cyberlaw informer #49


Welcome to the 49th 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

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In this issue:



1. Introduction

2. Online music and copyrights update

3. Jurisdiction over routed email

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 since the previous issue.



This issue is a little late, due to many other obligations, but better

late than never.



Two of the web's most popular music services, MP3.com and Napster, are

facing several copyright lawsuits. This issue includes a special update

regarding these legal music-copyright issues.

The feature article brings a jurisdiction case summary stemming from an

ISPs mistake in routing email.



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

end of this newsletter. This issue's more than 40 cyberlaw news items

include updates about the "love you" virus, Microsoft's antitrust case,

computer hacking, domain disputes and many more including a Brazilian

computerized judge.



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 1-48) 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. Online music and copyrights update

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



Two of the most popular online music services, MP3.com and Napster, have

recently faced legal defeats in copyright cases. Following is a summary

of the legal trouble facing each of these services.





* MP3.com loses to RIAA *

The Recording Industry Association of America (RIAA) won a key victory

in its legal battle against MP3.com, U.S. district judge Jed Rakoff

ruled that the company's MyMP3.com service violated music copyrights.

The My.MP3.com service allows customers to listen to their CDs through

the company's Web site. Unlike other similar services, which ask their

customers to upload music to online "storage lockers" for later access,

MP3.com copied and stored a database of close to 80,000 CDs on its own

servers. Customers could tap into this database if they proved they had

their own copy of the CD.  That made the service simple to use,

eliminating time-consuming uploads and downloads.



The lawsuit filed by the RIAA, along with Sony Music, Warner Music, EMI

Recorded Music, Universal Music and BMG Entertainment, said MP3.com

should be responsible for $750 to $150,000 per CD that was illegally

copied into the Internet company's database. The judge set trial date to

August 28 to determine damages. The company said it would appeal the

ruling after the judge's full decision is released.



MP3.com said it would halt access to major label songs on its MyMP3.com

service, while the company continues talks to settle a copyright

infringement lawsuit filed by record companies. The company's CEO said

that My.MP3.com would continue to be a successful feature of the Web

site, even without the music from the major labels.

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/073933.htm



MP3.com said it reached a licensing agreement with Broadcast Music

(BMI), one of the two major U.S. organizations that collect music

royalty payments.  The agreement lets MP3.com play BMI's 4.5 million

compositions on its Web site.

http://news.cnet.com/news/0-1005-200-1823327.html







* Napster's legal problems *



Rap artist Dr. Dre sued Napster, adding a new layer of legal woes to the

already besieged company. Dr. Dre is also targeting students at

universities who are using the Napster software to download and swap MP3

music files. Dr. Dre demanded last week that Napster remove his work

from its service, but the company refused, saying it could only remove

individual users identified as copyright violators.  In response, the

artist is asking that the court shut down Napster and award damages of

$100,000 per illegally copied work.

http://abcnews.go.com/sections/tech/DailyNews/napster000426.html



Napster, started last year by 19-year-old student Shawn Fanning, has

thrown the music industry into a kind of panic. Fanning's software

allows people to link their computers directly to each other and share

their music collections without paying companies or artists for the

songs. At any time, thousands of people are online, sharing hundreds of

thousands of songs through Napster's directory.





* Napster not an ISP *

The Recording Industry Association of America (RIAA) was the first to

take legal action, suing Napster late last year.

U.S. District Judge Marilyn Hall Patel ruled that Napster is not a just

a conduit for information, rejecting arguments that the case should be

thrown out because the company is not directly responsible for copyright

infringement on its network.

Napster argued it is entitled to the same protections from copyright

liability as Internet service providers (ISPs) are afforded. ISPs that

respond appropriately to complaints of infringement on their systems

cannot be ordered to pay damages under the U.S. Digital Millennium

Copyright Act (DMCA).

Judge Patel rejected that reasoning, and denied Napster's request for

summary judgement. No court dates have been set for continuing the

proceedings.

http://www.wired.com/news/politics/0,1283,36191,00.html





* Napster removes 317,377 Metallica swappers *

Heavy Metal band Metallica filed suit a few weeks ago against Napster

and Three universities. Following Yale University's ban on Napster,

Metallica removed it from its list of defendants in the Napster suit.

Indiana University became the second school to announce it will block

access Napster. In return, IU was also dropped from the lawsuit.

(I want to thank Corey D. Steinberg for sending me an update on this

issue.)



