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cyberlaw informer #46


Welcome to the 46th issue of the weekly Mishpat Cyberlaw Informer - 

Law on the net newsletter from http://mishpat.net



This newsletter is sent only to subscribers. If you no longer 

wish to receive the Cyberlaw Informer, follow the unsubscribe 

instructions at the bottom of this newsletter.



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In this issue:



1. Introduction

2. Cyberlaw informer - 1 year old

3. Amazon's patent go too far

4. Cyberlaw resource of the week

5. Computer & Internet law news and updates





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################

1. Introduction

################



I would like to welcome the many new subscribers who joined the

Cyberlaw Informer this week. 



This issues marks one year since the first issue of this newsletter

was sent out. Further details in the next section.



This week's feature article looks at recent reactions to two patents

granted to Amazon.com, the largest online retailer. The patents, that

many IT experts claim should not have been granted, raised a wave of

protest including a call to boycott Amazon. Our article will analyze

the complaints against the validity of Amazon's patents, and Amazon's

response to those complaints.

As usual you will find the cyberlaw news and the weekly resource at

the end of this newsletter. 



I hope you enjoy reading the newsletter. Comments, tips, and articles

are always welcome. Send them to mailto:editor@mishpat.net



The Mishpat Cyberlaw Informer Archive (issues 1-45) is located at:

http://mishpat.net/cyberlaw/archive



Feel free to use any of the material, or forward the newsletter to a

friend. Just don't forget to mention that they can subscribe to the

Cyberlaw Informer by visiting http://CyberlawInformer.com





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#############################

2. Cyberlaw informer - 1 year old

#############################



This issue marks one year since the first issue of the Cyberlaw

Informer (then called The Mishpat Update) in March 1999.



During this year I sent out 46 issues, plus one special edition

covering the ruling in the Microsoft antitrust case. Printing all back

issues will create a book with more than 600 pages!



The first issue was sent out to only 146 subscribers, this issue is

sent out to just over 1,460 readers, an increase of 1000%. 

A major part in the growth of the subscriber base in due to the word

of the mouth (or mouse in the case of electronic publishing). That

means that several hundred subscribers were referred by your

recommendations. I appreciate all the help and tips I received from

you over the year, and hope you continue recommending this newsletter

to other friends. While I don't believe the subscriber base will grow

by another 1000% this year, I would like to reach 3,000 readers within

a year.



You can help reaching that goal by asking your friends to subscribe by

visiting http://CyberlawInformer.com

As you might notice, the newsletter subscription page has moved to a

new address, based on its name. The archives are still located at

http://mishpat.net/cyberlaw/archive

This is the first of several changes planned for Mishpat.Net, I hope

to announce the next change in the next issue.



As some of you may know, I started this newsletter a few weeks after

Dvir, my first son, was born. Dvir is now a year old, and so is this

newsletter. This has truly been a great year in both my private and

professional life, and I hope the next year will be at least as good.

Finally I want to thank my wonderful wife Dafna. Without her support

and assistance non of this would have happened.



I want to end this part by thanking you for reading, and wishing you

happiness and success wherever you are, in any of more than 50

countries in which the Cyberlaw Informer is read.

I always enjoy reading your feedback. Comments, suggestion and content

contribution are welcome at mailto:editor@mishpat.net



Thanks,

Didi Melchior







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###########################

3. Amazon's Patents Go Too Far

###########################



The latest patent policy dispute is over two patents the U.S. Patent

and Trademark Office granted Amazon.com. 



One patent covers 'one-click' ordering, and has already led to an

injunction against Amazon's rival barnesandnoble.com. Amazon has

obtained a US patent #5,960,411 for one-click purchasing. The idea is

simple: when you order a certain item, your browser can carry along

information about your identity. This is done by sending a 'cookie',

which a kind of ID code that your browser received previously from the

same server. That way customers do not need to re-enter personal

details (such as name, address and card number) with every order.



The second patent covers running associate programs (also known as

affiliate programs) on the Internet, and has led to a big backlash

against Amazon, including a call for a boycott of Amazon. U.S. Patent

#6,029,141 covers "Internet-based customer referral system" that

enables individuals and other business entities ("associates") to

market products, in return for a commission, that are sold from a

merchant's Web site.





* What are associate programs *

Describing associate programs can easily be done using the description

in Amazon's patent:

"An Internet-based referral system that enables individuals and other

business entities ("associates") to market products, in return for a

commission, that are sold from a merchant's Web site.

The system includes automated registration software that runs on the

merchant's Web site to allow entities to register as associates.

