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cyberlaw informer #60


Welcome to the 60th 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. UDRP - Domain Name Disputes: Part I

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, bringing the total number of

subscribers to more than 3,000!



This issue's feature article is the first part of a new series about the

Uniform Domain Name Dispute Resolution Policy (UDRP), adopted by ICANN a

year ago. The first chapter in this series explains what domain names

are and why a uniform dispute resolution mechanism is needed. In the

next parts we will examine the specific details of ICANN's UDRP, and the

way it has been interpreted by arbitration panels.



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

sections at the end of this newsletter. 





This week I made a slight change to the message boards at

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

Now there is no need for registering before posting messages, so please

visit the message boards and post questions, answers, commentary and

recommendations.

You can access the message board directly at the above URL, or click on

the "Discuss Law" icon on the top of every page at http://mishpat.net





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. UDRP - Domain Name Disputes: Part I

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



In December 1999, the Internet Corporation for Assigned Names and

Numbers (ICANN), the body charged with coordinating, among other

functions, the domain name system, published the Uniform Domain Name

Dispute Resolution Policy ("UDRP"), intended to resolve conflicts

between trademark holders and domain name registrants. 



Until the second half of 1999, Network Solutions Inc. (NSI) was the sole

registrar of .com, .net and .org domain names. NSI's dispute resolution

policy was the de-facto rule for resolving disputes between domain

registrants and claimants (such as trademark owners) wishing to get hold

of the domain.



NSI's policy relied mainly on court decisions, i.e. the registrant or

the claimant would seek a declaratory ruling announcing  their rights

over the disputed name.



This series of articles will examine the UDRP, and see how it has

effected domain name disputes - no doubt the most litigated cyberlaw

issue - during its first year.





The first article will deal with the basic concepts - it will explain

the functions of domain names, the need for a uniform dispute resolution

process, and introduce ICANN's UDRP. The next articles will deal with

specific issues such as definition of "registration and use in bad

faith", the arbitration process, celebrities' rights to their names,

generic names, and more.







What Are IP Numbers and Domain Names

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



Just as a street address identifies the location of your home or office,

every computer or network on the Internet has a unique address too. 



Each computer that is connected to Internet is assigned an identifying

number known as an IP (Internet Protocol) number. An IP number is made

out of four numbers, each between 0-255 (for those interested in math,

this range is known a 8 bit - there are 256 ways (including 0 and 255)

to organize an 8 digit binary number - a number consisting only of zeros

and ones).



Any computer that is connected to the Internet needs an IP number in

order to interact with other computers (or even just to "become" part of

the net). Computers that are permanently connected to the Internet (such

as servers) have a static IP. Users who connect to the Internet using a

dial-up account, are each time assigned a random IP by their Internet

Service Provider (ISP) which has a pool of IP addresses.





The total number of IP numbers is more than 4 billion. However, since

many computers are assigned more than one IP number (the reason will

later be explianed);  since some of the potential IP numbers can not be

used due to the network architecture; and since many companies are

allocated large blocks of numbers, IP numbers are becoming a scarce

resource. 

A new IP addressing system called Ipv6 is intended to replace the

current system, but our interest in this article is not the IP

technicality, but IP representation by domain names.





Since the numeric addresses are difficult to understand or remember,

most people prefer using names such as yahoo.com or ibm.com instead.

These domain names act as a "front" for IP addresses. Users can reach a

web site by typing in its domain name instead of its IP, that makes it

much easier to memorize domain names (try memorizing 10 IP addresses and

then compare that to the simplicity of domain names made out of simple

words).



A software database program called Domain Name Service or Domain Name

Server (DNS) tracks the names and translates them into their numerical

equivalent so that the computers can understand what the address is and

locate the relevant computer. The information is sent to or retrieved

from the remote computer according to its IP number.



When you type the domain name of a web site, say mishpat.net (our

website), your ISP's DNS sends your request to the appropriate IP number

which is in the case of mishpat.net 208.56.15.127 and retrieves the home

page of the CNN website.



Each website that has a unique domain name has a matching IP number

(listed in the name server database). If several websites reside on the

same computer (server) - which is the case in virtual hosting when

sometimes even hundreds of sites are hosted on a single server - then

one computer could have many IP numbers, each associated with a

different domain name.

For example, even though two of my sites, http://mishpat.net and

http://CyberlawInformer.com, are hosted on the same server, each domain

has a unique IP number.