Napster announced that it blocked 317,377 user screen names that have

been identified by Metallica as allegedly infringing on the rock band's

copyrights.

Metallica hired British copyright protection firm NetPD to check out

hundreds of thousands of Napster users who had made the band's songs

available online through the Napster service, and then presented Napster

13 boxes full of legal documents identifying usernames of people who

allegedly made Metallica songs available online. Metallica demanded that

they be blocked from the music-swapping service.

Many individuals using the software believe they are operating

anonymously or that individual actions would go unnoticed among the

massive quantity of files being traded at any given time. Napster users

remain superficially anonymous, but enough information is transmitted by

the Napster service to track many individuals to their specific

computers.

That put Napster in a legal bind: block its subscribers or risk

undermining some of the legal arguments that it is using to counter the

record industry's court attacks.  Napster chose the safer legal path,

but it gave its members a way to appeal their eviction.



Napster's press release:

http://www.napster.com/metallica-notice.html





However, some musicians see Napster as a possible ally in fighting the

traditional record industry. Rapper Chuck D, who has long been one of

the industry's most outspoken proponents of MP3 music, said that he is

hosting a song-writing contest on his Rapstation.com Web site, aimed at

highlighting how Napster can help musicians.

http://news.cnet.com/news/0-1005-200-1795578.html







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3. Jurisdiction over routed email

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





In Intercon v. Bell, the U.S. 10th Circuit Court of Appeals recently

ruled that a state has jurisdiction over an Internet service provider

which mistakenly routed email messages through servers of a local

company.

The finding of jurisdiction means that the local company can sue the

out-of-state company in a local court.





Intercon, an Oklahoma corporation, operates an Internet access service.

For Internet routing purposes, Intercon uses the domain name icon.net.

In July 1996, Bell Atlantic (Bell), a Delaware corporation doing

business in the northeastern and mid-Atlantic United States, began

offering a dial-up Internet service. Because of certain provisions of

the Telecommunications Act of 1996, Bell was required to use a global

service provider to transmit the email messages and Internet traffic.

Bell offered its subscribers a choice between several global service

providers, including a New Jersey company called ICon CMT, whose domain

name was iconnet.net. Beginning in July 1996, Bell mistakenly routed its

customer's email messages to the wrong domain name, thus using

Intercon's mail server instead of ICon CMT's server.



Intercon's mail server experienced a severe slow-down in processing

ability due to the thousands of mail messages being routed through it by

Bell. After Intercon's president, contacted Bell on several occasions,

Bell began taking steps to correct the problem. Intercon sued Bell in

the U.S. District Court for the Western District of Oklahoma, seeking

compensation for Bell's unauthorized use of the mail server and the

damages caused thereby.



To establish the existence of personal jurisdiction over defendant,

Intercon's president stated in an affidavit that he began contacting

defendant in late October 1996 about the unauthorized use of plaintiff's

mail server; that he was advised that defendant knew it was routing

traffic to Intercon's server and that email traffic from approximately

12,000 of Bell's subscribers was involved; that on one occasion he

identified himself as one of Bell's subscribers and was given Intercon's

phone number for technical support; that it was only after he engaged an

attorney in late November that Bell agreed to stop giving the incorrect

address to its customers by December 31 1996, and to revise its Internet

access program to prevent its subscribers from being routed through

plaintiff's server by February 20, 1997; and that as a programmer

familiar with Internet access and email services, it was his opinion

that defendant could have blocked customer access to the Oklahoma mail

server immediately upon discovering the problem.



In response, Bell submitted an affidavit stating that it conducted no

business in Oklahoma; that it was not informed of the problem until

"late December"; that it took immediate steps to halt the flow of email

traffic; and that it finally interrupted its customers' service on

February 20, 1997.



The district court granted Bell's motion to dismiss for lack of personal

jurisdiction, finding that Bell's contacts with the forum state of

Oklahoma were not purposefully established. Intercon appealed hat

decision.



Judge Murphy, delivering the opinion of the appeals court, ruled that

since there was no evidentiary hearing yet, and the motion to dismiss

for lack of jurisdiction was decided on the basis of affidavits and

other written material, the plaintiff need only make a prima facie

showing that jurisdiction exists. The allegations in the complaint must

be taken as true to the extent they are uncontroverted by the

defendant's affidavits. If the parties present conflicting affidavits,

all factual disputes must be resolved in the plaintiff's favor. However,

only the well pled facts of plaintiff's complaint, as distinguished from

mere conclusory allegations, must be accepted as true.



