©2001 West Legal Studies in Business. All Rights Reserved. 1 Chapter 15: Cyberlaw and E-Commerce

©2001 West Legal Studies in Business. All Rights Reserved.1

Chapter 15:Chapter 15:Cyberlaw and E-CommerceCyberlaw and E-Commerce

Chapter 15:Chapter 15:Cyberlaw and E-CommerceCyberlaw and E-Commerce


IntroductionIntroductionIntroductionIntroduction• The internet has irrevocably altered the way

companies and consumers do business today.

• The internet has impacted the legal environment of business in three ways:– Geographic boundaries irrelevant;– De-centralized sources of information;– Instant change.


§1: §1: Courts in CyberspaceCourts in Cyberspace§1: §1: Courts in CyberspaceCourts in Cyberspace

Many Courts now have websites:– 9th Circuit U.S. Court of Appeals.– Harris County (Houston,TX) District Courts. – California State Court System.– Texas State Court System.


Jurisdiction in CyberspaceJurisdiction in CyberspaceJurisdiction in CyberspaceJurisdiction in Cyberspace Courts have jurisdiction over persons and

property in “real” space. But what about cyberspace?– Some courts exercise jurisdiction based on mere

access to a website within the state. Minnesota v. Granite Gates Resorts (1998).

– However, generally courts require some business to be transacted over the website to assume jurisdiction. Case 15.1: Zippo Manufacturing v. Zippo Dot Com (1997).


§2: §2: The ConstitutionThe Constitution§2: §2: The ConstitutionThe Constitution

• Encryption software is used to prevent theft and protect privacy.

• Government restrictions on exporting, e.g., Pretty Good Software’s encryption software have been successfully challenged as “impermissible prior restraint on speech.” Bernstein v. U.S. DOJ (1999). [The opinion was later withdrawn pending an en banc hearing.]


Web Site ContentsWeb Site ContentsWeb Site ContentsWeb Site Contents

• Communications Decency Act (1996) attempted to protect children from harmful material on the internet but parts of the CDA were struck down as unconstitutional in Reno v. American Civil Liberties Union (1997).


Web Site Contents Web Site Contents [2][2]Web Site Contents Web Site Contents [2][2]

• In 1998, Congress passed the Children’s Online Privacy Protection Act (COPPA).

• The Federal Trade Commission proposed final rules to implement COPPA, effective April, 12, 2000.


§3: §3: Cyber CrimesCyber Crimes§3: §3: Cyber CrimesCyber Crimes

• Cyber crimes occur in cyber space and raises jurisdictional questions.

• Cyber Stalkers harass others in chat rooms, email & bulletin boards.

• CyberTheft of data is criminalized by National Information Infrastructure Act of 1996. Theft of Bill Gates’ credit card information. © 2000 ZDNet.com News.


Cyber Hate CrimesCyber Hate CrimesCyber Hate CrimesCyber Hate Crimes• What about “hate” speech on the internet?

– U.S. v. Machado (1998). Former UC Irvine student was convicted under federal civil rights law in "hate e-mail" case after he plead guilty to sending email message on a university computer network to 59 Asian students, signing it "Asian Hater" warning all Asians to leave UC Irvine or he would "hunt all of you down and kill your stupid asses."


Cyber TerrorismCyber TerrorismCyber TerrorismCyber Terrorism

• Virus Attacks:– “I Love You” virus. – “Melissa” virus.

• G8 Agree to cooperate against cybercrimes• Protecting Corporate Data is top U.S. Priorit

y

• All websites this slide © 2000 ZDNet.com News.


§4: §4: Cyber TortsCyber Torts§4: §4: Cyber TortsCyber Torts

• On-Line Defamation.– Case 15.2: Blumenthal v. Drudge (1998).

• Liability for SPAM.– Case 15.3:

CompuServe v. Cyber Promotions (1997).

– America On-Line vs. IMS (1998).


§5: Virtual Property §5: Virtual Property §5: Virtual Property §5: Virtual Property

• Metatags are “key words” in the HTML code. Search engines use meta tags to find websites. – Case 15.4: Playboy Enterprises v. Welles

(1998). Plaintiff sued Terri Wells because Wells put “playmate” in her metatags at terriwells.com . Court held for Defendant.


Cybermarks: Domain NamesCybermarks: Domain NamesCybermarks: Domain NamesCybermarks: Domain Names• In Panavision v. Toeppen (1998) court ruled

that “cybersquatting” is the diminishment of “the capacity of the [plaintiff's] marks to identify and distinguish the [plaintiff's] goods and services on the Internet.”

• The U.S. Trademark Cyberpiracy Prevention Act of 1999 creates federal cause of action for on-line trademark infringement.


Cyber Trademark DilutionCyber Trademark DilutionCyber Trademark DilutionCyber Trademark Dilution

Planned Parenthood v. Bucci (1998) affirmed a lower court ruling enjoining an anti-abortion activist from using "www.plannedparenthood.com" to promote anti-abortion literature. The court found that the activist's domain name was nearly identical to the mark of Planned Parenthood, which provides abortion-related services.


Cyber PatentsCyber PatentsCyber PatentsCyber Patents

Patents are being granted for “dot com” companies and the inventiveness of their websites. – For example, note Amazon.com’s patent for

their “one click” website (Patent# 5,960,411). – Amazon.com sued barnesandnoble.com and

won. © 2000 ZDNet.com News.


Cyber CopyrightsCyber CopyrightsCyber CopyrightsCyber Copyrights

• Digital Millennium Copyright Act 1998 provides “safe harbors” for ISP’s from claims of copyright infringement.

• Case 15.5: Tasini v. NY Times (1999).


WIPOWIPOWIPOWIPO

World Intellectual Property Organization. WIPO is a fast, efficient, cost-effective resolution center for:– Domain Name Disputes.– Mediation and Arbitration Center.– Example: wwf.com vs.

worldwrestlingfederation.com.


§6: §6: E-CommerceE-Commerce§6: §6: E-CommerceE-Commerce

• E-Contracts: UETA and UCITA.– Uniform Electronic Transaction Act (UETA)

supports electronic contracts by presuming the validity of “electronic records” and “electronic signatures.”

– The Uniform Computer Transaction Act (UCITA) applies to “point and click” transactions involving computer information and transactions for goods whose “primary purpose” is the license of a computer program.


E-MarketingE-MarketingE-MarketingE-Marketing

E-Marketing.– Consumer Data and Privacy. See

FTC’s suit against Geocities.com.– Children Online Privacy Protection Act at

FTC’s site governs rules about children’s privacy.

– E-trust.com’s “seal” of approval for websites that meet strict conditions.


Law on the WebLaw on the WebLaw on the WebLaw on the Web

• Washtenaw County Trial Court in Michigan.• U.S. Patent and Trademark Office.• Most recent drafts of UCITA and UETA.• See Digital Millennium Copyright Act: Safe

Harbors from Point and Click Pirates at the University of Texas at Brownsville.

• Legal Research Exercises on the Web

Documents

©2001 West Legal Studies in Business. All Rights Reserved. 1 Chapter 15: Cyberlaw and E-Commerce