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cyberlaw informer #58


Welcome to the 58th issue of the Mishpat Cyberlaw Informer - 

Law on the Internet 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.



--------------------------------------------------------

 

In this issue:



1. Introduction

2. Keyword Advertising - A limit on Trademark Owners' Rights 

3. Cyberlaw resource review

4. Computer & Internet law news and updates





--------------------------------------------------------



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

1. Introduction

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



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

Informer since the previous issue.



This weekend (Saturday and Sunday) is 'Rosh Hashana' - the Jewish new

year. I want to take this opportunity to wish you all - whatever your

religion or belief is, and whenever you celebrate new year - a happy,

healthy and successful new year.



This issue's feature article examines a recent ruling in the Playboy v.

Excite keyword advertising lawsuit, a case discussed here in the past.



As usual you will find the cyberlaw news and the resource review

sections at the end of this newsletter. 



The new Mishpat.Net directory will be two weeks delayed and will open

October 15th. Unfortunately, response for my previous request for help

was a little low, so I made it a little easier to add resources. 

If you would like to recommend sites for inclusion in the new database,

go to http://mishpat.net/law and find the appropriate category for the

site you want to recommend (either navigate through the categories on

run a search to find the relevant one).

In every category page you will find a "Add a site" link on the right

hand navigation bar. Click on it and fill in the recommendation form.

Thanks, 

Didi Melchior



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 1-57) 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. Keyword Advertising - A limit on Trademark Owners' Rights

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



In a precedent ruling regarding keyword advertising, Judge Alicemarie H.

Stotler of the United States District Court in Santa, Ana, California,

dismissed a lawsuit brought by Playboy Enterprises against Excite, Inc.

and its search engine licensee, Netscape Communications. 



Judge Stotler's ruling limits trademark rights online, as it recognizes

that a company's trademarks may be used without authorization by search

engines and directories in advertising sales practices. 





* What 'keyword specific' advertising is all about *



Search engines and directories sell word specific banner advertising.

This means that the banner advertisement you will see on your search

results page is connected to the search terms you entered (if the portal

managed to sell that phrase to an advertiser). 

For example: searching Yahoo for "international law" gave me a banner on

the search result page, pointing to Lawinfo.com; searching for "flowers"

brought up a search page with a banner for 1-800-Flowers.com (note:

these are banner advertisements showed, not the search results).

 

Selling word specific banners is a profitable practice for the portals

because it is considered targeted advertising. If a visitor searches for

"flowers" then an ad for an online flower shop is considered targeted

because it is probably relevant to that visitor's needs. 

Targeted advertising is always more profitable, since the advertisers

are willing to pay more for each ad impression, if they know the

impressions are not "wasted" on the general public, and shown only to

potential clients. 



Search engines sell advertising in two ways: per-impression or

per-click. Advertising per-impression means that the advertiser pays the

web site for each visitor that views the banner (usually calculated by

CPM - cost per thousand impressions). In pay-per-click advertising, the

advertiser pays the web site for every visitor that clicks on the banner

and moves to the advertiser's site (the cost per click is usually higher

than the cost per impression since only a small number of the people who

view the banner, click on it).  



Targeted advertising raises the cost that the advertiser pays per

impression (visitor viewing the banner) and is therefore profitable to

the portal that gets a higher revenue for the same number of page views.

It also raises the expected income from per-click advertising. Since the

banner matches the service the visitor is looking for, there is a higher

chance of clicking through to the advertiser's site, raising the

per-click revenue.

Currently portals earn 20 to 30 percent of their ad revenues from

keyword banner ads, even though only a small number of search phrases

are sold to advertisers. 





Most of the portals don't sell search result placement (where the site

will be ranked on the search result page), only banner advertising.

However http://GoTo.com sells search result placement (site owners pay

for high ranking for specific search phrases). In Goto's words (from

their "get listed" section):  

"GoTo.com is the only search engine where you can actually determine

your placement within the search results. What's more, you only pay when

we deliver targeted traffic to your site." 