Following registration, the associate sets up a Web site (or other

information dissemination system) to distribute hypertextual catalog

documents that includes marketing information (product reviews,

recommendations, etc.) about selected products of the merchant. In

association with each such product, the catalog document includes a

hypertextual "referral link" that allows a user ("customer") to link

to the merchant's site and purchase the product. When a customer

selects a referral link, the customer's computer transmits unique Ids

of the selected product and of the associate to the merchant's site,

allowing the merchant to identify the product and the referring

associate. If the customer subsequently purchases the product from the

merchant's site, a commission is automatically credited to an account

of the referring associate. "



The benefit for both the merchant and the associate are obvious, and

that is why thousands of merchants adopted this model. The merchant

doesn't pay for advertising unless it is effective - he only pays a

commission (usually 5%-25%) when a sale occurs. Amazon, which runs the

largest associate program with more than 470,000 associates, only pays

the associates if they succeed in referring customers. Unlike

traditional advertising which is based on impressions (ad views),

associate programs are based on actions taken by customers.

Associates gain an opportunity to sell products online, without the

investment needed in setting up and maintaining a full scale

e-commerce site.





* Tim Oreilly's letter * 

On February 28, Tim Oreilly, owner of the popular technical computer

books publisher Oreilly's, wrote an open letter to Jeff Bezos, founder

and CEO of Amazon.



Oreilly wrote: 

"We are writing to request that Amazon stop all attempts to enforce

the patent that it has been granted on "one click ordering" (Patent

number 5,960,411). It is our belief that this patent was granted

without adequate review of prior art, and further, that even were it

ultimately found valid, such broad patents serve only to hold back

further innovation. One-Click ordering is a clever marketing slogan.

However, your patent fails to meet even the most rudimentary tests for

novelty and non-obviousness to an expert in the field. The fundamental

technology on which Amazon's one-click implementation is based is the

use of "cookies", a small amount of data placed on client computers to

add state and session management capabilities to the World Wide Web,

which was introduced in 1994 into Netscape Navigator . The technique

had been deployed on thousands of sites well in advance of your 1997

patent application. "

"We believe that the rapid innovation on the World Wide Web and

Internet platform that has created so much new value for the public

(as well as for Amazon and its shareholders) will be choked off if

companies take the short-sighted route of filing patents on commonly

accepted and obvious techniques in an attempt to keep competitors from

using them."





* Internet community reaction *

Several sites popped up over the last month, calling to boycott

Amazon. While many Internet users and entrepreneurs hope that courts

will find that these patents are legally invalid, some decided not to

wait passively, and refuse to do business with Amazon until they

promise to stop using the patents to threaten or restrict other web

sites. 



Some web publishers found a simple way to protest against Amazon's

affiliate patent. Modification to Amazon's URLs alters who receives

the online bookseller's affiliate referral fee (the URL, or web

address, carries the referring affiliate's ID). This enables visitors

to channel commissions to worthy causes that are part of the affiliate

program. 





* Jeff Bezos' response *

The public criticism led Jeff Bezos, after several conversations with

Tim O'Reilly, to issue an open letter about the issue including a call

for patent law reform.



Bezos denied the request to give up the patents unilaterally.

However, Bezos noted that unlike with trademark law, where you must

continuously enforce your trademark or risk losing it, patent law

allows you to enforce a patent on a case-by-case basis, only when

there are important business reasons for doing so. 



Bezos called for the following changes in patent law:

* Patent laws should recognize that business method and software

patents are fundamentally different than other kinds of patents.

Business methods and software patents should have a much shorter

lifespan, 3 to 5 years, since there is no need for a long physical

processes of building factories. In the Internet age a good software

innovation can "catch a lot of wind" in 3 or 5 years. 

* For business method and software patents there be a short public

comment period before the patent number is issued. This would give the

Internet community the opportunity to provide prior art references to

the patent examiners.



Bezos believes that such a system will lead to fewer patents (fewer

people will bother to apply for 3 or 5 year patents), that also means

less work for the overworked patent examiners and better examination

of patents. The system will also generate fewer bad patents, thanks to

the pre-issuance comment period, and even the good patents won't last

longer than is necessary to give the innovator a reasonable return (at

Internet speed, you don't need 17 years). 





* A few comments *

While Bezos double statement (enforcing patent only when there is an

important business reason and the call for patent reform) might be a

step in the right direction, there are several problems wit both

suggestion.



Under the current circumstances, 3 year patents will be meaningless.

Amazon's affiliate patent was filed in June 1997 and Granted in

February 2000, more than two and a half years later. This leaves very

short time, if at all, for the patent holder to take advantage of his

patent.



Bezos argued that Barnes & Noble had a chance to present prior art in

court, before the judge granted a preliminary injunction. Bezos noted

(correctly) that small inventions can often seem extremely obvious in

retrospect. 