To obtain personal jurisdiction over a nonresident defendant, a

plaintiff must show both that jurisdiction is proper under the laws of

the forum state and that the exercise of jurisdiction would not offend

due process.



The Due Process Clause in the U.S. constitution permits the exercise of

personal jurisdiction over a nonresident defendant "so long as there

exist minimum contacts between the defendant and the forum State."

The "minimum contacts" standard may be met in two ways. First, a court

may assert specific jurisdiction over a nonresident defendant "if the

defendant has purposefully directed his activities at residents of the

forum, and the litigation results from alleged injuries that arise out

of or relate to those activities."

When a plaintiff's cause of action does not arise directly from a

defendant's forum-related activities, the court may nonetheless maintain

general personal jurisdiction over the defendant based on the

defendant's business contacts with the forum state.



Even if defendant's actions created sufficient minimum contacts, the

court must still consider whether the exercise of personal jurisdiction

over defendant would offend traditional notions of "fair play and

substantial justice."



In this case, accepting Intercon's evidence as true (at least until the

evidentiary hearings), Judge Murphy concluded that Intercon showed that

Bell purposefully directed its conduct toward Oklahoma after the end of

October 1996. At that point, Bell had notice that it was routing its

customer's email through the Oklahoma mail server and that the

unauthorized traffic was causing problems for the Oklahoma-based

company. It is possible that Bell knew this information even earlier, as

it was already providing plaintiff's phone number to its customers for

technical support before Intercon advised Bell of the problem. Bell

nonetheless continued to provide Intercon's address to its new

subscribers for a full two months, until December 31, 1996, and

permitted thousands of its old customers to access the Oklahoma server

for an additional seven weeks, despite having the technological ability

to prevent such access immediately upon discovering the problem.

Although Bell may have had a legitimate business reason for not

terminating its use of the Oklahoma mail server immediately (such as

concerns over interrupting its customers' service), Judge Murphy ruled

that Bell's reasons do not negate the fact that it purposefully availed

itself of the Oklahoma server for almost four months after being

notified of the erroneous address.



Bell argued that because it never intended to transmit traffic through

Oklahoma, its inadvertent contacts with Oklahoma were merely

"fortuitous," and therefore insufficient to establish personal

jurisdiction.

The court ruled that while this may be an accurate description of

defendant's initial contacts with Oklahoma, after the end of October

1996, its continued transmission of email through the Oklahoma mail

server was knowing and intentional.



The court also held that Bell's activities and their consequences have a

substantial enough connection with Oklahoma to make the exercise of

jurisdiction reasonable.



After receiving notice of the routing error, Bell knew its conduct over

the next four months was causing injury in Oklahoma, and it should

reasonably have expected to be sued there.



In asserting jurisdiction, the court considered five factors:



(1) The burden on the defendant.

Although there will certainly be some burden on Bell, it is a large

interstate company accustomed to conducting business and litigation in

multiple states.



(2) The forum state's interest in resolving the dispute.

According to the court, Oklahoma has a "manifest interest" in providing

a forum in which its residents can seek redress for intentional injuries

caused by out-of-state actors.



(3) The plaintiff's interest in receiving convenient and effective

relief.

Intercon is a small local company with limited resources, whose

involvement in the underlying events has been totally involuntary. This

factor weighs heavily in favor of Intercon because its chances of

recovery will be greatly diminished by forcing it to litigate in a

another forum and the burden may be so overwhelming as to practically

foreclose pursuit of the lawsuit.



(4) The interstate judicial system's interest in obtaining the most

efficient resolution of controversies.

Oklahoma seems to be the most efficient place to litigate the dispute.

Although witnesses are located both at Bell's principal place of

business in Virginia and at Intercon's business in Oklahoma, the wrong

underlying the lawsuit occurred in Oklahoma.



(5) The shared interest of the several states in furthering fundamental

substantive social policies.

This factor does not appear to apply in this case.



Upon balancing the 5 factors, the court concluded the exercise of

personal jurisdiction over defendant is reasonable, and reversed the

judgement of the district court.



You can read the full opinion at:

http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=10th&navby=case&no=9

86428









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

4. Resource of the week

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



This week's resource is the new U.S. Supreme Court web site at:

http://www.supremecourtus.gov



The U.S. Supreme Court recently launched its own web site. The site

gives a tour of the Supreme Court, a look at the Court's calendar, lists

bar admissions information including an application form,  publishes the

court rules, court opinions and case handling guides.