That means GoTo search results are affected by advertising. Other

directories such as Bay9 (formerly RocketLinks) and FindWhat followed

GoTo's footsteps, and now offer pay-per-click search results placement.





* The Lawsuit *



Playboy sued Excite and Netscape last year, claiming that the search

engines displayed banner ads from pornographic web sites whenever

"playboy" or "playmate" were used as a search term. Playboy owns

trademarks for both terms.



Playboy argued that the use of its trademarks for the sales scheme

amounted to trademark infringement and dilution.



In the summer of 1999, Judge Stotler denied Playboy's request for a

preliminary injunction barring Excite from the practice. Her ruling was

affirmed by the U.S. Court of Appeals for the Ninth Circuit. (You can

read a review in Cyberlaw Informer #21).





* The Ruling *



In her final ruling dismissing Playboy's case, Judge Stotler found that

Excite did not use the trademarks "playboy" and "playmate" in an

unlawful manner. 



Judge Stotler said that Excite did not use the words to identify its own

goods and services and therefore trademark infringement laws do not

apply. 

Judge Stotler added that even if there was a trademark use, there could

be no finding of infringement because there was no evidence that

consumers confused Playboy products with the services of Excite and

Netscape. 



Playboy's lead lawyer said that his client plans to appeal. 





* Some comments *



The Playboy case is a test case for the practice of keyword specific

advertising, and should be seen as an important trademark case. This

case is not about porno, and should interest anyone concerned with

intellectual property rights, including those who never visited a

pornographic website.



Personally, I think Judge Stotler was right. 



Excite is not a competitor of playboy. It is a referring service, which

enables searchers to find products or services they are looking for. 

If someone searches for "playboy" then the banner pointing to one of

Playboy's competitors should be seen as a suggestion to the searcher

that if he is interested in "Playboy", he might also be interested in

additional sites that he can then reach by clicking the advertisement

banner. This practice is known as comparative advertising.



This is somewhat similar to a store owner putting Levi's jeans (or any

other brand) on the same shelf or next to some unknown brand. If people

come in to the store looking for a pair of Levi's (as Levi's has a huge

marketing budget) they will also find the unknown brand, i.e. searching

for "Levi's" brings them also to Levi's' competitors.



There is only a small chance of consumers getting confused. Most jeans

buyers will be able to know the brand of the jeans by looking at the

tag, even if they are next to each other.

The same is true with web surfers. As long as the advertising web site

do not infringe on Playboy's trademarks and copyrights, a visitor will

notice the difference by the domain name, titles, logos etc. (if there

is direct infringement Playboy can sue the site owner). 





One other important factor to consider is the impact of an alternative

ruling on search results. 

If a search engines could not sell "playboy" as a banner, do they also

have to make sure that the search results only contain pages from the

Playboy network? 

All of Playboy's claims against selling keyword banners (trademark

infringement and dilution by sending visitors to non-Playboy sites, and

Excite profiting from Playboy's name since presenting more results

brings more page views and higher advertising revenue) are true also for

search results.



A ruling in Playboy's favor would therefor have a chilling effect on

search results, as search engines would be required to "filter" search

results according to trademark rights.

It would also limit online speech since a search for "playboy" (or any

other trademark) would not be allowed to bring up pages containing the

word that are not owned by Playboy.

For example, any site critical of Playboy for presenting women as sex

objects might be banned from search engines, and will not be able to

effectively transfer its message to potential visitors.





One point that still troubles me is the unjust enrichment claim (that

was not discussed by Judge Stotler).

I can't ignore the fact that basically Excite is making money using

Playboy's trademarks by sending people to Playboy's competitors.



An example might clarify the potential problem.

Consider Excite selling keyword advertising for the term "Coca Cola" to

the highest bidder, even if that bidder is Pepsi. Most people would

consider that "unfair" or "un-ethical" by Excite or Pepsi.

