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The cyberlaw informer #34 - part I

Welcome to the 34th issue of the weekly Mishpat Update, 
Law on the net newsletter from

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In this issue:

Part I
1. Introduction
2. Cyberlaw resource of the week
3. Computer & Internet law news and updates

Part II
DOJ v. Microsoft - Findings of fact


1. Introduction

I would like to welcome the 32 new subscribers who joined the list
this week. 

There was lots of important cyberlaw news this week: AOL was sued by a
group of blind people for allegedly not complying with the Americans
with Disabilities Act (ADA), Intel won another round in the Intergraph
suit, and ICANN approved its agreement with Network Solutions. But no
matter how important these and other developments are, the main
cyberlaw event of the week was the publication of the 'Findings of
Fact' in the landmark case against Microsoft.

Judge Thomas P. Jackson had two important findings: 1. Microsoft
enjoys monopoly power in the Intel-compatible PC operating system
market; and 2. Microsoft used it's power to prevent competition to its
Windows operating system.
I decided to bring you a summary of the 207 page findings of fact,
but even the summary is considerably long. So this week Mishpat Update
will be sent in two parts. This first part will be in the regular
format bringing you cyberlaw news and the weekly resource but without
a feature article. The second part (that will be sent a few hours
the first) will be devoted to a special report about the Microsoft
antitrust case.
In the second part, using Judge Jackson's finding of fact, I'll try to
answer the question many have probably asked: Isn't it a good
thing that Microsoft is distributing the Internet Explorer for free
although it spends hundreds of millions developing it? As we will see
in the second part, Microsoft had a good reason to do that - stopping
the Netscape Navigator from posing a threat to ... Windows!

Comments, tips, and articles are always welcome. Send them to

The Mishpat Update archive (issues 1-29) is available at:

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 by
sending a blank email to

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2. Cyberlaw resource of the week

This week's resource is the CyberCrime Alert

Joe Mezzanini, editor of the CyberCrime alert sends up to 10
cybercrime stories every week. The CyberCrime covers topics such as
computer hacking, computer-virus alerts, computer crime arrests and

To subscribe send an email to
By visiting Joe's site and specifically the page at you can subscribe to other alerts Joe sends
out, including the Cops & Law Enforcement Alerts

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it to

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3. Cyberlaw news and updates

Each week Mishpat-Update brings you the latest news about
online and computer law, with links to the full reports available
on the web.

* AOL sued by the blind *
America Online (AOL) was sued by advocates for blind consumers who
contend that the largest Internet service provider (ISP) discriminates
against the blind because its system is incompatible with software
designed for visually impaired users. Officials of the National
Federation of the Blind (NFB) said AOL is violating the Americans With
Disabilities Act (ADA) by refusing to adapt its program to run on
screen access systems that convert electronic information into Braille
or voice based systems. The suit asserts that even though it is not a
physical place, the AOL service offers entertainment, sales, services,
recreation, education and other features, and as such qualifies as a
"public accommodation" under the ADA. The law requires businesses and
other organizations to make reasonable accommodations for people with
disabilities in order to provide them with access equal to that
enjoyed by others. 
An AOL spokesman said the company has been working to improve access
to the service. "We're sorry that the NFB has filed the lawsuit,
because we are absolutely committed to working with groups
representing people with disabilities" he said. He added that AOL had
already planned some changes in the next version that would address
some of the NFB's concerns.
(Free registration with the NY Times required)