Domain names typically consist of some form of the organization's name

and a suffix that describes the type of organization, also known as a

top level domain (TLD). For example, IBM has registered ibm.com and

Kodak has kodak.com. The domain name suffix is assigned based on the

type of organization. Currently .com, .net and .org TLDs are available

for registration without any restrictions, and our discussion will focus

on these TLDs



A registrant registers a second level domain name, i.e. the name before

the TLD. He can then add third level domains (or sub-domains), without

any limitation.

For example, Yahoo!'s mail service is located at mail.yahoo.com,

Yahoo!'s GeoCities service is available at geocities.yahoo.com and

Yahoo!'s weather service is at weather.yahoo.com etc.

Since the domain holder is free to add as many domains as he wants to,

domain disputes evolve around second level domain name registration.







General and Specific Domains

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



Since domain names, just like a company's name, influence the owner's

ability to attract customers (e.g. a short name is easy to remember,

words are easier to memorize than a random selection of letters etc.),

attractive names could be priced in the millions.



One type of names are generic or descriptive names. Such names generally

describe the content, services or products offered on the site. For

example you can learn from the name Findlaw.com that it refers to a site

offers services for locating and retrieving legal information.



Since generic terms are usually not trademarked (this issue will be

dealt with in another part of this series) generic domain names are

served on a first-come  first-get basis.

Because generic names are easy to memorize - they describe what the user

looks for in plain words - domain holders who registered the names a few

years ago are able to now sell them for high prices. An extreme example

is the domain name business.com which sold for $7.5 million!!!



Bank of America bought the domain name Loans.com last January for $3

million. The banking giant said it wanted to build its online business

and hoped to start with an easy and accessible domain name. 

Loans.com was getting three to four thousand hits a day without any

advertising, simply because people assumed they would find relevant

information by typing the address loans.com in their browser. 





Another type of names are names based on the name of a company, a

product or a service. For example cnn.com, unlike news.com refers to a

specific well known news network. 

Yahoo.com, unlike search.com and portal.com, is a brand name for a

portal developed by Yahoo Inc. Even though the word "yahoo" has a

meaning in the English language, it is not used by Yahoo Inc. in that

generic meaning.

Similarly Apple computers which holds apple.com has nothing to do with

the generic word "apple" and is not in the business of selling fruit. It

uses the domain apple.com to refer to the company name and trademarks

that are all related to computing.







Cybersquatting

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



Registering a domain name is relatively cheap. A one year reservation

costs in the range of $10 - $35. Considering the potential profit from

selling a high valued domain name, no wonder net entrepreneurs try to

guess what domains might end up being expensive.



One way of doing so is registering generic names made up of one or more

plain language words, or adding letter such as e an i to well known

words (e for electronic, i for Internet, e.g. ebank.com or ibank).



However, selecting a successful domain for sale using any of the above

methods is problematic for several reasons: first, many of the high

value generic terms are taken. 

Second, finding a potential buyer is problematic since it is many times

hard to know in advance who might be interested in the name.

Third, it is not easy to determine which names will be successful, a

domain entrepreneur has to buy many domains trying o predict which will

be successful, many times loosing the registration fee and making no

sale. This is a risky and speculative trade.



This is where cybersquatting comes in, introducing a potential way to

make a "sure" profit by brokering domain names.





By registering a domain name which is identical to a well known

trademark, or based on such a name, or a misspelling of such a name,

domain speculators remove much of the risk associated with domain name

trading.



A domain name speculator does not have to wait until a potential buyer

contacts him - he can simply contact the relevant company or trademark

owner and offer to sell them the name for a nice profit.



Alternatively, the registrant can set up a web site and make a profit

from driving huge amounts of traffic to the site from people who are

looking for information about the trademarked product or service.





After reading the above description you might think that registering

domain names based on well known marks or company names is a lucrative

business. There is, however, one major problem with such registrations -

they are illegal according to trademark law, unfair competition law and

doctrines such as unjust enrichment. This is the reason for dubbing the

practice of registering domain names based on trademarks with intent to

profit from the registration "Cybersquatting".



It is important to note, and I will elaborate this point further in one

of the next articles, that not all domain registrations with intent of

profit are illegal - domain speculation in generic names that don't

infringe on any marks is permissible.





Faced with a demand from a cybersquatter, a company used to have three

options: negotiate a deal, sue for the rights to the name, or ignore the

demand.

Many companies preferred to strike deals with the squatters, since

paying a few thousand dollars for obtaining the rights to a name was

cheaper then the costs of litigation.



Other companies chose to litigate, setting the grounds for domain name

law. Most courts relied on traditional trademark and competition law

when faced with this new issue. 

