cyberlaw informer #64
Welcome to the 64th issue of the Mishpat Cyberlaw Informer -
Law on the Internet newsletter from http://mishpat.net
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In this issue:
2. UDRP – Domain Name Disputes: Part V – Conclusion
3. The Cyberlaw Reader
4. Cyberlaw Resource Review
5. Computer & Internet Law News and Updates
I would like to welcome the many new subscribers who joined the Cyberlaw Informer since the previous issue.
This is the first issue of 2001. A year ago, the first issue for the year 2000 went out to just over 1,000 subscribers. This issue is sent to more than 3,500 readers, more than three times the number of subscribers last year.
Much of this growth is thanks to the many of you that have recommended this newsletter to your friends and colleagues. I want to thank you all for helping this project grow, and I want to ask you to pass this newsletter on to whoever you think might be interested and ask them to subscribe at http://CyberlawInformer.com
This issue's feature article is the last of a five part series about the Uniform Domain Name Dispute Resolution Policy (UDRP), adopted by ICANN just over a year ago. The UDRP spells out an arbitration procedure to resolve domain name disputes between domain holders and trademark owners.
In the first part we explained what domain names are and why a uniform dispute resolution mechanism is needed. If you missed that part, it is available at the online archive: http://mishpat.net/cyberlaw/archive/cyberlaw60.shtml
In the second part we examined the UDRP procedure – how to file a complaint and a response, who the arbitrators are, the timetable for resolving a dispute, etc. If you missed that part, you can find it at: http://mishpat.net/cyberlaw/archive/cyberlaw61.shtml
The third part discussed the general principles of allocating the rights for a disputed name under the UDRP. If you missed that part, you can read it at: http://mishpat.net/cyberlaw/archive/cyberlaw62.shtml
The fourth part explored special issues that arise during domain name disputes, such as the use of generic names and the freedom of speech in domain names. If you missed that part, you can read it at: http://mishpat.net/cyberlaw/archive/cyberlaw63.shtml
The fifth and final part will review and evaluate the UDRP in light of the previous articles, and recommend a few changes in the policy.
As usual you will find the recommended cyberlaw reader, the cyberlaw news and the resource review sections at the end of this newsletter.
You can recommend resources and discuss various cyberlaw topics at the message boards http://mishpat.net/cgi-bin/bbs/UltraBoard.pl
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2. UDRP – Domain Name Disputes: Part V - Conclusion
In the previous articles we examined the need for a unified domain name dispute resolution policy, and looked at the framework adopted by the Internet Corporation for Assigned Names and Numbers' (ICANN) in its Uniform Domain Name Dispute Resolution Policy (UDRP). In parts 2-4 we covered general provisions of the UDRP, and dealt with some of the special problems that arise in UDRP cases.
In this final article we will evaluate the UDRP - does it live up to expectations from it? Does it provide a fair dispute resolution mechanism? Are there any changes needed in the UDRP? Was the UDRP correctly applied by the arbitrators? And more.
The international aspects of domain names were one of the basic reasons for adopting the UDRP. The fact that the three parties involved - the registrar, the registrant, and the claimant - are in many cases located in different countries, created jurisdiction, choice of law, and judgement enforcement problems, after the registration market opened to competition in mid 1999.
The UDRP has succeeded in overcoming the international barrier. As statistical data provided by the World Intellectual Property Organization (WIPO) arbitration center shows, in more than 50% of the cases the claimant is non-American, and in almost 50% of the cases the registrant is non-American. Although the percentage of Americans in cases handled by other arbitrators (eResolution and NAF) is much higher, WIPO accounts for most of the cases and is the only internationally recognized arbitrator from the accredited dispute resolution providers.
As the use of .com, .net and .org domains becomes more international, the percentage of American parties will likely decline. Without an international dispute resolution policy mechanism, the international hurdles would be hard to overcome. The UDRP solves both the jurisdictional and the international enforcement problems.
Speed & Cost
In the first year since the UDRP process was adopted, more than 2,000 cases were filed with the accredited dispute resolution providers.