However, 1-click ordering is simply an implementation of HTTP cookies

introduced by Netscape in 1994. It is fair to assume that even if

Amazon hadn't introduced 1-click ordering (and it isn't sure that they

were first), someone else would have done so. Patents are meant to

promote the common welfare. The underlying assumption of patent law is

that certain ideas won't be developed without a special degree of

protection. It seems that 1-Click ordering is not one of these ideas. 



Amazon's 1-Click patent isn't a major problem to Barnes & Noble. All

B&N had to do is add a second click for the user to confirm the order.

This means that while this patent isn't going to stop Amazon's

competitors, it does harm the software industry by forcing it to adopt

non-efficient programming solutions.



Bezos claims that Amazon started patenting because they realized that

they would be under attack by players who might be able to put them

out of business, exactly the way Netscape, which was a market leader

and innovator, was acquired by AOL. Even though Amazon is the largest

online retailer, WalMart is 70 times the size of Amazon. According to

Bezos, the patents are needed to protect Amazon's position as market

leader.

However, the Internet's incredibly fast development is at least in

part thanks to innovation by independent developers who've learned by

looking at what others were doing, imitating it and then moving ahead

with new innovation as part of the Open-Source community. Amazon's

patents threaten these efforts, because these developers fear that

Amazon might sue them. 

Bezos claims that Amazon isn't going after those developers and the

many sites using 1-Click technology or affiliate programs. Bezos is

only going after "the big guys" who are going after Amazon.

The problem is that deciding which cases to pursue in the case-by-case

policy, is at Amazon's discretion. Whenever it believes another online

retailer threatens its position, or whenever Amazon decides to enter a

new market, it can pull out the patent weapon and threaten whoever is

in its way.





The full associate patent from IBM patent center:

http://www.patents.ibm.com/details?pn=US06029141__



Tim Oreilly's open letter:

http://www.oreilly.com/cgi-bin/amazon_patent.comments.pl



Boycott Amazon sites

http://www.NoWebPatents.org/

http://www.gnu.org/philosophy/amazon.html



Jeff Bezos public response

http://www.amazon.com/exec/obidos/subst/misc/patents.html/102-5783126-3429612



Disclosure: Mishpat.Net is an Amazon affiliate.





#######################

5. Resource of the week

#######################



This week's resource is The International Commission on Holocaust Era

Insurance Claims (ICHEIC) at http://www.icheic.org



ICHEIC is charged with establishing a just process that will

expeditiously address the issue of unpaid insurance policies issued to

victims of the Holocaust.

Claims forms for Holocaust survivors and their heirs and

beneficiaries. can be downloaded in 23 different languages.



I want to thank Susan Freiman for suggesting this resource.



If you would like to recommend an Internet legal resource, please send

the details to mailto:editor@mishpat.net Full credit is given to

contributors.

You can also recommend resources at the online bulletin board

http://mishpat.net/cgi-bin/bbs/UltraBoard.pl





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#############################

5. Cyberlaw news and updates

#############################



Each week Mishpat Cyberlaw Informer brings you the latest news about

online and computer law, with links to the full reports available

on the web.





Top news

========



* Cyber Patrol wins reverse engineering injunction * 

U.S. District Judge Edward F. Harrington ordered a halt to the

distribution of a computer program called 'cphack' that allows

children to bypass filtering software designed to keep them away from

Internet pornography. Microsystems Software Inc., which sells the

widely used 'Cyber Patrol' filtering software, sued two computer

experts who distributed the bypassing software via the Internet. 



Judge Harrington ordered Matthew Skala, a Canadian student, and Eddy

L.O. Jansson, believed to be living in Sweden, to stop spreading

cphack. The judge also blocked distribution of the program by anyone

working with them.

Skala and Jansson offered the small cphack utility for 'people

oppressed by Cyber Patrol'. When cphack runs on a parent's computer,

it reveals the password that blocks questionable sites, and also

discloses the product's entire list of more than 100,000 Internet

sites deemed unsuitable for children.

In its filings, Microsystems said it suffered 'irreparable harm' from

the publication of the bypassing software, which will destroy the

market for its product, and may bypass parents' efforts to screen out

inappropriate materials on the Internet. Microsystems alleged that

Skala and Jansson violated U.S. copyright law when they

reverse-engineered Cyber Patrol to analyze it, which the company said

is expressly prohibited in its license agreements.



Free speech advocates criticized Microsystems' move to block

distribution of the software.

Free speech and reverse engineering aren't the only issues at stake.

Jurisdiction (defendants are not American), due process (defendants

where not served with court documents) and effectiveness (It is

impossible to get a court order against anyone who already downloaded

the program and wants to pass it on), are all important issues in this

case.