Others might say that it amounts to "Unjust Enrichment" a legal doctrine

which seeks to prevent one party from profiting on the expense of

others, or thanks to using someone else's name, fame, status etc.



While defining the boundaries between intellectual property rights and

unjust enrichment is in my opinion very complicated, it is not necessary

to deal with that issue in the Playboy case.



First, as explained above there are many reasons (including freedom of

speech) to reject Playboy's claims.



Second, unlike the pending lawsuit between Excite and Estee Lauder,

"playboy" and "playgirl" have a generic meaning and use in English

language, and Playboy can not hold a monopoly on those terms, only a

limited monopoly used for protecting its trademarks.



Third, since "Playboy" is used in English language Playboy can not show

that Excite profited from selling advertising tied to the word "playboy"

since at least some of the people searching for "playboy" did it because

of the common word, not the fame of the Playboy company.





 - Didi Melchior



Comments are welcome at editor@mishpat.net





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

3. Cyberlaw resource review

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



This week's resource is the Cyberlaw Encyclopedia at

http://www.gahtan.com/cyberlaw/

 

The Cyberlaw Encyclopedia is a well organized directory of links to more

than 1,000 cyberlaw related web sites and pages.



The main categories include domain names, copyrights, privacy and

electronic commerce, but you will be able to find information on a large

variety of issues such as consumer protection, biotechnology,

jurisdiction, electronic contracts, digital signatures and much more.



http://www.gahtan.com/cyberlaw/

 



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

4. Cyberlaw news and updates

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



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

========



* Supreme Court will not hear Microsoft direct appeal *

Microsoft wins round in its ongoing antitrust battle with the U.S.

Justice Department (DOJ) and 19 states. 

The U.S. Supreme court announced that in an 8-1 decision it rejected the

DOJ request and declined to hear Microsoft's appeal of the federal

government's antitrust case directly, and it will now be sent back to a

federal appeals court.

The United States Court of Appeals for the District of Columbia Circuit,

the court that will hear the appeal has dealt with some of the company's

legal arguments in the past, handing the company its most significant

victory.

In 1998, a three-judge panel reversed Judge Thomas Penfield Jackson's

decision ordering Microsoft to take its Internet Explorer browser out of

the Windows 95 operating system. Two of the judges in that case remain

among the seven judges who will now hear the appeal.

http://www.infoworld.com/articles/hn/xml/00/09/26/000926hnmsdoj.xml





* EU opposes AOL-Time Warner merger *

The European Commission issued a preliminary recommendation to block the

proposed $113 billion merger between America Online (AOL) and Time

Warner. The commission will issue its final judgment on Oct. 24, giving

the parties time come up with proposed concessions. 

http://www.washingtonpost.com/wp-dyn/articles/A31426-2000Sep18.html





* 15 year old the master mind behind an online stock scam *

Jonathan G. Lebed, 15 (Fifteen-year-old!!!) will give back $272,826 he

made by manipulating stocks, as part of a settlement with the U.S.

Securities Exchange Commission (SEC). Lebed, the first minor ever

charged by the SEC started trading stocks when he was 12. When he was

14, he started buying shares of small companies with thinly traded

stocks and illegally drove up prices by posting misleading messages on

Yahoo! Stock boards. Lebed also must forfeit $12,174 in interest for a

total of $285,000. 

http://www.globetechnology.com/archive/gam/News/20000921/UKIDDN.html





* Canada moves towards open-access *

The Canadian Radio-television and Telecommunications Commission approved

a request by the Canadian unit of U.S.-based Covad Communications. It

ordered the country's major telecommunications companies to let Covad

and other high-speed Internet service providers tap into their lines on

the same terms, conditions and rates as long-distance companies.

http://www.globetechnology.com/archive/gam/News/20000922/RNETT.html





* Olympic Committee fights live webcasting *

The International Olympic Committee's round-the-clock effort to keep

live video and sound clips of events off commercial websites, in order

to protect NBC's exclusive coverage, led to catching 30 violators.