* ICANN approves NSI deal *
At its annual meeting, ICANN, the body in charge of domain name
allocation, approved a series of agreements with Network Solutions
Inc. (NSI) and the U.S. Department of Commerce that will finally pull
the organization out of its financial troubles and establish its
authority over NSI, which had held a monopoly over the registration of
top domain names .com, .net, and .org.
As reported in Mishpat Update #29, the terms of the agreement grant
NSI control over the database of already assigned domains (Whois
database) for the next four years with an option to renew its control
for another four. In return, NSI will pre-pay 1.25 million dollars in
ICANN fees. By maintaining control over the registry, NSI will collect
a 6 dollar fee whenever a competitor registers a domain name. 
The agreements sparked a strong reaction from registrars competing
with NSI, who feel the terms create an unfair competitive advantage
for NSI. 17 of the 18 registrars present at ICANN's annual meeting
established seven issues they felt needed to be addressed in order to
create a level playing field. Some of them even threatened to sue
ICANN if it approved the agreement, but at the end a compromise was

* First domain name dispute in the Philippines *
The Philippine League for Democratic Telecommunications Inc. (PLDTI),
owner of the website address dedicated to free speech,
has been sued by Philippine Long Distance Telephone Co. (PLDT) over
the use of the site's domain name. 
The case stems from what PLDT called 'deceptive' use of the web
address. PLDT argued that Internet surfers were being 'diverted and
lured' into PLDTI's site instead of being directed to its own
corporate website at (.ph is the Philippines' top
level domain name). 
Gerardo Kaimo, who runs the PLDTI site, said he was not engaging in
unfair competition since he was not selling telephones and was not in
the telecom business. PLDTI said the case was not just a trademark
issue but also an assault on freedom of speech, since PLDTI's site 
contains material critical of PLDT. 
The case raises Jurisdiction problems because the address was
registered with U.S. based Network Solutions Inc. (NSI). The site is
hosted on a computer in the United States. It is unclear how NSI will
react to a ruling in a court in the Philippines.

* Intel wins Intergraph suit *
The U.S. Court of Appeals for the Federal Circuit overturned an
injunction in Intergraph vs. Intel that effectively held that Intel
violated sections of the Sherman Antitrust Act. Specifically, the
underlying injunction held that Intel held a monopoly in
microprocessors and, as such, could not arbitrarily cut off supplies
of chips and technical information to Intergraph. The appeals court
found that Intel has a huge market share and did in fact cut off the
flow of technology to Intergraph at crucial times. But, while Intel
may be a tough competitor, the company's conduct did not constitute
violations of antitrust law. 
The decision only applies to the injunction. Nonetheless, the court
gave a detailed analysis of Intergraph's arguments in the underlying
case and dismissed nearly all of them. The decision will likely send a
signal to the district court.

* DVD Hacked *
After the motion picture industry spent years negotiating the
encryption standard for Digital Video Discs (DVD), a group of
Norwegian hackers recently released a program, called DeCSS, that can
break the encryption on almost any DVD disk. The software that can
copy DVD movies from an encrypted disk to a PCs hard drive is now
available on various newsgroups and Web sites.

* Male - Male part II *
The author of a book titled 'You've Got Male' is suing America Online
(AOL), alleging the Internet giant is blocking access to her Web site
because the title closely resembles its e-mail catchphrase 'You've Got
Mail'. Madelene Sabol, a relationship counselor, said AOL has been
threatening her since July with a lawsuit over the title of her book.
Ms. Sabol's attorney filed a lawsuit seeking a permanent injunction
and a restraining order against AOL. As reported in Mishpat Update
#28, an AOL spokesman said the company doesn't want customers to 
be confused into thinking the book is associated with AOL.

* Newspapers win FreeRepublic lawsuit *
Newspapers won their copyright battle against A
federal court in Los Angeles enjoined Jim Robinson, the operator of a
Web site called, from posting articles copied from
the Washington Post and the Los Angeles Times. Robinson, a right-wing
activist, had set up as a forum for other
conservatives to comment on the news. To lubricate the discussion,
users of his Web site resorted to the simple expedient of copying
articles more or less wholesale from major publications and putting
them on his site with a request for reader comments. I will probably
write a full report in next week's issue of Mishpat Update.