Full reports and court documents are available at:

http://www.politechbot.com/cyberpatrol/





* EU, U.S. reach privacy accord *

As reported in the previous issue, European and U.S. negotiators have

reached an agreement on data privacy that ends a Trans-Atlantic

dispute over data protection. At issue is an EU directive to ensure

the free flow of data across the 15 member states by establishing a

high standard of data privacy. The directive stipulated that data

could be sent outside the EU only to those countries that have an

adequate level of protection. 

After more than two years of talks, negotiators announced that the

U.S.'s largely self-regulatory system based on "safe harbor"

principles represents "adequate protection" as defined and required by

the rules of the EU on the transfer of personal data outside the EU.

The agreement, which still must be approved by the EU member states

and the European Parliament, doesn't include financial services.

Under safe harbor principles, a U.S. company can only transfer or sell

personal data to another company with the explicit agreement of the

subject of the data. The safe harbor principles also allow EU citizens

reasonable access to their personal data to review and possibly

correct it. Companies wishing to adhere to the principles will sign up

with the U.S. Department of Commerce and be placed in a database

available to the public over the Internet. The safe harbor principles

also mandate that the U.S. Federal Trade Commission (FTC) expedite

complaints by EU citizens about the handling of their data in the

United States.

http://www.computerworld.com/home/print.nsf/CWFlash/000315C966





* Class action suit against CompuServe-AOL *

Two Florida lawyers filed a nationwide class action for proposed class

representatives Michael and Melissa Stone, against a subsidiary of

America Online (AOL), on behalf of all persons who joined the

CompuServe ISP in expectation of a significant and timely rebate and

either have not received their promised rebates or received their

rebates only after substantial delays and difficulties and without any

reimbursement. Immediately following the class action law suit, the 

Economic Crime Section of the Florida Attorney General's Office opened

an investigation for "Excessive Delay in Payment of Rebates" by

CompuServe. 

Full details of the law suit, including the official Court filings can

be found at:

http://www.web-access.net/~cscact

I want to thank plaintiff's lawyer, Byron G. Petersen, for sending me

the information.









Intellectual Property

===============



* A scanned photograph is still a photograph *

Jeffrey Hunter Mendler had agreed to take photos of the 1991 America's

Cup yacht race for Winterland Productions Ltd. The contract allowed

Winterland to use Mendler's photograph as "guides, models and

examples" to create sailing illustrations for its T-shirts. In 1995,

the company put out a line of T-shirts illustrated with digitally

altered photographs taken by Mendler. Mendler argued that the scanned

and altered images were photographs and thus violated the contract he

had with Winterland. Winterland claimed that the images were

illustrations akin to drawings because it had significantly altered

Mendler's photographs.

The 9th U.S. Circuit Court of Appeals ordered Winterland to pay

damages to Mendler for violating terms of the contract. Judge Alex

Kozinski, writing for the majority, said photographs are routinely

altered on computers before publication but are still called

photographs.

http://www.lawnewsnetwork.com/stories/A18750-2000Mar15.html





* Apple settles iMac knockoff lawsuit *

Apple and the computer makers involved in the iMac knockoff dispute

said they have settled the lawsuits. Apple Computer filed a suit

against Daewoo and Emachines last year alleging that the companies

released computers that copied the look of the popular colorful and

curvy iMac computer. Full terms of the settlements were not disclosed.

The settlement came after the court sided with Apple and granted

preliminary injunctions against the knockoffs.

http://www.wired.com/news/politics/0,1283,34821,00.html





* Nortel sues Optical Networks *

Nortel Networks, the giant Canadian builder of optical networking, is

suing rival Optical Networks for allegedly stealing trade secrets and

infringing Nortel patents. The action follows an injunction obtained

by Nortel late last year preventing several former employees who

defected to Optical Networks, which is partly held by Nortel

competitor Cisco, from recruiting other Nortel employees and from

using trade secrets. 

http://www.newsbytes.com/pubNews/00/145496.html







Domain names

===========



* Domain name dispute resolution firm caught in conflict of interest *

A Montreal firm that is an independent arbiter of Internet domain name

disputes may be in a conflict of interest that could threaten its

current activities. eResolution Inc. is seeking to gain control of the

domain name eresolutions.com from Ravi Lohti, a domain-name speculator

from California. 