The site is not geared towards legal researchers as it retains opinions

online only until the end of the Term, and does not offer a search

mechanism.



Note: The site offers "bench" opinions, which are the first version of

an opinion, released immediately after the case is announced by the

Court from the bench. Simultaneously, bench opinions are disseminated

electronically to subscribers of the Court's Project Hermes. A bench

opinion is replaced within a few hours by a slip opinion, within a few

months by a paginated version of the case in a United States Reports

preliminary print, and one year after the issuance of the preliminary

print - by the final version of the case in a U. S. Reports bound

volume. In case of discrepancies between the print and electronic

versions of a bench opinion, the print version controls. In case of

discrepancies between the bench opinion and any later official version

of the opinion, the later version controls.





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







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

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

========



* Search for the "Love You" programmer continues *

More than a week after computers all over the world were struck by the

"Love You" virus (I hope that you know better than to open those

attachments) investigators are still trying to get to the program's

authors. Philippine prosecutors said police did not have enough evidence

to hold a man suspected of helping to create the crippling virus and

ordered him set free.

Onel A. De Guzman, a student from the Philippines, said he may

accidentally have released the "Love You" virus. De Guzman is one of two

students at the AMA Computer College who wrote computer programs that

have become a focus of the search for the origin of the "I Love You"

virus. De Guzman's thesis project, designed to steal passwords from

other computer users, was rejected as a form of high-tech theft, so he

did not graduate with the rest of his class. De Guzman said he had

discussed his thesis with others, and his lawyer suggested that others

may have participated in the writing of the virus.

http://www.thestar.com/thestar/editorial/money/20000511BUS01_FI-LOVE11.html





* Freedom house warns of government Internet censorship *

As the Internet becomes increasingly accessible globally, more

governments may try to control online news agencies by creating

restraints to online communication, Freedom House, a pro-democracy group

warned in a new report. According to the Washington, D.C.-based media

watchdog group 45 countries already restrict Internet access.

Full report at: http://www.freedomhouse.org/pfs2000/

I hope to bring a summary of the report in a future issue.





* It's O.K. to copy in Italy *

Judge Giorgio Gianetti, from the Turin (Italy) court, ruled that it is

no crime to duplicate software for personal use. Judge Gianetti cleared

an Italian businessman from charges of duplicating programs, thus

breaking a 1941 Italian copyright law. The judge ruled that duplication

isn't a crime if it's for personal use and not intended for profit.

http://www.wired.com/news/politics/0,1283,35827,00.html





* Supreme Court upholds Lunney v. Prodigy *

The U.S. Supreme Court let stand the dismissal of a lawsuit against

Prodigy, an Internet service provider after an impostor using a

15-year-old boy's name sent a threatening, profane email and posted two

vulgar bulletin board messages. The justices without any comment or

dissent denied an appeal by Lunney who sued Prodigy for defamation and

negligence over the messages sent in 1994.

A summary of the New York Court of Appeals ruling was published in

Cyberlaw Informer #38, and can be found at

http://mishpat.net/cyberlaw/archive/informer38.shtml.







Intellectual Property

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



* Patent the patent application *

Patents have just moved one step forward. Kernel Creations Ltd., a

Dallas company, has won a patent for a method of applying for a patent.

http://www.nytimes.com/library/tech/00/05/biztech/articles/01pate.html





* Elian web parody taken down *

The Associated Press (AP), which holds the copyright to the now-famous

picture of an armed agent about to seize the 6-year-old Cuban boy from

his caretaker, has threatened legal action against the creator of an

Internet animation. The animation featured photographs of Janet Reno,

Elian Gonzalez, and FBI agents synched with the voices from the popular

Budweiser "wazzup" commercials. Site visitors now see the cease and

desist letter sent by AP official.

http://www.thestandard.com/article/display/0,1151,14586,00.html





* Pets.com sues TV writer *

Online pet store Pets.com says the friendly reputation of its kitschy

"spokespuppet" has been defamed by a foul-mouthed dog puppet featured on

NBC's "Late Night With Conan O'Brien." TV show. In a federal lawsuit

Pets.com accuses "Late Night" writer Robert Smigel of defaming the

popular sock puppet.