* Haiti shuts down largest ISP *
The Haitian government decided to pull the plug on Alpha Network
Communications, one of the country's largest access providers. As a
result, thousands of Haitians have lost Internet access. The
government's official reason was that Alpha was selling international
telephone cards and providing international telephone service. But
civil rights groups claim the true reason is an attempt by the
government to silence dissent and consolidate power.,1283,32316,00.html?tw=wn19991104

* Class action over RealNetworks privacy breach *
Jeffrey Wilens from California, filed a class-action lawsuit against
RealNetworks over the privacy flaw in its RealJukebox music player. As
reported in last week's Mishpat Update, RealNetworks admitted that its
RealJukebox assigned a personal ID number to users and uploaded
information about their listening habits to its servers. The company
released a patch to disable the ID number, and said it used the data
only for personalizing the service and never sold it to third parties. 
Jeffrey Spencer, the attorney handling Wilen's case, will ask the
court for compensatory and punitive damages of 500 dollars per user in
California, an amount which could reach 500 million dollars, based on
their estimate that 1 million of the more than 16 million registered
RealJukebox users are in California.,1087,8161_235141,00.html
A similar case was filed in Philadelphia

* New Mexico anti-pornography law - unconstitutional *
In a 3-0 ruling by the 10th U.S. Circuit Court of Appeals, the court
stopped New Mexico prosecutors from enforcing a law that made it
illegal to use the Internet to send sexually explicit material to
juveniles, saying the law was too broad. The court upheld a lower
court judge who last year enjoined prosecutors from enforcing the 1998
New Mexico law after concluding that it was unconstitutional. The
lower court judge concluded the law was void because it was over-broad
and had the effect of banning speech, for adults as well as minors,
that is constitutionally protected. 
The full text of the ruling can be found at:

* Windowing Patent *
Windowing is a popular date correction method applied to Y2K (year
2000 computer bug) issues for more than a decade. Bruce Dickens was
issued a patent more than a year ago and believes the time is right
for him to reap profits as the inventor. According to an announcement
issued by Dickens' lawyers, the law firm will issue letters to Fortune
500 companies "offering a license." Companies that execute a license
"will obtain the benefit of an exceptionally modest up-front fee and
ongoing royalty rate." Companies that respond after Jan. 1 will be
charged royalties "one hundred times higher" than those who sign up by
Dec. 31. Many software applications, including Microsoft office,
implement Windowing. However, many analysts believe that companies
choosing to fight Dickens won't end up having to pay any fees since
the technique is very old, and there's nothing novel in the technology
described in the patent filing.

* UK: downloading child porn is illegal *
Three judges in the UK court of appeals ruled that downloading or
copying indecent material involving children from the internet onto a
hard disc is illegal. The judges ruled that a teacher who downloaded
images of young boys was in breach of the 1978 Protection of Children
Act, which says the making of an indecent photograph or
pseudo-photograph of a child is illegal.

* Yahoo! hit with patent suit *
Juliette Harrington, a New Zealand woman has accused portal giant
Yahoo! Inc. of infringing on a patent for online shopping software.
Harrington alleges that Yahoo! is illegally using software that allows
people to compare prices for goods and services sold over the
Internet. Harrington's software for the universal shopping cart system
was patented in the U.S. in April. The cart allows users to select
merchandise from several sites and only bill through one location.
Yahoo! Shopping uses the universal shopping cart, but the claim says
that no licensing agreement had ever been forged.,1282,32475,00.html

* Associated Press web site hacked *
A group of hackers that has been targeting the web sites of news
organizations hit The Associated Press (AP) corporate Web site Sunday
morning, defacing it with an Edgar Allan Poe poem and a Halloween
greeting. The Web site of the world's largest news gathering
organization was allegedly hacked by United Loan Gunmen (ULG), which
also is responsible for defacing the Web sites of C-SPAN, The Drudge
Report, ABC Television, NASDAQ and many other sites.