Almost all violators stopped webcasting when faced with threats of

copyright infringement lawsuits. NBC's website is the only Internet site

authorized to show Olympic video, and by the time that footage appears

online it is at least a day old, so as not to ruin the network's own TV

coverage. 

http://www.wired.com/news/politics/0,1283,38960,00.html







Intellectual Property

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



* NotHarvard.com is not Harvard *

After suing Harvard University to protect its right to use the name

notHarvard.com, and being counter-sued, the education startup named

NotHarvard.com changed its name to Powered.com. Powered.com asked a

Texas court to enter a consent decree, in which case the parties would

agree to dismiss both suits. Powered.com has also offered to transfer

the domain name, notHarvard.com, to the school. 

http://www.wired.com/news/business/0,1367,38898,00.html





* Apple soup drops name in fear of lawsuit *

Apple Soup, a start-up company planning to employ Napster-like

technology to let users swap digital images, changed its name to

Flycode, after Apple Computer warned it intended to sue for infringing

on its trademark. 



http://www.techserver.com/noframes/story/0,2294,500249760-500372559-502236326-0,00.html





* MP3.com removes DeCSS song *

MP3.com removed a song by Joseph Wecker, in which Wecker sings a version

of the banned computer code known as DeCSS. MP3.com's decision follows

the Motion Picture Association of America (MPAA) successful lawsuits

seeking to ban the code which can be used to hack the DVD encryption

scheme.

http://news.cnet.com/news/0-1005-200-2771353.html





* Major Chinese portals fighting over site design *

Sina.com, the largest portal in China, was sued by Tonight.com.cn.

Tonight alleges that Sina infringed on its copyright and is demanding

compensation of 100,000 renminbi (US$12,077). Tonight claims Sina's City

Life channel is extremely similar to Tonight's page layout, color

combination, column setup and search items. Sina agrees the pages are

similar but claims Tonight's layout hardly featured any originality.

http://www.chinaonline.com/topstories/000919/1/C00091802.asp





* PixStream sued for alleged technology theft *

PixStream, the Canadian firm that was purchased by Cisco at the end of

August for $540-million, faces a lawsuit for a similar amount alleging

its founders stole technology from Unique Broadband Systems Inc.

PixStream developed an Internet technology that allows the distribution

of high-quality video over the Web. 

http://www.nationalpost.com/tech/story.html?f=/stories/20000920/404026.html





* Napster files defense *

In its final appeal filing, Napster accused the world's major record

labels of suing it merely to eliminate threats to their dominance of the

recording industry. At the heart of Napster's defense is the argument

that its technology represents a new method of distributing music, but

the company doesn't intend for people to use Napster to exchange

copyrighted music, but rather to learn about new artists. The full

Napster brief:

http://dl.napster.com/brief0912.pdf





* Universities will not remove Napster *

At least three renowned universities  - Duke, Stanford and MIT - decided

not to ban the use of Napster digital music file-swapping software on

their college campuses. The universities rejected a request by lawyers

for some major music artists to halt the use of Napster. The

universities say they support academic freedom and uncensored access to

information.

College students that enjoy high-speed connections on campus, are

believed to be the biggest fans of Napster's file-swapping service. Last

year, usage was so heavy on some university computers that systems

administrators blocked access to Napster to relieve bandwidth. 

http://www.digitalmass.com/news/daily/09/21/mit_napster.html





* Apple licenses Amazon's 1-Click business method patent *

Apple Computer is the first company to license Amazon.com's

controversial patented 1-Click technology. 1-Click is at the center of a

patent dispute between Amazon and Barnesandnoble.com. Amazon sued B&B,

accusing it of illegally copying its 1-Click feature. Amazon critics

charged that its patents cover obvious and widespread technology and

would harm the growth of e-commerce. 