The Internet Corporation for Assigned Names and Numbers (ICANN) has

approved three dispute-resolution service providers: The World

Intellectual Property Organization (WIPO); the National Arbitration

Forum of Minneapolis; and eResolution Inc. eResolution Inc. filed a

complaint with WIPO against Lohti, seeking an order that he transfer

control of eresolutions.com to eResolution Inc. Meanwhile, Lohti is

awaiting judgment in another domain dispute in which eResolution is

the dispute-resolution provider. Infogear Technology filed a complaint

through eResolution against Lohti over the rights to the domain name

iphones.com. 

eResolution claims that there is no conflict of interest since it not

the arbitrator, but merly the case manager. Under the dispute

resolution policy the adjudication is done by an independent

arbitrator chosen at random from a pool of qualified arbitrators. 

http://www.nationalpost.com/financialpost.asp?f=000309/227251





* Dell sues 23 corporations and individuals over domain names *

Dell Computer Corp. is suing 23 companies and individuals for

registering domain names that use the "Dell" trademark including

Dellbackup.com, Dellsolutions.com and Dellparts.com. Fifteen

defendants are in the United States, two are in Taiwan, two in Korea,

one in Canada, one in China, one in the United Kingdom and one in

Chile. 

http://www.amcity.com/austin/stories/2000/03/06/story5.html





* BBC stops cybersquatter *

The BBC has managed to stop an attempt by an alleged cybersquatter to

auction the domain bbc1.com and bbc2.com. The BBC won a High Court

injunction preventing Stephen Taylor from selling the two domain names

to the highest bidder. The BBC also issued a claim against Taylor for

the transfer of the names to the BBC. Last year the BBC spent a

considerable sum buying the address bbc.com from Boston Business

Computing.

Reported by the BBC .

http://news.bbc.co.uk/hi/english/uk/newsid_665000/665530.stm





* Teen Magazine files second cybersquatting lawsuit * 

After winning its lawsuit against a porn site that used the domain

name Teenmagazine.com, Teen Magazine publisher has filed suit against

a student for registering teenmagazine.net and offering to sell it to

the publisher for $5,000. The complaint requests injunctive relief,

and damages of not less than $100,000 for willful infringement. The

student admitted to "accidental wrongdoing" and agreed to hand over

the name.

http://www.lawnewsnetwork.com/practice/techlaw/news/A17967-2000Mar6.html









Cyber crime

=========



* Teenagers made counterfeit money on their PC * 

Police in North Carolina has arrested four teenagers for making

counterfeit money using home computers. The High School students fell

under suspicion when a counterfeit $10 bill was passed at the school

cafeteria. The students allegedly made the fake bills using home

computers and ink-jet printers.

http://www.zdnet.com/zdtv/cybercrime/internetfraud/story/0,9955,2114954,00.html





* 'Coolio' charged with LAPD hack *

A 17-year-old computer hacker questioned by FBI agents about

February's denial of service (DoS) attacks on big Internet sites such

as Yahoo! and Amazon.com, was charged with defacing a police site.

Dennis Moran, a high school dropout, is charged with hacking a Los

Angeles Police Department anti-drug Web site in November. He allegedly

used the Internet name "Coolio" and defaced the site with pro-drug

slogans and images. He isn't charged with broader claims he made in an

Internet chat room, claiming responsibility for the DoS attacks.

http://news.cnet.com/news/0-1005-200-1567958.html





* Couple accused of using stolen credit card numbers online *

The Italian Tax police arrested an Italian man and his Israeli wife,

accusing them of using thousands of American credit card numbers they

allegedly got from computer hackers, to place $750,000 worth of online

lottery bets. The couple won about $400,000 from the betting. The

couple also went on an online buying spree.

http://www.mercurycenter.com/svtech/news/breaking/ap/docs/280801l.htm





* German authorities seize 2.5 tons of pirated software *

Airport customs officials in Frankfurt said they had confiscated 2.5

tons of pirate software for Sony video game consoles in their biggest

haul of forged software yet. The airport's customs authority said it

had seized 11 crates of CD-ROMS worth almost $5.2 million on a flight

from Thailand. The crates contained 116,283 fake PlayStation games. 

http://news.cnet.com/news/0-1006-200-1570527.html





* Hacker goes to jail *

Judge Irma Gonzalez sentenced computer hacker Jonathan Bosanac, known

online as 'the Gatsby', to 18 months in prison for electronically

breaking into some of the largest computer systems such as AT&T,

Sprint and MCI. Bosanac was also ordered to pay $10,000 in restitution

to three telephone companies.