http://www.salon.com/tech/wire/2000/04/26/sock_puppet/index.html





* ITC investigates Tessera chip dispute *

The International Trade Commission (ITC) started investigating into the

practices of Sharp and Texas Instruments, after a complaint filed by

Tessera claiming that Sharp and Texas Instruments violate U.S. patent

law.

http://www.newsbytes.com/pubNews/00/148164.html





* Internet phone patent dispute *

Phone.com, which makes software that Internet-enables cell phones, and

Geoworks that claims to hold a patent that covers user interface

technology used on mobile phones, which are based on WAP (Wireless

Application Protocol) are involved in patent dispute. Geoworks solicited

licensing fees from its competitors, and a number of them, including

Toshiba, have complied. Phone.com, however, filed suit in a U.S.

District Court challenging the validity of Geoworks' patent claims.

Phone.com claims that Geoworks' patent does not cover wireless Internet

technology.

http://www.wired.com/news/business/0,1367,35925,00.html







Domain names

===========



* Domain names can not be garnished *

The Virginia Supreme Court ruled that Network Solutions Inc. (NSI), the

leading registrar of Internet domain names, can't be compelled to

garnish the Internet names of companies that have court judgments

against them. The decision overturns a lower court ruling in favor of

U.K. clothing manufacturer Umbro International.

Umbro sued in a South Carolina court claiming rights to the domain

umbro.com that was registered by a privately held Canadian company.

Umbro won in 1997 and was awarded nearly $24,000 in attorneys' fees and

expenses. Umbro then sought a court order requiring Network Solutions to

garnish 38 domain names registered to the Canadian company. However, the

Virginia court ruled that Network Solutions' services weren't subject to

state garnishment statutes.

Full text of the decision:

http://www.courts.state.va.us/txtops/1991168.txt





* Yahoo! files 37 domain complaints *

Yahoo! has set a record for the largest number of domain name dispute

filings with ICANN, objecting to 37 registered domains, ranging from

geographical variations such as AtlantaYahoo.com to similar sounding

names such as  Jahu.com and Yhu.com.

http://www.newsbytes.com/pubNews/00/148155.html





* Law firm wins domain dispute *

A federal judge ruled that Brian Wick, owner of American Distribution

Systems, should turn over two Internet domain names he registered that

are similar to the name of a prominent law firm. Wick claimed he had

registered names of some 90 law firms to parody lawyers and corporate

America. One of the firms, Morrison & Foerster, sued Wick, saying that

his use of the names besmirched its reputation and confused people

searching for its Web site.

http://www.denverpost.com/business/biz0421d.htm





* Nasdaq files domain lawsuit *

The Nasdaq Stock Market charged Deltacross Ltd., a British firm, in U.S.

federal court with ''cybersquatting,'' saying the company refused to

relinquish Web site addresses Nasdaqeurope.com and Nasdaqeurope.net.

Nasdaq-Europe is a joint venture of the NASD, Softbank Corp. of Japan,

and two venture capital funds to create a new European stock market set

for launch in the fourth quarter of 2000.

http://www.usatoday.com/life/cyber/tech/cth802.htm





* Chinese firm wins domain name dispute *

Jiangsu Jintu High-Tech Co., a Chinese company, won a domain name

lawsuit brought by U.S.-based Infospace Co., the Chinese company now

will legally own the domain name microinfospace.com. Jintu is a software

firm, while Infospace is an ecommerce company, and their core businesses

have no relation with each other.

http://www.chinaonline.com/topstories/000425/2/C00041903.asp







Cyber crime

=========



* Russian hackers arrested *

Russian Police arrested five hackers accused of stealing more than 5,400

credit card numbers from Internet retailers and pocketing more than

$630,000. The 22-year-old mastermind of the scheme registered an

Internet retailer called Politshop, and made an agreement with a Moscow

bank for handling credit transactions. Other members of the group

allegedly cracked systems of genuine Internet retailers, stole the

credit card numbers of their customers and made bogus purchases from

Politshop.

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/039286.htm





* Russia's gas monopoly hacked *

Russian authorities say Gazprom, the huge state-run gas monopoly, was

one of a growing number of targets hit by computer hackers last year.

Acting with a Gazprom insider, hackers were able to get past the

company's security an break into the system controlling gas flows in

pipelines.



http://www.techserver.com/noframes/story/0,2294,500197283-500270387-501418162-0,00.html

I want to thank Boaz Guttman for sending me this story.