In 1999 the U.S. legislator adopted the Consumer Protection

Anti-Cybersquatting Act which was intended to be a specific law dealing

with cybersquatting.





Changes in the domain name registration - opening the process to

competition and becoming more international - required a new approach

for resolving domain name disputes.







The Need for a Unified Dispute Resolution Policy

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



Opening the registration market to competition, allowing any ICANN

accredited registrar to register .com, .net, and .org domain names,

required a harmonized system of settling disputes.



If each of the more than 100 accredited registrars adopted a different

policy, registrants (including so called "cybersquatters") would go

"forum shopping". Forum shopping is a practice of choosing the most

comfortable legal environment. 

For example, if one registrar would promise never to revoke a domain

name, it would attract cybersquatters to register infringing names,

knowing that trademark owners would have to buy the rights to name from

them, since it would be the only option to acquire the name.



Another reason for harmonizing the domain name dispute procedure was the

international nature of the competitive domain name registration

process.



In the past, the sole reigstrar - NSI - was an American company

registering domains according to an agreement with the U.S. National

Science Foundation (NSF), and therefor the domain name case law was

predominantly American.



Now that current registrars are based all around the world, relying on

American case law or legislation is no longer relevant, since any

individual, company or organization, no matter where it is physically

located, can register a .com domain name. 

The same is true with registrars. Since any company that matches the

ICANN standard can become an accredited registrar, registration has

become a worldwide business.



In many cases relying on the law of a specific jurisdiction - such as

the U.S. law which previously provided most of the domain name case law,

makes no sense due to the international nature of the "players" in the

domain name business.



For example, consider a Canadian company holding a registered Canadian

trademark for "XYZ Computers" that seeks the rights to the name

"xyz-computers.com" registered by a Briton through a registration

service based in Korea.

Even if the Canadian company could overcome the jurisdictional problem

and win a Canadian court order, enforcing it and making the Korean

registrar cancel the Briton's registration and awarding the Canadian the

rights is both expensive and doubtful.



Things become even more complicated if we consider the Briton's option

of obtaining a declaratory ruling in the UK, creating a conflict between

the two rulings.





ICANN's Uniform Dispute Resolution Policy (UDRP) overcomes these and

other problems: It creates a unified legal framework - no matter who the

parties are and where they are physically located in the "real world",

they are subject to the same substantial "law", and not to laws of a

specific jurisdiction (I will discuss exceptions to this rule later in

the article). This means that there is only one law to all domain

disputes - regardless of the parties involved - forum shopping is

eliminated as well as differences in law and conflicting rulings. 

The cost of judgment enforcement (enforcing the ruling upon the

registrar) is also reduced to minimum, regardless of the parties

location and jurisdiction.



As we will see later on, choosing an arbitration process over regular

court procedures further reduces the dispute resolution process, as well

as speeding up the process.





The UDRP covers only the international top level domain names (TLDs)

including .com, .org and .net. Other limited TLDs such as .gov and .edu

can not be registered by the general public, so there is no need for a

special international dispute mechanism.





Other domains that are not covered are the country-specific TLDs. Each

country and territory has an assigned TLD, for example Norway is

assigned .no and France is identified by .fr.



The UDRP does not govern the registration of country specific TLDs.

However, most of the problems described above in association with

international domain, are reduced due to the registration structure of

the country specific domains.



Some countries (such as Canada .ca) require that a registrant be a

Canadian citizen or entity. This requirement means that domain disputes

in the .ca TLD will always be between Canadians and a Canadian

registrar, making it plausible to apply Canadian law to the dispute.



Other countries (such as Israel - .il) have only one registrar. Therefor

that registrar can set a domain name dispute policy and not risk forum

shopping. Domain registrants enter a contract with a registrar knowing

the dispute resolution process and the costs of litigation associated

with registering the domain.





Since all ICANN accredited registrars are required to include a

provision in their domain registration contracts, stating that the UDRP

will govern any domain name disputes, all domain name registrants are

subject to the UDRP.

The UDRP requires a domain name registrant to submit to mandatory

administrative proceeding if a third party (a complainant) files a UDRP

complaint





This article explained the need for a harmonized and unified system of

resolving domain name disputes. The next articles will deal with the

specific mechanism set out by the UDRP. 

First we will deal with the UDRP procedure - how are disputes resolved

and by whom. Then we will move on to exploring the actual legal

framework - who should be assigned the rights.







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

3. Cyberlaw resource review

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



This week's resource is Mega Law at http://megalaw.com



As it name indicates, Mega Law is a mega online legal resource. 