The main reason for the large number of filings is the price associated with a suit under the UDRP compared to the price of filing court proceedings. It is safe to assume that many claimants did not file a lawsuit against registrants because of the costs involved in filing a lawsuit (costs that are multiplied when international litigation is involved).
The cost of UDRP claims vary according to the rules adopted by each dispute resolution provider, but are as low as $750 per case (eResolution has the lowest prices).
The low price enables claimants that could no afford filing a lawsuit, to claim the domain in a UDRP proceeding. On the other hand, the low cost of defending registration rights (there is no cost for the registrant unless it requests a three-member panel) has enabled some registrants to successfully fight unfounded claims by large corporations.
The UDRP spells out a speedy process. According to the timetable set out by the UDRP, the panel should reach a decision within 45 days of filing the complaint. In fact, most of the proceedings are concluded within the set time, making it a much faster process than any court proceeding.
The short timetable has an important advantage for claimants, since gaining the rights faster can enable launching the planned website (or block a diluting website) without the economic damages associated with waiting months or years until a court issues a final ruling.
The UDRP cancelled the practice that was previously carried out by Network Solutions (then the sole registrar) of putting domain names "on hold" until the dispute was resolved by the courts. This meant that even if the registrant was eventually successful in defending hisrights, he was not able to use the domain name until the court issued a ruling. The UDRP cancelled the "on hold" status, and the registrant can continue using the domain until the dispute is resolved.
One of the problems that the UDRP was meant to solve was that of forum shopping. If each of the accredited registrars was free to its own domain name dispute resolution policy, registrants would choose the registrar that has the rules that give the best protection to registrants (e.g. registration would never be revoked, or jurisdiction would be given to the courts in the registrants domicile).
A unified dispute resolution overcomes this problem, but the UDRP creates a different forum shopping problem.
ICANN accredits dispute resolution providers, and those providers compete between themselves over the domain name dispute resolution market. That means that the providers have an incentive to please the "customers" of their services.
Under the UDRP, the claimant can file his claim with the service provider of his choice. This means that at least in theory, the service providers might lean towards the claimants. After all, if panels appointed by the service providers rule in favor of the claimants, more claimants would choose to file complaints with that specific service provider.
WIPO is no doubt the most popular dispute resolution provider, with more than two thirds of the market share. Part of WIPO's arbitration center's success is probably due to the fact that WIPO is a well known international organization (and as mentioned above most of the international disputes are filed with WIPO). However some statistical research shows that WIPO is also the arbitration forum that has the highest tendency to rule in favor of claimants, and that might be another factor in its popularity (especially when considering that it is the most expensive arbitration provider).
There are many checks inserted into the UDRP in order to minimize the effect of forum shopping. The arbitrators must be impartial and independent, and the provider's list of arbitrators should be made out of neutral arbitrators.
However, the service providers are those who choose which arbitrators to appoint to each case, and knowing the interpretation given to the UDRP by the different arbitrators, might appoint arbitrators with pro-trademark-owners opinions.
There have been several ideas on how to solve the problem. One option is to add an appeals procedure. This is problematic since it would add to the cost and time spent on each dispute, and undermine the fundamental goals of the UDRP. It also creates a "second layer" of forum shopping in choosing the appeals forum.
A second suggestion is that the service provider for each case would be selected randomly. This in turn would create further problems - providers would not have any incentive to be efficient, to issue timely decisions, or to reduce the costs to the parties.
A third suggestion is that instead of letting the claimant choose with which provider to file the complaint, each registrar should choose one dispute resolution provider that will decide all the disputes concerning domain names registered with that registrar.
This suggestion will no doubt eliminate the forum shopping by claimants since they will not be able to choose the service provider, but it creates several other problems.
Registrants would choose to register domain names with registrars that have a contract with a service provider known to rule in favor of registrants. That will create a reverse kind of forum shopping - registrars will race to sign up dispute resolution providers that favor registrants, since that would attract potential domain registrants.
This suggestion would also make it much harder for newly accredited service providers to gain market share, because all active registrars would already have signed contracts with other service providers.