http://news.cnet.com/news/0-1007-200-2811079.html





* Bill to legalize My.MP3.com service *

Several U.S. congressmen introduced the "Music Owners' Listening Rights

Act of 2000" that would legalize the services for which MP3.com faces

hundreds of millions of dollars in copyright damages. The bill would

give companies the right to copy CDs, store them online, and stream the

songs individually to listeners who could prove they already owned a

copy of the CD. 

http://www.wired.com/news/politics/0,1283,39082,00.html





* Zomba sues MP3.com *

Following the major music labels victory against MP3.com, Zomba

Recording filed lawsuits against MP3.com over MP3.com's My.MP3.com

service, which offers listening to music online after proof of CD

purchase. Zomba is home to stars such as Britney Spears, the Backstreet

Boys, and N'Sync. 

http://www.thestandard.net/article/display/0,1151,18439,00.html





* U.S. House gives musicians back their rights *

The U.S. House of Representatives passed a bill that would restore

musicians' ability to reclaim ownership of their old recordings from

record labels. Bill available at:

http://thomas.loc.gov/cgi-bin/bdquery/z?d106:h.r.05107:





* Student's computer confiscated *

Oklahoma State University campus police confiscated a student's computer

after the Recording Industry Association of America claimed it was used

to distribute copyrighted material.



http://www.techserver.com/noframes/story/0,2294,500258535-500397978-502375801-0,00.html





* Pitney Bowes sues Stamps.com *

Pitney Bowes sued Internet postage service Stamps.com, charging

infringement of four shipping patents. Pitney Bowes claims the patents

cover key processes for shipping and tracking of packages and mail.

http://news.cnet.com/news/0-1007-200-2810091.html





* Digital Island and Akamai sue each other over patents *

Digital Island, a maker of software that speeds data on the Internet,

sued rival Akamai Technologies for patent infringement, about a week

after Akamai filed a similar suit against Digital Island. 

http://news.cnet.com/news/0-1004-200-2808058.html





* Xircom sues 3Com over patent *

Xircom filed a lawsuit against 3Com claiming 3Com's upcoming PC Card

products infringe on patents for Xircom's RealPort PC Cards. 

http://news.cnet.com/news/0-1004-200-2833170.html





* Macromedia counter-sues Adobe *

Macromedia filed counterclaims against Adobe Systems' recent patent

lawsuit. On August 10, Adobe sued Macromedia for alleged infringement of

its patented tabbed palette feature. In its countersuit, Macromedia

claims Adobe's patents are invalid because existing technology was

concealed from the Patent and Trademark Office in Adobe's patent

applications. Macromedia also alleges that three of its patents are

infringed by Adobe's software.



http://www.zdii.com/industry_list.asp?mode=news&doc_id=RTI27a2615rittz&ticker=ADBE





* Don't F*** with Idealab *

Net incubator Idealab sent a cease-and-desist letter to the operator of

the site FuckedCompany.com, demanding that he remove a parody of

Idealab's home page that replaced the word "Idealab!" with "FuckedCo!".

FuckedCompany's owner responded by pulling the parody, but posting the

cease-and-desist letter along with a note from a FuckedCompany reader.

http://www.wired.com/news/business/0,1367,39086,00.html





Domain names

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



* Canadian domain system takes off *

The Canadian Internet Registration Authority (CIRA), now in charge of

the system for managing .ca (Canada's country top level domain name) has

so far certified 18 firms to act as registrars. Registrars must have a

Canadian presence and demonstrate that they have the technological

capacity to process applications quickly. CIRA will charge registrars

$20 a year for each .ca domain they register, although how much these

firms charge their customers is up to them.

http://www.globetechnology.com/archive/gam/News/20000919/RDOMA.html





* Le Monde wins domain dispute *

The French newspaper Le Monde won the rights to the domain le-monde.com.

