)
... 4 more

REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
import java.net.MalformedURLException;
import java.net.URI;
import java.net.URISyntaxException;
import java.net.URL;
import java.nio.file.Path;
import java.nio.file.Paths;

public class App
{
    public static void main( String[] args ) throws URISyntaxException, MalformedURLException
    {
        URL url = new URL("jar:file:/C:/Program%20Files/Internet%20Explorer!/nonExistent");
        System.out.println("valid url: " + url);
        URI uri = url.toURI();
        System.out.println("valid uri: " + url);
        Path path = Paths.get(uri); // exception thrown
        System.out.println("valid path: " + path);
    }
}

---------- END SOURCE ----------