Mega Law offers an extensive directory of legal sites, legal research

tools, court rules, law associations, lawyer locator, law schools, legal

jobs and more.

While Mega Law  offers a true wealth of information, the only draw back

is that the site is very U.S. focused.



http://megalaw.com





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

=========



* Napster and BMG settle *

BMG, Bertelsmann AG's music label, reached an agreement with online

music swapping service Napster. Bertelsmann will loan Napster cash to

create a "membership-based service" and in exchange buy a piece of the

company. According to a prepared statement, the new service will

"preserve the Napster experience while at the same time providing

payments to rightholders, including recording artists, songwriters,

recording companies, and music publishers". The new service would cost

$4.95 per month.

Bertelsmann will drop out of a lawsuit filed against Napster, which is

now being heard in the Court of Appeals. Four other recording companies

aside from Bertelsmann are still plaintiffs in the suit. 

http://www.washingtonpost.com/wp-dyn/articles/A51301-2000Oct31.html





* Microsoft hacked *

Microsoft has been the victim of a computer break-in for at least a

week. The attacker did not directly enter Microsoft's computer networks.

Instead, the point of entry was an employee's home machine, connected to

the company's network. The intruder sent the initial victim a Trojan

horse program hidden within another program. The Trojan horse opened a

back door on the infected computer allowing the intruder access to that

computer. The program then searched for other machines on the victim's

network and sent the network addresses and passwords of each infected

machine to a designated Internet location. A firewall alone cannot

prevent a connection from an authorized machine that has been taken over

by an unauthorized third party.

The intruder came across the source code for a product being prepared

for future release but not part of the company's core products Windows

and MS Office. The FBI is now investigating the break-in.

http://www.zdnet.com/zdnn/stories/news/0,4586,2646402,00.html





* EU-US privacy safe harbor pact takes effect *

The compromise between the US and European Union over privacy standards

goes into effect this week. At issue is the EU's Data Privacy Directive,

which bans the transfer of personal information about European citizens

to countries that do not have adequate privacy protections.

The compromise that was reached earlier this year exempts American

companies from European sanctions if they agree to join a safe-harbor

self-regulatory program that promises European consumers basic

information about and control over how their personal data is used.

The protections contained in the pact are weaker than what would be

required under European law, but American companies are still hesitant

to join the program, since complying with those voluntarily standards

will be too costly, and if they sign on they could be pressured to also

extend those protections to their US customers. 

To gain an exemption from the directive, US companies must join

self-regulatory programs such as TRUSTe and promise to follow seven

privacy principles when handling personal data about European citizens,

including: providing customers with notice of how the information will

be handled, a choice to opt out of having the information shared with

third parties, and access to the information. 

http://www.zdnet.com/zdnn/stories/news/0,4586,2646060,00.html





* 1,491 charged in Italian online pedophilia case *

In one of the biggest trials in Italy, prosecutors charged 1,491

Italians and foreign nationals with offering or downloading child

pornography online. The huge number of people were trapped in an

operation involving a fake pedophile web site set up by Italian

authorities and Microsoft. 

http://www0.mercurycenter.com/svtech/news/breaking/internet/docs/568894l.htm





* Cybersquatter hit with $500,000 in damages *

US District Judge Berle M. Schiller ordered John Zuccarini, a "notorious

cybersquatter", to pay $500,000 in damages, after finding that Zuccarini

registered five domain names that are "confusingly similar" to the names

for sites operated by Electronics Boutique. The damages are the maximum

statutory damages under the Anti-cybersquatting Consumer Protection Act

of 1999. Zuccarini never responded to the Electronics Boutique lawsuit

and failed to appear in court.

Judge Schiller found Zuccarini's cybersquatting business earns him up to

$1 million per year. Zuccarini registered hundreds of domain names which

are misspellings of famous people's names, famous brands, company names,

television shows, and movies, and then lured Internet surfers into a

"mousetrap" in which a series of advertising windows appear in

succession. With each click on the ads, Zuccarini earns up to 25 cents.

http://www.law.com/cgi-bin/nwlink.cgi?ACG=ZZZSY7HXYEC







Intellectual Property

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



* Is SDMI cracked? *

A group of engineers at Princeton University, Rice University and Xerox

Palo Alto Research Center, claim to have defeated key elements of the

Secure Digital Music Initiative (SDMI), a music-industry effort aimed at

protecting music copyright owners from illegal copying. Many in the

recording and consumer electronics industries have lost faith in the

project, which has missed several deadlines for developing standardized

approaches to protecting copyrights. SDMI officials said that the

group's claim was premature and based on a misunderstanding of the data.

http://www.latimes.com/business/20001024/t000101561.html





* US Copyright Office issues anti-circumvention rule *

The US Copyright Office endorsed a new law making it illegal to break

the technological safeguards. The provision is part of the 1998 Digital

Millennium Copyright Act (DMCA), which makes it illegal to create or

distribute a device like a computer program that can crack the copy-

protection security code on an electronic book or a DVD movie. After

receiving comments for almost two years, the copyright office said in

its ruling that the proponents of various kinds of exemptions had not

demonstrated evidence that there would be "substantial harm" if an

exemption was not granted.