WIPO arbitrator Pierre-Yves Gautier ruled in favor of Le Monde's

interactive arm against Elphege Fremy of France, ruling that Fremy had

registered the domain name in bad faith. Fremy argued that 'Le-Monde'

which means 'the world' is a generic term that prevents any exclusive

appropriation. 

http://www.nytimes.com/library/tech/00/09/biztech/articles/05france-domain.html

WIPO decision in French:

http://arbiter.wipo.int/domains/decisions/html/d2000-0647.html





* Rosa Parks wins domain dispute *

Rosa Parks, 87, who in 1955 fought for her space on a bus, won the

rights to rosaparks.com. The Rosa and Raymond Parks Institute for Self

Development in Detroit will use the site to educate visitors on civil

rights and Rosa Parks.



http://www.techserver.com/noframes/story/0,2294,500259842-500400643-502403546-0,00.html







Cyber crime

===========



* Teen hacker goes to jail *

A 16-year-old who admitted hacking into NASA and Pentagon computers, 

intercepted email and stole passwords, was sentenced to six months in

jail. He is the first juvenile hacker to be incarcerated for computer

crimes. He was 15 when the crimes occurred.

http://www.nytimes.com/2000/09/22/technology/22AP-HACK.html

(Free registration with the NY Times required)





* Hacker of hundreds of government  sites arrested *

Jason Diekman, 20, was arrested on charges that he hacked into hundreds

of U.S. government, NASA and university computers. Diekman is also

accused of stealing more than 500 credit card numbers through his

hacking activities, which he used to buy $6,000 in computer equipment,

stereo speakers and clothes. 

http://www.mercurycenter.com/svtech/news/breaking/internet/docs/430661l.htm





* Teen hackers arrested In Michigan *

Brian Salcedo, 17, and Jesse Salens, 19, were arrested in Michigan and

charged for alleged hacking incidents, one of which left a pornographic

image on a public school computer system in place of a photograph of the

superintendent. Salcedo allegedly also broke into a service provider's

system and stole passwords. He used the passwords to read users' email.

http://www.newsbytes.com/pubNews/00/155218.html





* Chernobyl creator arrested *

Chen Ing-hau who allegedly created the Chernobyl virus in 1999, was

arrested by authorities in Taiwan.

http://www.zdnet.co.uk/news/2000/36/ns-17921.html





* Nuclear lab hacker arrested *

Benjamin Breuninger, 21, suspected of hacking into a computer at a

nuclear weapons laboratory last year has been arrested and released on a

$25,000 bail.

http://www.mercurycenter.com/svtech/news/breaking/ap/docs/391559l.htm





* Alleged online rapist to be retried *

Oliver Jovanovic, a Columbia University graduate student who was

convicted of kidnapping and raping a 20-year-old student he met on the

Internet, and who then won a new trial in an appeal last year, is

scheduled to be retried before the original trial judge, whom defense

lawyers have accused of bias against their client.

The Appellate Division of the State Supreme Court overturned the

conviction and harshly criticized the trial judge for misusing the

state's rape shield law by preventing the defense from submitting emails

that the woman had sent to Jovanovic expressing her interest in

sadomasochism.

http://www.nytimes.com/2000/09/21/nyregion/21CYBE.html





* California governor signs computer crime bill *

California Gov. Gray Davis. Signed the computer crimes, identity theft

bills aimed at hackers who introduce viruses online or who flood web

sites with useless information, causing them to shut down. If the virus

causes more than $10,000 in damages, the violator will face up to three

years in state prison. 

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/085046.htm







Securities

===========



* Qualcomm suit gets class action status *

Superior Court Judge John S. Meyer  approved class-action status for a

lawsuit brought by more than 1,000 former Qualcomm employees who allege

they were improperly denied stock options after their division was sold

to rival Ericsson. Qualcomm's stoke rose 2,600 percent after the

Ericsson deal. 