The UDRP does not include a formal appeals process. This makes the resolution of the dispute much faster and cheaper. However, the UDRP does allow the registrant to appeal a decision against him to a court that has jurisdiction over the parties.
The appeal to a court is an attempt to balance the rights of the disputed parties. The claimant has no contractual obligation to submit himself to the UDRP process, and he can choose to file his complaint in court.
The registrant on the other hand is bound by the domain name registration agreement, and must agree to a UDRP procedure. The appeal is therefor a balancing mechanism, granting the registrant access to court.
The claimant, when filing the complaint, must submit himself to at least one of the relevant jurisdictions - the domicile of the registrar or the domicile of the registrant.
Since the claimant has an interest in limiting the registrants appeal options, he should only agree to the jurisdiction of the registrar's domicile.
This means that a registrant should prefer to register the domain name with a registrar that is located in the same jurisdiction, since that ensures that if he looses a UDRP claim, he can file a lawsuit in a court in his jurisdiction.
As with almost any legal text, many provisions of the UDRP can be interpreted in different ways.
For example, the UDRP does not suggest that attempts to sell a generic name eliminates the registrant's legitimate interest. However, several panels ruled that domain name brokering, even of descriptive names, is not a legitimate interest and could be considered bad faith use.
The power to interpret is the arbitrators' greatest power. Panelist that favor trademark owners' rights will interpret "legitimate use" narrowly (thus limiting the use by registrants that do not hold registered trademark rights) while giving "bad faith" a broad interpretation.
On the other hand, panelist that believe that free trading of generic names should be allowed, well give the opposite interpretation.
In the previous two articles we reviewed several controversial decisions, in which panelists ruled in favor of generic trademark owners. These panels ruled against the registrants of crew.com and esquire.com.
As I explained in part IV, I believe these (and other) decisions are wrong, as they contradict basic notions of trademark law, and strengthen the rights of generic-descriptive trademark owners.
It should be noted that most panels ruled in favor of the registrants in similar situations (e.g. magic.com).
A similar problem arises in cases involving domain names that are made out of, or that include, geographical locations. While most panels upheld the rights of registrants, other panels (e.g. barcelona.com) ruled that registering a domain name corresponding to the name of a geographical location was not legitimate.
Another problematic issue concerns domain names of celebrities that do not hold a registered trademark for their name. In several cases, arbitrators ruled that the celebrity has "common law" trademark rights in their names. The decisions relied on British and US law. This means that in other situations, where a specific country law can not be applied, a different result would be reached. This in turn reduces the harmonization attributes of the UDRP.
There are many other issues that were interpreted differently by panels. For example, while some panels ruled that auctioning generic names was a legitimate interest, other panels disagreed.
Some panels ruled that a registrant was entitled to use a domain name corresponding with a trademark for a site critical of the trademark owner, other panels ruled that such use is bad faith use and the registrant has no legitimate interest in the name.
Amending the UDRP
The above interpretation problems are a main factor in the forum shopping phenomena. If several interpretations are legitimate and possible, a claimant will choose the forum that applies the rules in the most favorable manner from his point of view.
Contradicting decisions are also harmful in other aspects.
A legal framework must provide a stable an unified dispute process. If the results are arbitrary, it undermines the fairness of the process and the legitimacy of the system.
A coherent system is also necessary for the effective use of domain names. If registrants and trademark owners can not predict the outcome of many cases, it will lead to over litigation, since parties are not sure what their rights actually are. It might also lead to "reverse-hijacking" complaints by trademark owners that know that there is a chance they will win even if they are not entitled to win according to the UDRP.
An unstable system might also deter potential registrants from registering domain names, if they face an undefined risk of loosing it, and to a wrong allocation of resources..
As noted above, most of the suggestions to solve the forum shopping problem, would probably lead, if adopted, to the creation of a new set of problems.
I think that the solution lies in amending the UDRP. The UDRP is a fair compromise between the competing interest in the domain name market. But, as any legislator that is not pleased with the way courts interpret its legislation, ICANN should also refine its "legislation" - the UDRP - when faced with troubling decisions handed down by arbitration panels.