The ruling was a defeat for several groups - including universities,

libraries and computer programmers - that had argued that the law should

preserve traditional rights to archive and lend out copyrighted material

or to use so-called reverse-engineering to understand how a piece of

technology works.

http://www.loc.gov/copyright/fedreg/65fr64555.pdf





* O'Reilly and Bezos cooperate in finding wrong patents *

Technology book publisher Tim O'Reilly, who criticized Amazon's

controversial 1-Click Shopping patent, and said that "To characterize

'1-Click' as an 'invention' is a parody", went into business with Amazon

chief Jeff Bezos, funding a new site called BountyQuest, which will, pay

cash rewards to people who dig up "prior art" that helps debunk

controversial patents. O'Reilly himself offered $10,000 to anyone who

can find prior art about 1-Click... 

http://www.wired.com/news/business/0,1367,39528,00.html

O'Reilly and Amazon also have business relations in the book industry.





* PGA wins rights for online score posting *

Morris Communications, a media company, was denied a preliminary

injunction against the PGA (Professional Golf Association) Tour over

real-time score posting, and will not be allowed to sell the scores to

other media, even after those have been published online. Morris will be

allowed to post live scores from tournaments on its sites. District

Judge Harvey Schlesinger said that there is a significant difference

between reporting the news and selling the PGA Tour's proprietary

information to third parties.

http://www.newsbytes.com/pubNews/00/157154.html





* Pollstar's Gigmania suit gets go-ahead *

Pollstar, an operator of a concert information site, claims it caught

rival Gigmania pilfering content from its site, by setting a trap baited

with false information. US District Judge Robert E. Coyle rejected

Gigmania's motion to dismiss the Pollstar suit, and declined to decide

at this point whether the material Pollstar had was time-sensitive.

Gigmania claims the information is not protectable since information on

concerts is not hot news as it is announced weeks in advance. 

http://www.newsbytes.com/pubNews/00/157218.html





* MP3.com strikes music licensing deal *

MP3.com agreed to a three-year, $30 million licensing agreement with the

National Music Publishers' Association. The license would give MP3.com

the use of more than 1 million musical works for its My.MP3.com service,

and settle a lawsuit filed by the association alleging copyright

infringement of their works.

http://news.cnet.com/news/0-1005-200-3225469.html





* Chinese web site wins copyright suit *

The Beijing First Intermediate People's Court ruled that the China

Social Publishing House had infringed the copyright of Rongshu.com by

publishing articles originally created for the Web site.

http://www.chinaonline.com/topstories/001012/1/C00101107.asp





* Etrade v. E-Trade *

US-based Etrade accused the developer of a Chinese shareware program

named E-Trade Express, of trademark infringement.

http://www.chinaonline.com/topstories/001025/1/C00102401.asp







Domain names

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



* Madonna wins madonna.com *

A three-member arbitration panel ordered Dan Parisi to transfer the

domain madonna.com to pop superstar Madonna. The panel noted that the

singer had used her name and trademark Madonna professionally since

1979. The panel said Parisi had no trademark right to the name Madonna

and failed to prove legitimate interest in the domain name which he had

registered in bad faith.  Parisi is long time cybersquatter, who in the

past registered names such as wallstreetjournal.com. 

http://arbiter.wipo.int/domains/decisions/html/d2000-0847.html





* ICANN publishes TLD information *

On October 2nd 2000 the application period for those seeking to sponsor

or operate new TLDs ended. A total of 47 applications were received

during the application period. Fourty-four of these applications are

still active. ICANN extended the first public comment period until

November 5th.

http://www.icann.org/tlds/tld-review-update-23oct00.htm





* ICANN directors stay on board after deadline *

Law Professor Michael Froomkin called the original ICANN board members

"squatters" for staying on past the deadline posted in ICANN's original

charter.