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/074431.htm





* Old security hole used to steal credit card data *

A computer hacker has stolen credit card data from several sites,

including SalesGate.com , and posted the details on the Internet. The

hacker posted approximately 6,000 numbers and claimed to have more

than 23,000. The Web site, paid for with a stolen credit card, was

shut down. The hacker exploited a 2-year-old security hole in

Microsoft's Internet Information Server (IIS) software. A patch for

that hole has been available for 18 months. But webmasters at small

companies say they don't have the resources to keep up with all of the

patches needed to keep hackers out.

http://www.computerworld.com/home/print.nsf/CWFlash/000310F582





* Hacker attack shuts down Brazilian government site *

A Brazilian government site was brought down on March 15 by unknown

hackers. The hackers used hacker programs to take control of

third-party computer systems to generate massive volumes of calls to

the agency's site. 

http://www.newsbytes.com/pubNews/00/145847.html





* NASA blocks Brazilian visitors *

NASA's Jet Propulsion Laboratory says it's blocking Brazilian access

to its Web servers due to a wave of computer attacks from different

locations in Brazil. The Jet Propulsion Laboratories, one of the

Internet's most popular sites, featuring extensive resources on

robotic space exploration and images of other worlds. 

http://www.zdnet.com/zdnn/stories/news/0,4586,2468538,00.html





* Frustrated worker attacks employers' computer system * 

Abdelkader Smires, 31, who worked for Internet Trading Technologies,

has been arrested on charges of using codes to disable computers in a

three day online attack on the company. Smires is reported to have

been angry at his employers for failing to financially appreciate his

work. Smires turned down a possible $70,000 raise, $50,000 in stock

options and a one year contract, just before the cyber-attacks

started. 

http://www.newsbytes.com/pubNews/00/145762.html





* 485,000 credit card thief tracked down *

Law enforcement officials said they've tracked down a hacker who they

allege stole more than 485,000 credit-card numbers and saved them on a

U.S. government agency's site. A Web administrator at the agency's

site noticed a large portion of memory had been taken up for no

apparent reason and discovered the stolen credit-card numbers soon

after they were loaded onto the site. 

http://www.zdnet.com/zdnn/stories/news/0,4586,2469820,00.html





* U.K. hacker arrested *

A man has been released on police bail after being arrested in

connection with the hack attacks that paralyzed the sites of Lloyds of

London and Railtrack at the beginning of the year. 

http://www.theregister.co.uk/000308-000020.html





* Chinese e-commerce site closed by hacker attack *

IT163.com, a Chinese e-commerce web site selling goods from 50 top

domestic stores, has been shut down by a hacker attack. The Web site

was bombarded with so many messages at the same time

that the system could not cope.

http://www.mercurycenter.com/svtech/news/breaking/internet/docs/305947l.htm





* More than 500 hacker attacks on Canadian government *

Hackers attacked some of Canada's most sensitive military and

government computer systems 531 times in two months last year. None of

the attacks appears to have been successful. A new study found that a

typical government Internet site is subject to 10 or more threat

incidents per week. 

http://www.globetechnology.com/archive/gam/News/20000315/UHACKN.html









Privacy and Consumer protection

========================



* Court rules Washington's anti-spamming law unconstitutional *

Judge Palmer Robinson , a County Superior Court judge, ruled that

regulation of email by the state of Washington was unconstitutional.

The Washington state law provides for the prosecution of senders of

commercial e-mail that use false return addresses, misleading

information in the subject line, or a disguised transmission path.

Washington law provides that either actual damages or an amount

between $500 and $1,000 per email can be collected. 

Washington state attorney general's office filed suit against Jason

Heckel, who was alleged to have sent up to 1 million messages a week

for a product that he was selling online. Henkel's attorney argued

that the commerce clause of the U.S. Constitution gives Congress, not

the individual states, the primary authority to regulate interstate

commerce. 

Judge Robinson agreed and found that in order for businesses not to

violate Washington law, they would have to first determine whether any

of the intended recipients were located in Washington. Judge Robinson

ruled that this state law violated the commerce clause of the which

provides that no state shall make any law which impedes the

transaction of interstate commerce. The judge held that the statute is

unduly restrictive and burdensome and places a burden on businesses

that outweighs its benefits to consumers. 

Many legal experts disagree and point out that quite a few states have

enacted consumer protection laws without finding them to be in

violation of the commerce clause. The case will not stand as a binding

precedent unless it is upheld on appeal. The state has until April 10

to decide whether to appeal. 

http://www.zdnet.com/zdnn/stories/news/0,4586,2462018,00.html





* Intuit sued over alleged privacy breach *

Intuit Inc., the largest maker of personal finance software, was sued

by Joseph Rubin, a user of its Quicken.com Internet site who alleges

the company disclosed personal information to advertisers. The suit

seeks class action status.