* Mitnick lectures stopped *

Kevin Mitnick, the world's most famous computer hacker, has been ordered

to get off the lecture circuit or risk going back to prison. Under a

plea agreement, U.S. District Judge Mariana Pfaelzer prohibited Mitnick

for three years after his release from any access to computers, cellular

telephones, televisions or any equipment that can be used for Internet

access. The question is whether Mitnick can lecture about computers.

Mitnick has some $20,000 worth of speaking engagements scheduled through

August, and claims his lectures are protected free speech.

http://www.lasvegassun.com/sunbin/stories/tech/2000/apr/28/042800288.html





* Jail term for online threats *

Michael Ian Campbell, 18, was sentenced to 4 months in prison for using

the Internet to send a message threatening Columbine High School, the

scene a year ago of a shooting massacre that claimed 15 lives.

http://www.wired.com/news/politics/0,1283,35993,00.html





* Online school shooting threats *

Philip Tkacz , 23, who dubbed himself 'Schoolshooter 2000' was charged

with making online threats to stage a Columbine-style attack on a

school. FBI agents arrested Tkacz at his home where they seized an

assault rifle, a handgun, a bomb-making manual and his computer, on

which agents found photographs of two schools in central Kentucky.

http://www.mercurycenter.com/svtech/news/breaking/internet/docs/474081l.htm





* AboveNet hacked *

Law enforcement authorities are investigating a cyberattack on Web

hosting firm AboveNet, that slowed service or shut down 1,000 sites.

http://www.zdnet.com/zdnn/stories/news/0,4586,2555422,00.html





* Cisco sales agents accused of death threats *

Two former customers accuse Cisco sales agents of extortion, conflicts

of interest and making death threats. Two Cisco sales agents accused of

"receiving improper commissions" have left the company, a third person

has been suspended and another transferred.

http://news.cnet.com/news/0-1004-200-1770554.html







Privacy Spam and Consumer protection

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



* MasterCard criticizes Disney's child-privacy plan *

A plan by The Walt Disney Co. to use parents' credit-card numbers to

verify that their children can use services on Disney's web sites, was

criticized MasterCard, a major credit-card company.

The Children's Online Privacy Protection Act (COPPA) that took effect

last week, aims to prevent personal information from being collected

online from children younger than 13 years old without their parents'

consent.

Disney said it won't put a charge on credit cards, only validate them to

ensure that the card number is genuine. MasterCard claims that credit

cards can't be "validated" as Disney suggested in cases of tiny or

nonexistent sums, since they were never intended to be used as an age

verification mechanism and are ill-suited for that purpose.

A summary of COPPA requirements ca be found at:

http://mishpat.net/cyberlaw/archive/informer32.shtml





* Suit claims eBay liable for fraudulent auctions *

A group of victims who bought fake sports memorabilia on eBay filed suit

against eBay, seeking damages under a California statute that regulates

the sale of auctioned items. The suit challenges the core of eBay's

legal framework, through which the company takes a hands-off,

no-liability approach to the transactions that take place between buyers

and sellers.

http://www.law.com/cgi-bin/gx.cgi/AppLogic+FTContentServer?pagename=law/

View&c=Article&cid=ZZZFHL0OQ7C&live=true&cst=1&pc=0&pa=0&s=News

&ExpIgnore=true&showsummary=0

(Copy and paste full URL)





* FTC settles with online car dealers *

The U.S. Federal Trade Commission (FTC) reached a settlement with auto

dealerships in Colorado, New York and Pennsylvania that were charged

with falsely advertising their auto lease rates online.

http://news.cnet.com/news/0-1007-200-1772964.html





* Student keeps classmates names secret *

U.S. District Judge Donald E. Ziegler granted Zachariah Paul, a high

school student, a protective order to keep secret the names of

classmates who helped create and distribute an email message ridiculing

the school's athletic director.

http://www.law.com/cgi-bin/gx.cgi/AppLogic+FTContentServer?pagename=law/

View&c=Article&cid=ZZZXBR5QQ7C&live=true&cst=1&pc=0&pa=0&s=News

&ExpIgnore=true&showsummary=0

(Copy and paste the whole URL)







Securities

=======



* SEC issues Net  guidelines *

The U.S. Securities and Exchange Commission (SEC) released new

guidelines seeking to remove some of the barriers to using the Web to

disclose information to investors. According to the new guidelines

hyperlinked information on a company's Web site could be attributed to

the company but said it would depend on the circumstances. The SEC also

specified that the context of the hyperlink, the chance that investors

could be confused by the information and the presentation of the

hyperlink are important factors that must be considered in determining

whether a company can be held responsible for the third-party

information.