In my opinion, the UDRP offers a good balance between the competing rights, but there are a few changes that would prevent decisions such as those reached by the majority in crew.com and esquire.com.
For example, the UDRP could include a presumption of good faith in registering, using and trading generic trademarks.
The panels in esquire.com and crew.com reasoned that the registration was in bad faith since the registrant had "constructive notice" of the trademarks, and therefor his registration was in bad faith since it was done in spite of knowing about the trademark.
A presumption of good faith would eliminate the constructive notice problem. Under the good faith presumption even if the registrant has actual notice of the trademark, it is not bad faith to register a corresponding generic domain name. As any presumption, it can be proven wrong in any specific case, but the burden of proof is on the claimant.
This special 5 part series covered basic and advanced issues regarding the UDRP. It discussed the needs for a harmonized international system for resolving domain name disputes, and the specific structure of the chosen solution.
Comparing the goals to the outcome, it seems that the UDRP is a much better and effective solution than most of us believed a year ago. Thousands of resolved disputes show that the need for a global dispute resolution mechanism was well answered by the UDRP. In addition, most UDRP commentators agree that the vast majority of decisions are correct.
However, there have been several troubling rulings, some of which were discussed in this series.
There is no legal system that produces "perfect" outcomes - the need for interpretation will always lead to different views regarding the correct reading of the legal text, and different concepts of fairness result in differing opinions about the right balance between competing interests.
Legal texts can not predict nor cover all the possible scenarios, and can therefor not spell out in advance the desired solution for each case.
The solution adopted by almost all legislators is continuously amending the relevant laws, in order to address new situations, or overrule interpretations by courts that the legislator disagrees with.
Amending and updating the UDRP should be one of ICANN's tasks as the governing body, administrating the domain name market.
Personally I think that there are no major changes needed in the UDRP, but there is no doubt a need for clarifying several issues, especially those regarding the use of generic names.
I enjoyed researching and writing this series. Your comments are always welcome, send them to email@example.com
ICANN's UDRP, Rules, and related documents:
Using ICANN's UDRP: Library, From Harvard University
3. The Cyberlaw Reader
Each issue of the Cyberlaw Reader links to new articles related to cyberlaw and online legal research. Your recommendations are welcome, send suggestions to mailto:firstname.lastname@example.org
* Japanese Law via the Internet *
By Makoto Ibusuki
Ibusuki, an Associate Professor of Law at Kagoshima University, Japan, introduces the limited Internet resource available to people who want to get Japanese legal information through the web.
* What is the Uniform Computer Information Transactions Act (UCITA)? *
By Daniel W. Uhlfelder
UCITA is a set of US laws that applies to contracts for software and other transfers of computer information. This article explains the importance of UCITA and how it could affect your contracts.
* Unmasking Internet Bad-Mouths Plaintiff's right or First Amendment wrong? *
The article describes the process a lawyer goes through when trying to unmask the identity of online critics.
4. Cyberlaw resource review
Work.com is a center for professional workers, and covers more than 30 industries, including of course the legal profession, along with many relevant industries such as banking, hi-tech, insurance, real estate and more.
From the home page, there are three law related sections.
The Business guide (center column) includes the category "law". This section leads to a directory of links based on data from the Open Directory Project. The ODP data is integrated in many sites (including Google and Lycos) but is used on work.com in a different way.
The plus side is the "Editors Choices" section that selects the best sites in each category. The downside is that many links from the ODP are not included in the work.com directory.
The second relevant section is Legal "how to guides" (left column on the homepage). Most of the information in this section is from partners such as FindLaw and Lawoffice.com.
The third (and most important) section is the law industry center (right column on homepage). This section includes legal news, interviews, and articles (including a few from the Cyberlaw Informer...), events calendar and more.
The site is very user friendly and easy to navigate. The site does currently not offer much original content, and relies heavily on content providers. Some more original content or services would make it an even more valuable resource.