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/073901.htm





* SEC Goes After MainStreetIPO.com 

The U.S. Securities and Exchange Commission (SEC) charged earlier that

MainStreetIPO.com violated federal law by failing to register as a

broker. MainStreetIPO's business model is to eliminate the role of

investment banks in underwriting initial public offerings by "Dutch

auctioning" of IPO shares from any company that registered with the SEC. 

http://www.thestandard.com/article/display/0,1151,18938,00.html







Privacy 

========



* EPIC finds U.S. to be the worst privacy protector *

The Electronic Privacy Information Center's (EPIC) third annual report

"Privacy and Human Rights 2000" states that of all developed countries,

the U.S. is doing the worst job of protecting the privacy rights of

Internet users. The report is gloomy on the overall topic of worldwide

electronic privacy. Full report available at:

http://www.privacyinternational.org/survey/index.html





* Carnivore review team hired and exposed *

The U.S. Justice Department (DOJ) hired a research group to analyze

whether the FBI's Carnivore email surveillance system has adequate

protections against abuse. The review team would include senior faculty

members from the Chicago-Kent College of Law. The review of Carnivore is

to be completed in December. 

http://www.wired.com/news/politics/0,1283,39078,00.html



The DOJ mistakenly revealed confidential information about the team of

researchers. It placed a 51-page PDF file online, with project

information such as names, phone numbers, and government security

clearances erased with thick black bars. But anyone with Adobe-supplied

software can view the unaltered document. 

http://www.wired.com/news/politics/0,1283,39102,00.html





* Texas and Living.com settle sale of customer info *

The state of Texas and failed online furniture store Living.com reached

an agreement after the state sued the company to prevent it from selling

customer information. Living.com agreed to destroy all of its customers'

financial records, such as credit card, bank account and social security

numbers. Living.com will be allowed to sell names and email addresses,

but only after notifying all its customers of the company's impending

sale. A customer must also be given a choice whether to "opt out" of the

proposed sale. 

http://news.cnet.com/news/0-1007-200-2864965.html





* More.com sued for violating its own privacy policy *

Health e-tailer More.com was charged by the Missouri Attorney General's

Office with violating terms of its privacy policy by giving personal

data to third parties. 

http://www.newsbytes.com/pubNews/00/155410.html





* Does Amazon illegally transfer personal data out of Europe? *

Privacy International, a privacy rights watchdog, criticized changes to

Amazon.com's privacy policies. Amazon's U.K. subsidiary, Amazon.co.uk,

recently changed its privacy policy to warn customers that their

personal data could be transferred outside the European Economic Area

for processing. Such data transfers may be in breach of European

regulations on data privacy, which prohibit the transfer of personal

data to jurisdictions with less strict privacy legislation.

http://www.thestandard.net/article/display/0,1151,18553,00.html







Online Speech

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



* Quebec French language control *

Quebec's Office de la langue francaise warned Michel Soucy to make his

online real estate, MichelSoucy.com site twin-tongued for both of

Canada's two languages. An interesting article is available at:

http://www.canadacomputes.com/v3/story/1,1017,3800,00.html







eCommerce 

==========



* Franchisees win arbitration *

An arbitration panel stopped Drug Emporium from selling to its

franchisees' customers via the Internet. As part of the agreement

between Drug Emporium and its franchises, each franchisee received

exclusive rights to conduct business in a designated territory. 

The franchisees claimed that the drug chain breached its contractual

obligation to honor their territories by using its web site to sell

directly to customers within the franchisees' territories. The panel

ordered Drug Emporium not to sell to any potential customer physically

within the franchisees' territories.

http://www.law.com/cgi-bin/nwlink.cgi?ACG=ZZZB30QM0DC





* Covisint gets antitrust approval *

Two weeks after the U.S. Federal Trade Commission (FTC) gave its

blessing to Covisint, the $300 billion B2B (business to business)

electronic auto marketplace, its German equivalent, Bundeskartellamt,

granted unconditional clearance. Covisint is expected to be in operation

by the end of October. Covisint was created by Daimler-Chrysler, Ford

General Motors, Nissan and Renault and still has to gain the European

Commission's approval. 