The SEC guidelines say that companies can send documents electronically

to investors if the investors consent and the consent is obtained in a

manner that assures its validity and a record of the consent is

obtained. Another clarification permits brokers and banks to deliver

documents electronically in Portable Document Format (PDF) as long as

investors are adequately informed of the requirements and are provided

with the necessary software and assistance to do so.

http://www.computerworld.com/home/print.nsf/CWFlash/000427D972





* Tree trimmer accused of online stock manipulation *

Criminal charges were filed against Stephen Sayre, 43, a tree-trimmer,

who allegedly boosted an Internet company, eConnect , on the Web and

then sold his stock in the firm for a profit of $1.4 million. eConnect

spokesman said the company could not comment on Sayre's case other than

to say, "We know of no connection whatsoever between the SEC's action

against Mr. Sayre and eConnect."

http://news.excite.com:80/news/r/000425/21/crime-internet







Freedom of Speech

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



* Hongkong.com censors Taiwan independence *

Hongkong.com, an affiliate of Chinadotcom, blocked its chat-room users

from discussing Taiwan and Tibet independence shortly after a top

mainland Chinese official warned media to avoid the sensitive subject.

Phrases such as 'Taiwan independence' were scrambled when they were

typed in chat rooms.

http://www.mercurycenter.com/svtech/news/breaking/ap/docs/480510l.htm





* Grassroots.com and campaign contributions *

The National Legal and Policy Center filed a complaint with U.S. Federal

Election Commission (FEC) against the start-up company Grassroots.com,

contending that candidate information on the site constitutes illegal

contributions to campaigns. Representatives of Grassroots.com said that

their activities are legal under recent opinions issued by the FEC,

which stated that nonpartisan voter guides do not violate the law.

Grassroots is offering Web design consulting to candidates and plans to

solicit donations for candidates through the site. Grassroots' lawyer

said that the Web design services did not create a legal problem because

they are equally available to any candidate who is interested.

http://www.nytimes.com/library/tech/00/04/cyber/articles/20campaign.html

(Free registration with the NY Times required)







Microsoft News

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



* Government calls for Microsoft break up *

In court filings attorneys representing the U.S. federal government and

19 states, asked to brake Microsoft into two separate companies. This

proposal got extreme media coverage, however other regulatory remedies

were also included in the government filing. These include:

* Microsoft wouldn't be able to sell computer makers discounted copies

of Windows, except for foreign language translations.

* Microsoft wouldn't be able to give discounts to hardware or software

developers in exchange for promoting or distributing other company

products.

* Microsoft would have to appoint a "chief compliance officer" in charge

of ensuring compliance with the new government rules.

The full government filing:

http://cyber.law.harvard.edu/msdoj/pl-remedy.pdf



At the same time, a group of leading economists, who are expected to

file friend of the court brief, say that Microsoft should be split into

four companies. Instead of stopping with a split of Microsoft into a

Windows operating system company and an applications software company,

the economists would further divide the Windows unit into three separate

competing companies.

http://news.cnet.com/news/0-1003-200-1775767.html





* Microsoft Responds *

Microsoft asked Judge Jackson to reject the federal government request

to break up the software giant, and instead order it to give rivals

greater access to its technology.

Under Microsoft's proposed penalty, which would last four years, the

company would be compelled to give rivals access to the secret

programming codes of the Windows computer operating system, while

allowing computer makers to hide the Internet Explorer Web browser and

alter the Windows "desktop."

In addition, the company proposed a timetable that could move court

hearings on remedies in the case to as late as December.

http://www.washingtonpost.com/wp-dyn/articles/A43091-2000May10.html





* 27 private Microsoft antitrust suits consolidated *

A panel of federal judges has consolidated 27 of the 130 private

antitrust suits pending against Microsoft to a single court in

Baltimore. For Microsoft, the move reduces the number of jurisdictions

it must battle. Plaintiff's lawyers gain a larger, united case that

consolidates resources and diminishes divisions among them.

http://news.findlaw.com/legalnews/s/20000427/microsoftsuits.html





* Microsoft's insurers don't want to pay for antitrust *

Zurich American Insurance Inc., Microsoft's general insurer, asked a

federal court that it not be required to pay for legal bills stemming

from third-party antitrust lawsuits. Zurich American contends

Microsoft's liability insurance simply does not cover antitrust issues.