There are two factors making it a good resource for getting your legal news and other information:
1. The content is well integrated, and at times even easier to access then at the originating sites.
2. The legal industry is not isolated. Each one of us has interests in other industries, depending on the area of practice. Work.com is a great solution since it letsyou get your updates in one place. The personalization feature (MyWork) lets you create your own personalized page, with the information form the industries relevant to you.
Highly recommended http://work.com
If you would like to recommend an Internet legal resource, please send the details to mailto:email@example.com 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
The Cyberlaw Informer brings you the latest news about online and computer law, with links to the full repavailable on the web.
* Yahoo bans Nazi memorabilia *
Responding to international pressure from anti-hate groups and foreign law enforcers, Yahoo announced that, effective Jan. 10, Yahoo will no longer allow items that "promote or glorify hatred and violence" to be listed on its auction sites.
Although Yahoo announced that it would stop hosting auctions of Nazi and KKK paraphernalia, it will continue fighting a French court's ruling requiring the company to keep hate-oriented content away from French Internet users. Yahoo filed a lawsuit in the US seeking declaratory a ruling that the French verdict can not be enforced.
* Court rules that port scans not necessarily illegal *
A U.S. district court in Georgia ruled that port scanning a network does not damage it or threaten public health and safety. Judge Thomas Thrash found that the value of time spent investigating a port scan can not be considered damage. A port scan is a remote probe of the services a computer is running. While it can be a precursor to an intrusion attempt, it does not in itself allow access to a remote system. Port-scanning programs are used by both Internet outlaws and cyber security professionals.
* Movie industry gets setback in DVD case *
The California Supreme Court ordered a lower court to show why defendant Matthew Pavlovich should remain in the case brought by the movie industry over the DeCSS software, even though he is not a California resident.
The suit targets Linux software known as DeCSS that defeats the security software on DVD-formatted movies. The code was posted on the Internet in October 1999 by a 16-year-old Norwegian student and quickly spread across the Web. The case, along with a similar one in New York, hold significant implications for free speech as well as reverse engineering.
* German goes to jail over domain theft and blackmail *
The German District Court of Munich convicted a cybersquatter, who had registered 22 Internet domains with the intention to sell them to the respective trademark owners or other interested parties. He was found guilty of trademark infringement and blackmail, and was sentenced to one year and 10 months imprisonment.
http://www.jurpc.de/rechtspr/20000228.htm (In German)
* First Y2K claim ruled in favor of insurance companies *
Justice Charles E. Ramos of State Supreme Court in Manhattan ruled that Xerox Corporation lost any right to pass on expenses incurred avoiding Year 2000 computer problems to the American Guarantee and Liability Insurance Company, because it waited too long, working for three years and spending $138 million before notifying the insurer. Justice Ramos wrote that Xerox's delay had deprived American Guarantee of the chance to examine Xerox's hardware and software to determine how much work was needed, if any, before it was carried out.
* Industry makes concessions on anti-piracy technology *
After an outcry from privacy advocates, a group of leading computer hardware makers agreed to give consumers the right to turn off a new copy-protection feature on computer hard drives. The technology would prevent consumers from making copies of music or movies without the permission of the record label or studio that holds the rights.
* BT sues Prodigy over hyperlink patent *
(BT), which earlier said it had discovered that it owns a US patent for the invention of the hyperlink technology, sued Prodigy Communications for patent infringement. BT held similar patents in other countries but they have expired. The U.S. patent does not expire until October 2006. Many doubts have been raised as to the validity of the patent.
* Napster sues over trademark *
Napster sued online retailer Sport Service for wrongfully using its trademark, by allegedly selling T- shirts and caps with Napster's cat-design trademark.
* Coolsavings.com settles patent dispute *
Coolsavings.com settled a lawsuit against rival marketing firm IQ.com. IQ.com acknowledged the validity of Coolsavings' patent and agreed to pay a royalty to license the electronic coupon technology.
* NetZero Sues Juno *
NetZero, a free Internet service provider, sued one of its competitors, Juno Online, accusing it of infringing a patent on the way such services display advertising to Internet users. Meanwhile, NetZero is a defendant in a patent infringement lawsuit filed by Juno alleging that NetZero has infringed a Juno advertising patent.