http://www.newsbytes.com/news/00/157364.html





* Australian ISPs block competitor *

Australian domain name resellers took action against a competitor by

blocking Domain Name Authority of Australia's (DNA) website. A group of

resellers and ISPs accused DNA of approaching name holders whose

registrations are coming up for renewal and offering re-registration

services, a move DNA says is legal but its competitors say is unfair and

deceptive, claiming DNA is holding itself out to be an "authority".

http://www.it.fairfax.com.au/e-commerce/20001024/A2319-2000Oct23.html





* AltaVista wins 43 domain names *

WIPO arbitrators ruled that AltaVista is entitled to 43 domain names,

that are variations of its name, registered by a company with addresses

in Panama and Latvia.

http://news.cnet.com/news/0-1005-200-3336577.html







Cyber crime

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



* Disparaging web site leads to aggravated harassment conviction *

The New York Appellate Term ruled that creating an Internet site

disparaging a person, and including that individual's address and

telephone number, can result in criminal culpability for aggravated

harassment, even if the defendant did not complete a telephone or wire

communication to the victim. 

Darren S. Kochanowski was sentenced to one year in jail after he

enlisted a co-worker to design the site, which included suggestive

photographs and false statements about the sexual habits of his

ex-girlfriend. The woman received two phone calls at work, which alarmed

and frightened her. She asked the callers to provide the address of the

site and provided the materials to the police, who traced the site back

to the authors.

http://www.law.com/cgi-bin/nwlink.cgi?ACG=ZZZ85AR9LEC





* Criminal complaint against Echelon *

Ilka Schrvder, a German Member of the European Parliament, filed

criminal complaints in Germany against the international Echelon

computer surveillance network. Thought to have been created in the 1940s

by the US and UK governments, and now operated by Australia, Canada and

New Zealand too, the system is believed to monitor most voice and data

traffic circulating in most western countries.

http://www.newsbytes.com/pubNews/00/156807.html





* Former Japanese hi-tech executive arrested for abduction *

Tokyo Police arrested Masafumi Okanda, 32, the former president of

Liquid Audio Japan, an Internet music distribution company, and four

others, on suspicion of confinement of a business colleague who was

planning to start a similar company in the US.

http://www.wired.com/news/politics/0,1283,39591,00.html







Securities

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



* SEC investigates Amazon's accounting practices *

The US Securities and Exchange Commission (SEC) launched an inquiry into

Amazon's accounting practices related to Amazon's promotional

partnerships with other retailers. Although Amazon reported big numbers

for those deals, much of the revenue from the deals was not in cash, but

in equities in its partners. As the market for technology stocks

declined, Amazon was forced to renegotiate some of those deals. 

http://news.cnet.com/news/0-1007-200-3285391.html





* Australian pleads guilty in stock spam case *

Steven George Hourmouzis of Victoria, Australia, pleaded guilty to

charges of sending millions of spam emails, urging users to buy Rentech

stocks, falsely stating that the stock will jump 1000% when new patents

are released. The US Securities and Exchange Commission (SEC) also

obtained a judgement against Hourmouzis who was ordered to pay back

$15,000 in from stock manipulations profits.

http://www.newsbytes.com/pubNews/00/156946.html







Privacy 

=========



* Florida appeals court says no anonymity for online posters *

A South Florida appellate court endorsed a lower court ruling that

people posting messages on the Internet have no right to anonymity. Erik

Hvide, a former chief executive of Hvide Marine in Fort Lauderdale, is

suing 'John Does' who allegedly made defamatory statements about him.

Hvide alleges that the anonymous postings caused the stock price to fall

and the board of directors to fire him. The American Civil Liberties

Union (ACLU) says that this is simply a tactic used to silence critics.

http://www.miamiherald.com/content/today/business/digdocs/031192.htm





* TRUSTe sues over false seal *

TRUSTe, a leading online privacy program, filed a trademark infringement

lawsuit against American-Politics.com for allegedly using TRUSTe's

privacy "seal of approval" without having received approval. TRUSTe is

seeking at least $1 million in damages.

http://news.cnet.com/news/0-1005-200-3295970.html





* Matchmaker.com sued by actress *

Actress Chase Masterson, who played in series Star Trek: Deep Space

Nine, filed suit claiming that her profile was put on Matchmaker.com by

an imposter. Masterson sued Matchmaker and its parent company, Lycos,

alleging that even after she told Matchmaker about the bogus profile, it

refused to take it offline because she was not the person who originally

posted it. 

http://www.inside.com/story/Story_Cached/0,2770,13320_13_32_1,00.html







Online Speech

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



* Polak convicted of online Anti-Semitic posting *

A polish Webmaster was sentenced to a suspended 10 month prison sentence

for posting anti-Semitic messages to Radio Shalom, a Jewish radio

program's Web site. 