http://www.thestandard.net/article/display/0,1151,18868,00.html





* Ad agency sues Disney over Toysmart.com debt *

Arnold Communications, the advertising agency for Toysmart.com is suing

the bankrupt toy retailer's backer, Walt Disney, for $2.5 million, which

it says it is owed for media buys during the last holiday season.

http://www.newsbytes.com/pubNews/00/155100.html







Regulation

===========



* California governor vetoes online sales tax bill *

California Gov. Gray Davis vetoed a bill that would have required sales

tax on online purchases made by state residents. The vetoed bill would

have required businesses that operate brick-and-mortar stores within the

state and also have online operations to charge taxes to California

residents who buy products online. 

http://news.cnet.com/news/0-1007-200-2861946.html





* Korea opens online tax force *

The Korean National Tax Service (NTS) will assemble a 255-member

investigative task force in an effort to monitor cyber trade.

http://www.koreaherald.co.kr/news/2000/09/__10/20000914_1029.htm





* Gerhard Schroeder opposes surfing tax *

German Chancellor Gerhard Schroeder ruled out a tax on Internet use that

critics said would stifle the development of the Internet in Germany,

Europe's biggest economy. Germany's Finance Ministry proposed to tax

businesses every time employees use company computers for private

Internet surfing.

http://www.wired.com/news/politics/0,1283,38859,00.html





* EMI offers antitrust concessions *

EMI Recorded Music offered new concessions to the European Commission

trying to win clearance for its $20 billion joint venture with Time

Warner's music arm. The commission made clear that it will block the

deal unless it receives substantial concessions to address fears the new

group would dominate the music publishing market.

http://www.nytimes.com/2000/09/20/technology/20ONLI.html

(Free registration with the NY Times required)





* FTC ends Intel probe *

The U.S. Federal Trade Commission (FTC) decided to end a 3-year broad

investigation into Intel practices without taking any further legal

action at this time. In August, Intel settled an FTC complaint alleging

that it illegally threatened to withhold critical product information

from three companies that refused to license their technology to Intel.

http://www.mercurycenter.com/svtech/news/breaking/merc/docs/062032.htm







Misc.

=====



* Online volunteers claim to be full time workers *

Volunteering community leaders, answering questions and offering

guidance to online gamers, claim it is a full-time job. Now Catherinf

Reab, who "volunteered" 40 hours a week, is suing Origin Systems, the

creator of the Ultima Online game, and its publisher, Electronic Arts,

claiming that Ultima exploited its volunteers, using free help to run

what essentially is a customer service program. 

http://www.salon.com/tech/log/2000/09/21/ultima_volunteers/index.html





* Y2K law not widely used *

Last year the U.S. adopted legislation to limit lawsuits related to the

year 2000 computer problem in order to save American businesses billions

of dollars in legal costs. Government investigators now report that

companies invoked the special law in court just 18 times. Compilers said

they had no way to tell how many times the law was invoked to keep cases

out of court. 

http://news.cnet.com/news/0-1009-200-2856571.html





* Who was Canada's first free ISP *

Cybersurf is suing TurboShuttle, owner of HomeFreeWeb.com, alleging it

suffered damages as a result of a claim by HomeFreeWeb that it is

Canada's first free Internet service provider. TurboShuttle has

responded with a countersuit alleging defamation and slander.

http://www.globetechnology.com/archive/gam/News/20000920/RCYBE.html





* eBay sale of autopsy pictures *

Online auctioneer eBay modified its user policy to specify the company

has discretion to remove items such as morgue and crime scene photos,

after an attempt to auction an autopsy picture and crime scene

photographs of three slain boys.

http://news.cnet.com/news/0-1007-200-2794427.html?tag=st.ne.1002.bgif.ni





* First UK online divorce*

Forty year old Paul Wilmott, a London businessman, was the first person

in the UK to complete his divorce on the internet using the service

provided by divorce-online.co.uk. 

http://www.lawzone.co.uk/cgi-bin/item.cgi?id=26084







That is all for this time,

Yedidya (Didi) M. Melchior 

Editor 



The Cyberlaw Informer

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