* ACTV sues Disney over patents *
Interactive television technology company ACTV Inc. sued Walt Disney Co. alleging the entertainment giant's ABC and ESPN broadcasting arms' sites infringe on three ACTV patents.
* Dutch PC maker sues Dell *
Tulip Computer International, a Dutch PC maker, sued Dell over alleged infringement on one of Tulip's patents for a specific motherboard design.
* Microsoft pirate pleads guilty *
Mario Stacchini, 31, pleaded guilty to attempted trademark counterfeiting of $2 million worth of counterfeited Microsoft products.
* MPAA sues for online bootleg sales *
The Motion Picture Association of America (MPAA) sued Antonio Daniele, 20, for selling pirated movies online.
* eBay looses French domain name *
A French court ruled that Forum On The Net, the registered owner of the domain eBay.fr, may keep it. eBay, which currently operates its French site under ebayfrance.com, is appealing the decision.
* Pfizer lost Viagra domain in China *
U.S.-based Pfizer Inc. lost its attempt to protect the name "Viagra" from being registered as an domain name in China. The Beijing No. 2 Intermediate People's Court ruled that the name "Viagra" is not sufficiently well-known in the country to be specifically associated with Pfizer, nor is the name registered as a trademark.
* NBA loses Knicks.com *
The merchandising company for the National Basketball Association (NBA) lost its claim to the domain name Knicks.com. A WIPO arbitrator ruled that NBA Properties failed to prove it had the rights to trademarks relating to the New York Knicks basketball team, although it handles merchandising for all the NBA's member teams.
* Fight over .biz *
The Atlantic Root Network has asked the US government to resolve a dispute with the Internet Corporation for Assigned Names and Numbers (ICANN) over who has the rights to the .biz global top level domain (gTLD). Atlantic Root, says it has been using .biz domains since May and is upset at ICANN's decision to allow JVTeam to start issuing .biz domains.
* Snapnames to protect your name *
SnapNames.com launched a suite of domain name protection services. The site's Snap-Back service protects domain registrants from known perils including domain name hijacking, employee sabotage, accidental deletion, and cancellation due to failure to renew.
* NY Times wins newyorktimes.com *
The publisher of the New York Times won the rights to the domain newyorktimes.com. A WIPO arbitrator ruled that the New York Times is a world famous trademark to which the registrant, New York Internet Services, cannot credibly claim to have been unaware.
* Time Warner wins Harry Potter domain names *
* Australian domain self regulation gets go-ahead *
The au Domain Administration (auDA) received official Australian Government endorsement as the appropriate body to control administration of .au domain names.
* FirstNET sues Nike *
Scottish ISP FirstNET sued Nike claiming unpaid fees in connection with the hijacking of Nike's domain name. FirstNET claims it had to handle over 1.25M requests during a 46 hour period.
* Chinese Tide domain ruling appealed *
Beijing Tiandi Electronic Group appealed the ruling of Beijing No. 1 Intermediate People's Court, which ruled in favor of Procter & Gamble Co. (P&G) and granted it the rights to the domain tide.com.cn.
* Jail terms for spam scam *
Steve Shklovskiy and Yan Shtok, both 23, were sentenced to 2-year prison terms for sending a 50 million emails as part of a scam asking recipients for a $35 processing fee in exchange for a chance to work at home stuffing envelopes.. The two men must also pay more than $100,000 in restitution.
* Egghead.com and customer data stolen *
Egghead.com confirmed that hackers gained access to its 3.7-million-customer database, and potentially stole credit card data. Egghead uses Microsoft's Internet Information Server (IIS), a common e-business server known to have had many security flaws.
* Coolio pleads guilty *
Dennis Moran, 18, who went by the name of 'Coolio', pleaded guilty to breaking into rsa.com, operated by security company RSA Security, and dare.com, an anti drug site connected to the Los Angeles Police Department. Under a plea agreement, Moran will serve nine months to a year in jail and pay $5,000 in restitution to each victim.