http://www.newsbytes.com/pubNews/00/157166.html





* ADL publishes guide to online hate symbols *

The Anti-Defamation League (ADL) published an online guide to hate

symbols, logos and tattoos to help parents and teachers identify warning

signs in their communities. 

http://www.adl.org/frames/front_hate_symbols.html





* Australian hate speech site doesn't remove postings *

The Executive Council of Australian Jewry will pursue its complaint

against offensive racist material on the Adelaide Institute website,

asking to enforce the Human Rights and Equal Opportunity Commission's

finding that anti-Jewish material posted by website controller Frederick

Toben breached the Racial Discrimination Act. Toben, who denies the

Holocaust, refused to apologise or remove the material. 



http://www.australianit.com.au/common/storyPage/0,3811,1314631%5E1285,00.html





* Laos sets harsh Internet rules* 

A Laos government committee published a notice that certain behavior and

publishing on the Internet will met by penalties including fines,

expulsion, education or prosecution. Banned activities include

incitement to protest against the government, online data theft,

pornography and publishing national secrets.

http://www.newsbytes.com/pubNews/00/157293.html





* White house won't veto filtering bill *

The White House dropped its opposition to a provision in the

appropriations bills that will require schools and libraries receiving

federal funds for computers and Internet access to automatically block

material deemed to be pornographic or obscene. The American Civil

Liberties Union, among other groups, opposes the provision as an

unconstitutional infringement of First Amendment free speech rights.

http://www.thestandard.net/article/display/0,1151,19802,00.html







eCommerce 

===========



* Microsoft's WebTV settles deception charges *

WebTV Networks Inc., a Microsoft subsidiary that provides Internet

access to more than 1 million homes, agreed to pay refunds and adjust

its advertising campaign as part of a settlement announced by the US

Federal Trade Commission (FTC). The FTC claimed that WebTV's ads did not

mention that the service is not equipped to handle popular features,

such as the ability to download music files, play interactive games,

decode pages that contain Java programming, or offer advanced e-mail

functions.

http://www.ftc.gov/os/2000/10/webtvagreement.htm





* Egghead cancels sale of wrongly listed item *

Egghead.com customers complained to the Better Business Bureau and are

considering legal action against the company after it canceled orders

for a 256MB memory module. Normally priced around $335, Egghead listed

the module at $34.85 for several hours. Egghead said their site clearly

informs customers that the company can cancel orders because of pricing

mistakes. 

http://news.cnet.com/news/0-1007-200-3221044.html





* Buy.com settles customer suit *

Buy.com agreed to pay $575,000 to settle a suit filed by customers who

attempted to buy a mistakenly priced monitor last year. During a

four-day period, Buy.com listed a 19-inch Hitachi monitor for $164.50,

$400 less than its normal list price. Buy.com agreed to honor the

discounted price for the 143 monitors it had in stock, but refused to

ship more monitors at the lower price. After paying attorneys' fees and

court costs, approximately 7,000 affected customers would each receive

about $50 under the agreement.

http://news.cnet.com/news/0-1006-200-3191999.html





* FTC publishes B2B report *

The US Federal Trade Commission (FTC) released a report stating that

while business-to-business (B2B) e-commerce raises the antitrust

concerns, B2B networks also have the potential to become a

pro-competitive market force, since they can expand the market by

bringing together more potential buyers and sellers from around the

world.

http://www.ftc.gov/os/2000/10/b2breport.pdf





* Airlines must tell phone customers that its cheaper online *

The US Transportation Department warned airlines that they must tell

consumers who made reservations over the phone that cheaper fares might

be available on the Internet. The department did not require that the

airlines say exactly what those fares would be.

http://www.nytimes.com/2000/10/21/technology/21FLY.html

(Free registration with the NY Times required)





* No power shopping in Germany *

A state court in the German city of Cologne banned the practice of

"power shopping," by which online shoppers get deeper discounts by

ordering as a group, since it violates German unfair competition law.