http://www.computerworld.com/home/print.nsf/CWFlash/000310F58A





* Government worker can't expect computer privacy *

The U.S. Court of Appeals for the Fourth Circuit ruled that a

government worker did not have a legitimate expectation of privacy

with regard to the record or fruits of his Internet use in light of

his employer's policy. Mark Simons, was an employee of the CIA. The

agency issued a policy regarding Internet usage by employees which

stated that employees were to use the Internet for official business

only, and that the agency would conduct electronic audits to ensure

compliance. Investigators found files which included pictures of

minors on Simons' hard drive. Simons was indicted for knowingly

possessing material containing images of child pornography. Simons

moved to suppress the evidence, arguing that the searches of his

office and computer violated his Fourth Amendment rights. While

stating that government employees may have a legitimate expectation of

privacy in their offices, Judge William W. Wilkins said that Simons

did not have a legitimate expectation of privacy with regard to the

record of fruits of his Internet use, since the policy clearly stated

that the agency would audit, inspect, and monitor employees' use of

the Internet. 

http://www.lawnewsnetwork.com/practice/techlaw/news/A18334-2000Mar9.html





* Posting physicians' home addresses online doesn't violate California

law *

The California Court of Appeal ruled that a licensed physician's name

and address is a matter of public information and its posting on the

Internet did not violate the Information Practices Act or the

California Public Records Act. The suit came after the Medical Board

of California began posting physicians' addresses of record on its web

site. Doctors could provide an alternative address of record if they

did not want their home mailing addresses disclosed in this manner.

http://www.lawnewsnetwork.com/practice/techlaw/news/A17976-2000Mar6.html





* Colorado approves anti-spam bill *

A bill aimed to fight unsolicited email won final approval by the

Colorado Senate and was sent to the Governor for his signature. The

new law requires advertisers to add an "ADV:" label to the subject

line of spam-bearing email and remove consumer names from mailing

lists upon request. The law also requires senders to use a legitimate

return address, provide a way for recipients to get their e-mail

addresses off the mailer's list and bans the use of third-party e-mail

addresses to legitimize the mailing. 

http://www.newsbytes.com/pubNews/00/145909.html









Securities

=======



* Temp worker gave out merger secrets * 

A temporary worker at two investment banks used the Internet to

identify companies about to merge and passed tips on to 18 people who

made $8.4 million in illegal stock trading profits. 

According to prosecutors, John J. Freeman, a part-time computer

graphics worker, obtained information from merger documents prepared

at Goldman Sachs Group Inc. and Credit Suisse First Boston. Then he

passed on the confidential information on through instant messaging

and private chat rooms on AOL. Freeman and those who allegedly

profited from his tips were charged with conspiracy and insider

trading in what is believed to be the largest such criminal case to be

brought in terms of the number of deals and the number of defendants.

Freeman pleaded guilty and is cooperating with the government. 

http://legalnews.findlaw.com/News/s/20000314/insiderinternet.html







Online Jurisdiction

==============



* Canadian supreme court will not hear Internet jurisdiction case *

The Supreme Court of Canada will not hear an appeal of a British

Colombia court decision in a case with broad implications for Canadian

Internet users. The Supreme Court dismissed an application by

Braintech Inc. of Vancouver to hear its appeal of a ruling released by

the B.C. Court of Appeals. 

Braintech sued John Kostiuk of Vancouver for defamation, which it said

occurred in a chat room for retail investors. Even though the

litigants were both located in Vancouver, the lawsuit was filed in

Texas. Kostiuk did not defend himself, believing the Texas court had

no jurisdiction, but the court granted a default judgment in favor of

Braintech and awarded the company more than $400,000 in damages.

Braintech took the judgment to the B.C. courts and asked to have it

enforced. Kostiuk succeeded at the B.C. Court of Appeal. 

The Court of Appeals' decision has been hailed as the most significant

Canadian Internet ruling since it spells out under what conditions a

given jurisdiction can rule on an Internet dispute. The court adopted

the reasoning in the U.S. Zippo case and stated that the exercise of

jurisdiction is determined by examining the level of interactivity and

commercial nature of the exchange of information that occurs on the

web site. 

http://www.nationalpost.com/financialpost.asp?f=000310/228122









Freedom of speech and filtering

=======================



* Block site lists published online *

Computer consultant Bennett Haselton gained access to Symantec

subsidiary iGear's system, and found that many of the sites it bars

are not pornographic. When Haselton posted a link on his site to

iGear's list of blocked sites, the company's lawyers sent a letter to

his service provider, saying that the link was infringing the

company's copyrights. Filtering firms say they keep their lists

private to prevent competitors from knowing their trade secrets. But

Haselton argues that the lists should be public so that parents,

schools and libraries can know exactly which sites are being blocked. 

http://news.cnet.com/news/0-1005-200-1567022.html





* China eases crypto rules *

China has eased restrictions on encryption technology, announcing that

consumer software and equipment, such as mobile phones and Microsoft

Windows would be exempt from the rules. The previous regulations

required all businesses and individuals to register with the

government any products containing encryption technology. The

restrictions now only limit specialized hardware and software for

which encryption is a core function.