* Indictments over eBay fraud *
George Arthur Cruz of California was arrested and charged with 13 counts of mail fraud and one count of money laundering. Cruz is accused of defrauding eBay members out of about $76,000 by auctioning items but never delivering them to bidders.
Federal officials also indicted Hen Ben-Haim in a similar case. Ben-Haim, still at large, is accused of defrauding more than 200 eBay members out of about $32,000.
* Hong Kong teenage hacker sentenced to 6 month in jail *
Choi Kong-lam, 19, was sentenced to six months in a detention center in Hong Kong for causing the network of a leading local Internet service provider to crash.
* Electric company hacked *
The US National Infrastructure Protection Center revealed that unknown hackers hijacked an electric company's servers, using its computers to host and play games.
* Nasdaq sites hacked *
Just one day after malicious hackers broke into the Nasdaq Stock Market server and replaced its Nasdaq-100 Index page with a lewd message, Nasdaq's sister site in Japan was hit with a similar attack.
* Hacker reveals ISP data *
A hacker angry at the activities of GlobalCentral.com, a Wyoming Internet service provider, released customer information including names, credit card numbers, and bank account numbers.
* Malaysian parliament hacked *
A hacker attack on the Malaysian parliament's Web site and wiped it out. The hacker's efforts went unnoticed for days.
* Judge stops web porn billing scam *
New York Southern DistriJudge Lewis A. Kaplan enjoined Verity International Ltd., a company that operates a billing service for Internet pornographers, from billing telephone line subscribers who neither used, nor authorized the use, of their lines to reach adult sites. Verity is accused of charging users international call rates for local calls to porn sites.
* Internet company accused of getting pain for "independent" stock reviews *
The US Securities and Exchange Commission sued Westergaard.com for accepting kickbacks for publishing supposedly "independent" analysis of publicly traded stocks.
* MicroStrategy execs find *
The US Securities and Exchange Commission fined MicroStrategy's CEO, former CFO and another top exec $350,000 each for their company's questionable accounting practices. The software vendor itself doesn't have to pay. The three executives also will contribute a total of $10 million worth of MicroStrategy stock as part of a separate resolution of shareholder suits filed against the company.
* Class action suits against PSINet dismissed *
U.S. District Judge LeonieM. Brinkema dismissed 14 class-action lawsuits accusing PSINet Inc. of securities fraud but allowed certain allegations in another complaint to proceed. PSINet's stock lost more than 95% of it value since March 2000..
* Judge stops investment scam *
A US federal judge ordered a halt to an alleged scam that lured doctors to invest in a Florida Web hosting firm. The company placed advertisements in widely circulated publications such as the New England Journal of Medicine. The company did not disclose that 62 percent of the funds raised would be paid to the principals and telemarketers.
* Internet investment scam operator to pay back $500,000
California US District Court Judge Virginia A. Phillips ordered a pair of bogus Internet investment partnerships to pay back close to a half million dollars it bilked out of investors who thought their money was being used to help develop and an Internet mall. In reality, the owner of the two companies used most of the money to pay salaries for himself and his wife.
* InfoSpace exec sues for options *
John E. Richards, vice president of merchant services for online content at InfoSpace, sued the company saying it reneged on a promise to give him more stock options than any other employee. The lawsuit cites similar allegations by six other top executives at the Internet portal. Two of those cases were settled for a combined $15 million.
* OSC shuts online services *
The Ontario Securities Commission extended temporary orders that shut down four Internet services it says broke securities laws. The OSC has alleged that the four men were not registered to give advice or offer securities, and in some cases failed to file prospectuses for their offerings.
Privacy & Spam
* Clinton issues new medical privacy rules *
US president Bill Clinton announced a set of privacy protections covering medical and insurance information. The new rules require that health plans and health-care providers protect all medical records and individually identifiable information.
* AOL sues spammers *
America Online (AOL) sued a company that owns and operates pornographic sites, accusing it of sending junk email to AOL members.
* Health info goes to wrong doctors *
Health Net, the third-largest health insurer in the US, violated patient confidentiality by accidentally emailing the names of 12,000 patients to the wrong doctors.