eCommerce News

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



* Mexico approves ecommerce bill *

Mexico's lower house of Congress unanimously approved a bill that will

recognize electronic business transactions. The bill recognizes Internet

purchase orders as binding contracts.

http://www.mercurycenter.com/svtech/news/breaking/ap/docs/475515l.htm





* UCITA signed into law in Maryland *

Maryland Governor Parris N. Glendening signed the Uniform Computer

Information Transactions Act (UCITA) into law.

http://www.computerworld.com/home/print.nsf/CWFlash/000425D90A





* Credit card info available through backdoor *

Thousands of credit card numbers stored on ecommerce sites running the

'Cart32' shopping cart software, are available to anyone with a backdoor

password. Hundreds of websites use Cart32 which runs on Windows 95 and

Windows NT machines.

http://www.wired.com/news/politics/0,1283,35954,00.html







Misc. cyberlaw news

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



* GPS goes civil *

U.S. President Bill Clinton announced an end to the Pentagon's practice

of intentionally degrading the signal available to civil users of the

satellite-based Global Positioning System (GPS). The change will enable

civilian GPS users to pinpoint locations up to 10 times more accurately

than they do now.

When the Department of Defense started launching GPS satellites in the

1980s, it provided two classes of service: signals with an accuracy of

10 meters for military users and a degraded signal available to civil

users with accuracy of 100 meters. That policy was meant to prevent

potential adversaries from using the GPS technology to launch attacks

against U.S. forces or targets.

http://www.computerworld.com/home/print.nsf/CWFlash/000501DB06





* AOL's Instant Messaging rivals complain to the FCC *

CMGI's iCast and Tribal Voice, rivals to America Online's (AOL) popular

Instant Messaging (AIM) service, asked the U.S. Federal Communications

Commission (FCC) to force AOL to open its network to outsiders as part

of the pending merger with Time Warner. The filing addresses

interoperability only with the AOL Instant Messenger (AIM) service and

not with AOL's separate ICQ instant messaging product.

http://www.mercurycenter.com/business/top/045868.htm





* EU objects to MCI-Sprint merger *

The European Commission may block MCI WorldCom's proposed $135 billion

purchase of Sprint, unless the companies scale back the size of their

business. The commission is concerned that the combined company could

carve a dominant position in providing global telephone services to

large corporations and lock up access to the Internet.

http://www.computerworld.com/home/print.nsf/CWFlash/000427D96E





* ICANN under investigation *

The Internet Corporation for Assigned Names and Numbers (ICANN), is

facing a new round of scrutiny by the General Accounting Office (GAO),

the independent investigative arm of the U.S. Congress. Among the

questions the GAO apparently will be trying to answer is whether the

Clinton administration had the legal authority to hand administration of

the Internet to a private entity and how ICANN was selected.





* EPA Settles chemical information dispute *

The U.S. Environmental Protection Agency (EPA) has proposed a settlement

in its dispute with law enforcement officials, over how much information

about chemical plants should routinely be made available by the EPA over

its Web site.

http://www.nytimes.com/library/tech/00/05/cyber/capital/02capital.html





* "Open - access" rejected by Massachusetts regulators *

Massachusetts regulators rejected moves by four Massachusetts

communities to require ''open access'' to high-speed cable modems as a

condition of AT&T's $58 billion takeover of MediaOne Group, saying the

communities overstepped their legal authority.

http://www.digitalmass.com/news/daily/05/02/open_access.html





* DOJ investigating Homestore.com *

The U.S. Justice Department's antitrust division  is investigating

Homestore.com, the largest home and real estate network on the Internet

http://news.cnet.com/news/0-1007-200-1755809.html





* Brazilian Laptop Judge *

An artificial-intelligence program, called the Electronic Judge,

installed on a laptop carried by Brazilian roaming human judges, helps

to assess swiftly and methodically witness reports and forensic evidence

at the scene of an incident. It then issues on-the-spot fines and can

even recommend jail sentences. The software is being tested as part of a

scheme called Justice-on-Wheels, which is designed to speed up Brazil's

overloaded legal system by dealing immediately with straightforward

cases.

http://news.bbc.co.uk/hi/english/sci/tech/newsid_726000/726837.stm









That is all for this week,

Yedidya (Didi) M. Melchior

Editor





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