http://news.cnet.com/news/0-1003-200-1570561.html









Misc. cyberlaw news

===============



* Historians lose supreme court case about digital government records 

*

A group of historians and librarians opposed to a rule letting federal

agencies destroy computer records as long as they keep a copy on paper

or microfilm lost a Supreme Court appeal. The court, without comment,

turned away an appeal in which the librarians and historians argued

that paper records cannot be searched and indexed as easily as

electronic records. 

http://www.nandotimes.com/technology/story/0,1643,500177301-500231826-501128775-0,00.html





* Another lawsuit filed against Network Solutions *

The dominant Internet registrar Network Solutions Inc. (NSI) is facing

several lawsuits tied to its former monopoly over the sale of domain

names. The latest complaint asserts that NSI violated the U.S.

Constitution when it sold and renewed domain names under a contract

with the Federal Government. The suit asks for nearly $2 billion in

refunds and damages to be awarded to domain name holders. Previous

antitrust lawsuits against NSI have all failed.

http://www.newsbytes.com/pubNews/00/145806.html





* Intel wins Intergraph antitrust lawsuit *

District court Judge Edwin Nelson ruled that an antitrust case brought

against Intel, by its rival Intergraph should be dismissed. 

http://www.newsbytes.com/pubNews/00/145594.html





* AOL hit with injunction by HotJobs.com *

A state appeals court in Virginia issued a preliminary injunction

reinstating an advertising deal between America Online subsidiary

Digital City and HotJobs.com pending trial. The court noted that

HotJobs is very likely to prove that Digital City breached the

contract. HotJobs has charged Digital City with breaching the deal

after AOL entered an exclusive advertising agreement with online jobs

board Monster.com, one of HotJob's main competitors. 

http://news.cnet.com/news/0-1005-200-1569048.html





* Virginia governor signs UCITA *

Virginia Governor, James Gilmore, signed in to law a bill that is

meant to provide uniform rules for contractual electronic

transactions. The Uniform Computer Information Transaction Act (UCITA)

clarifies rules governing electronic transactions for intangible goods

such as electronically delivered software and data. 

http://www.newsbytes.com/pubNews/00/145612.html





* iVillage settles lawsuits filed by former executives *

iVillage Inc., a producer of web sites aimed at women, and three of

the company's former executives announced that lawsuits regarding

employment terms have been settled. The lawsuits alleged that the

company owed stock options to the former executives. Terms of the

settlements were not disclosed.

http://news.cnet.com/news/0-1005-200-1573129.html





* Qualcomm settles with former employees *

Qualcomm has reached an agreement to settle a class-action suit filed

by former employees after the company sold parts of its infrastructure

division to rival Ericsson. The suit alleged that Qualcomm had

breached the terms of its stock option plan. As part of the settlement

$8.9 million will be divided among more than 1,000 former Qualcomm

employees covered by the lawsuit. 

http://news.cnet.com/news/0-1004-200-1575371.html





* Sex harassment suit sent to arbitration *

A New York judge ruled that software engineer Lori Park's claims of

sexual harassment and gender discrimination at Juno Online Services

will be heard by a panel of arbitrators, not by a jury. The court

enforced an arbitration agreements required by Juno as a condition of

getting a job.

http://www.thestandard.com/article/display/0,1151,12742,00.html





* EDS sued over alleged scam *

Akai Musical Instruments and Pioneer New Media Technologies have filed

lawsuits against Electronic Data Systems Corp. (EDS), claiming EDS

drew them into a supposedly secret $120 billion NATO project that

after three years of work and millions of dollars spent turned out to

be a scam. In a statement EDS claimed that it, too, was a victim of

the scam.

http://www.computerworld.com/home/print.nsf/CWFlash/000309F55E





* Judges' financial data disclosed *

The Judicial Conference of the U.S. voted to release judges' financial

disclosure reports to groups that want to post them on the Internet.

In a 16-8 vote by the policymaking arm of the federal judiciary, a

decision by one of its committees barring APBnews.com, from receiving

the documents was overturned. 

http://www.newsbytes.com/pubNews/00/145662.html





* Clinton signs Satellite Network Bill *

A new bill intended to begin privatizing the world's communications

satellite network was signed into law by U.S. President Bill Clinton.

Clinton said the legislation is compatible with his goal of increasing

competition in satellite services. The bill will allow telephone

companies to get direct access to the global Intelsat consortium. 

http://www.nytimes.com/aponline/f/AP-Satellite-Privatization.html

(Free registration with the New York Times required)







That is all for this week,

Yedidya (Didi) M. Melchior 

Editor 





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