* ACLU to challenge filtering law *
The American Civil Liberties Union said it will challenge a new law that requires libraries to use the software to filter out Internet material deemed offensive to minors. The ACLU claims the law amounts to federal censoring of the nation's 16,000 libraries.
* China tightens Net control *
China has made it a crime to use the Internet to promote Taiwan's independence, organize cults, slander of individuals and corporations over the Internet, create and disseminate computer viruses, break into national defense networks, tamper with personal email accounts, and spread rumors to manipulate stock prices. Establishing porn sites or linking to them are also criminal activities.
* eBay targets offline deal makers *
eBay is cracking down on offline business deals between its buyers and sellers that circumvent the fees normally paid to the online auction company.
* Texas sues tobacco e-tailer *
Texas attorney general sued online tobacco merchant E-Commerce Today Ltd. alleging the e-tailer failed to take precautions against tobacco sales to minors in Texas.
* Yahoo and sports gambling ads *
The PGA Tour, the professional golf tour, asked Yahoo to remove advertisements for online sports bookmakers on golf pages. The PGA is the fifth sports league to make such a demand. The National Hockey League, the National Football League, the National Basketball Association and Major League Baseball have asked Yahoo to remove gambling-related ads from their pages on the company's site.
* Bidland sues Telefonica *
Bidland Systems, a Californian Internet auction service developer, filed suit against Spain's Telefonica and its US subsidiary, alleging Telefonica obtained complete access to Bidland's proprietary business-to-business information and technology, and then launched its own venture using Bidland's proprietary knowledge. Bidland is claiming $500 million in restitution, or fulfillment of its agreement with Telefonica.
* Comedian counter sues Z.com *
One day after Z.com sued Chris Rock, the actor and comedian struck back with his own lawsuit against the online entertainment provider. Rock claims Z.com and its parent Idealab! prolonged discussions between them in order to keep Rock's famous name associated with the site as long as possible.
* Historical document auction barred *
In a contest over who owns an artifact of New Jersey's history, a judge temporarily barred the Internet auction of a ledger documenting slave emancipation in Burlington County as far back as 1785.
* Bankrupt e-tailer can resell its lease *
Judge Richard L. Bohanon from the federal Manhattan bankruptcy court, ruled that Boo.com North America, a unit of the bankrupt British online fashion retailer, could keep the proceeds of the resale of its lease for a 9,054-square-foot space.
* Standard for making US federal sites accessible to the disabled *
The US federal government published standards for government sites to be made accessible by people with disabilities. Federal sites must comply with the standards by June 21, 2001. For example, pages that use pictures as navigational aids for sighted users must also make text equivalents available as aids to blind users who may use text-to-speech devices to navigate.
* NTT warned oveblocking DSL *
Japan's Fair Trade Commission (FTC) warned telecom giant NTT East Corp. to stop hindering the efforts of rivals to provide high-speed Internet access through digital subscriber lines (DSL).
* Microsoft faces discrimination lawsuit *
Seven current and former Microsoft employees filed a discrimination suit against the computer software maker alleging racial bias in evaluations, compensation, promotions, wrongful termination and retaliation.
* Workers fired for sending sexual email *
Five police officers in the Australian state of New South Wales lost their jobs after an internal investigation found there was widespread "inappropriate" use of the police email system.
Computer Associates (CA) fired at least 10 employees for sending sexually explicit email over the company network.
Royal and SunAlliance, a British insurance company, fired 10 people and suspended at least 75 more over a lewd e-mail showing cartoon character Bart Simpson in sexual activity.
* Y2K bug strikes a year late *
The Y2K computer glitch hit Norway's national railroad company a year later than expected. None of the company's new 16 airport express trains or 13 high-speed, long-distance trains would start early in the morning of Dec. 31.
Convenience stores operated by 7-Eleven were hit by a Y2k-like glitch when the cash registers at its stores identified the date as Jan. 1, 1901, instead of the correct one. That temporarily left the company's main systems unable to process credit card transactions.
That is all for this time,
Yedidya (Didi) M. Melchior
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