The ruling confirms a lower-court decision against PrimusOnline operator

of the Web site powershopping.de.

http://www.thestandard.net/article/display/0,1151,19382,00.html





* eBay suit may proceed *

Judge Linda B. Quinn, of Superior Court in San Diego County, allowed a

lawsuit striking the core of eBay's business to proceed. Six people who

say they bought autographed sports memorabilia later found to be fake,

assert that eBay, the largest online auction operator, has a

responsibility to ensure the authenticity of the sports memorabilia sold

through its site. EBay argued that it merely operates a venue for sales

and cannot be held liable for fraudulent transactions. 

http://www.nytimes.com/2000/10/16/technology/16EBAY.html





* Unlicensed HIV test sold online *

Stanley Lapides, 56, pleaded guilty to a felony charge of distributing

misbranded medical devices with the intent to mislead. He mailed 628

unlicensed HIV home tests kits to customers, from October 1997 to March

1999, without advising them the devices lacked the US Federal Food and

Drug Administration (FDA) approval.

http://www.latimes.com/business/cutting/techwr/20001026/tCB00V0808.html







Regulation

===========



* Microsoft appeals court cancels computer class *

The Court of Appeals hearing Microsoft's antitrust appeal canceled a

plan to give judges a brief tutorial about computing, fearing that the

briefing would stray into issues in dispute in the appeal, such as the

nature of operating systems and browsers.

http://www.thestandard.net/article/display/0,1151,19741,00.html



The court launched as special Microsoft antitrust site, including

judicial orders, briefs filed, and schedules. The site is available at:

http://www.cadc.uscourts.gov/ECF/Microsoft/microsoft.asp





* Indian digital law *

The Indian government framed detailed rules and appointed an official

structure under its new digital law that passed earlier this year. The

law sets out a legal framework for electronic transactions, digital

signatures and combating online crime.

http://www.totaltele.com/view.asp?ArticleID=32770&Pub=tt&categoryid=828





* Japanese cabinet approves e-documents bill *

The Japanese Cabinet approved a bill to revise 50 laws that would allow

the electronic issuance of documents related to economic transactions

among private sector firms. Under the revision, the private sector will

be able to use electronic means such as email, and CD-ROMs, provided

both parties agree to their use. 

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20001021a4.htm





* US relaxes encryption export rules *

The Clinton administration once again changed its crypto export policy,

and is now letting companies export powerful encryption programs to 23

foreign governments including members of the European Union, Australia,

Japan, New Zealand, Norway, Switzerland, Czech Republic, Poland and

Hungary. Earlier this year, the Commerce Department approved sales of

the products to businesses in those countries. 

http://www.newsbytes.com/pubNews/00/156920.html







Misc.

=====



* Email campaign frees Kurdish political activist *

Amnesty International claims that Kurdish activist Sehmuz Temel walked

free just days after Amnesty members began sending email to Turkish

authorities calling for his release.

http://www.usatoday.com/life/cyber/tech/cti718.htm





* Blind man claims Olympics site was not accessible to him *

The organizers of the Sydney 2000 Olympics will attend a hearing at the

Australian Human Rights and Equal Opportunity Commission on November 6

to assess a blind man's claim for damages, following the failure to make

the official Olympics web site accessible to blind users. 

http://www.zdnet.com.au/zdnn/stories/zdnn_display/au0006007.html





* Tobacco company sues New York state over online sales ban *

Brown & Williamson Tobacco filed suit to overturn a New York state law

banning cigarette sales via mail, phone and over the Internet, days

after the big cigarette maker announced plans to sell directly to

smokers. 

http://news.cnet.com/news/0-1007-200-3209496.html





* Microsoft looses US export taxation case *

A US Tax Court ruled against Microsoft's attempt to obtain about $16

million in tax break for software exports to overseas affiliates.

http://news.cnet.com/news/0-1003-200-3212045.html





* Toshiba Settles With US government *

Toshiba agreed to pay the US federal government $23 million to settle a

lawsuit over faulty floppy disk controllers. Toshiba also agreed to pay

the government $10.5 million in coupons for the purchase of its

products.

http://www.nytimes.com/2000/10/14/technology/14TOSH.html





* 18 workers suspended over porn emails *

Eighteen technicians at a factory in France were suspended after

pornographic email they were exchanging at work ended up in the inbox of

a female executive in the US.

http://dailynews.yahoo.com/h/nm/20001027/od/france_dc_1.html





* World Series tickets sold online for huge sums *

In an attempt to circumvent New York laws that prevent the sale of

tickets much above face value, Baseball World Series ticket holders are

selling paraphernalia on auction sites and then "adding" tickets as a

bonus. In one case, a 1992 baseball card received a bid for $2,375 since

the seller promised to add 2 tickets to game 5 of the World Series for

free. However, eBay says that even tickets bundled with other goods will

be yanked. 

http://www0.mercurycenter.com/svtech/news/breaking/merc/docs/035288.htm









That is all for this time,

Yedidya (Didi) M. Melchior 

Editor 

The Cyberlaw Informer

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