* Wall street firms sued by online trading company *
InterVest Financial Services Inc., whose online bond trading system
was suspended last year, has filed a lawsuit against eight Wall street
copmpanies, Merrill Lynch & Co. and Salomon Smith Barney. Intervest
claims that the bond trading firms intentionally boycotted use of the
Intervest's system in violation of antitrust laws. The InterVest
network, which ran from 1992 until it was suspended in February 1998,
was never able to generate the amount of trading volume needed to
sustain itself.

* Oral argument in COPA case *
A U.S. federal appeals court judge suggested that the Child Online
Protection Act (COPA) a federal law intended to shield children from
online pornography, could be fatally flawed, because it leaves open
the question of which community's standards should apply when
evaluating content. COPA, which was challenged in court immediately
after it was signed by President Clinton last year, never went into
effect. A federal judge in Philadelphia blocked it with a preliminary
injunction in February, saying it most likely violated the First
Amendment. The U.S. government is appealing the preliminary injunction
to a three judge panel in the U.S. Court of Appeals for the Third
Circuit in Philadelphia. The judges, who heared oral arguments this
week, are not expected to issue a decision in the case for several

* PainWebber sues NetRatings
PaineWebber has filed a lawsuit against NetRatings, which tracks the
online habits of more than 33,000 Internet users at home. According to
the suit, PaineWebber advised NetRatings on a proposed acquisition by
Media Metrix, its main competitor in Internet audience-measuring
services. The proposal was rejected in July by the NetRatings board,
which opted instead to sell a stake to Nielsen Media Research.
According to the suit, NetRatings failed to pay PaineWebber an
advisory fee and also breached an agreement to allow PaineWebber to be
the managing underwriter of its IPO. PaineWebber seeks 1.9 million
dollars in damages.

* CA executives order to return 550 million *
A judge ordered three Computer Associates International Inc.
executives, including Chairman and CEO Charles Wang, to return to the
U.S. software vendor about 550 million dollars out of the 1.1 billion
dollars in stocks they received in a compensation package last year.
The judge's order relates to a lawsuit filed by a number of CA
shareholders last year alleging that the company's board of directors
approved an excessive compensation package for several executives.

* School boy sues school *
15 year old Peter Ubriaco was thrown out of Albertus Magnus High
School last spring over language on his personal Web site. The boy's
family has now sued the school for 1 million dollars, saying the
teen's First Amendment rights were violated by his expulsion.

* Disney sues 3Com *
Disney Interactive, a unit of Walt Disney, sued 3Com for 15 million
dollar, saying 3Com violated a pact in which the computer hardware
maker sold Disney software with its modems. Disney Interactive accuses
3Com of failing to make payments required under the agreement.

* Entrust wins "hash-and-sign" patent suit *
In February 1999, sued Entrust Technologies for patent
infringement. The lawsuit went to trial on October 25, 1999, with
Entrust contending that "hash-and-sign" digital time-stamping
pre-existed the patent and was therefore not a true invention. After
six days of trial the jury agreed with Entrust. The jury invalidated
Surety's patent on "hash-and-sign" digital time-stamping and returned
a verdict for Entrust. "Hash-and-sign" technology enables secure

* Hackers in Singapore sentenced to jail *
Pang Soon Chen, 19, and  Tuck Whye, 22, were sentenced to jail terms
for hacking into the computer systems of Internet users and posting
their passwords on a public website. The two obtained the passwords of
SingNet and National University of Singapore Internet account holders
illegally, used some of these accounts to surf and posted some
passwords publicly on a website hosted in the US. They pleaded guilty
to the crimes.

* Microworkz sued over failing to refund customers *
Microworkz, one of the start-ups that launched the "free PC" movement,
has been slapped with a lawsuit by the Washington state attorney
general for allegedly failing to deliver timely refunds or computers
to approximately 95 consumers. The complaint states that Microworkz
violated state consumer protection laws by failing to deliver
computers or refunds to customers, failing to honor warranties, and
failing to provide promised free Internet service. Microworkz said the
problems are a thing of the past.

If you know of any cyberlaw updates, please send them to

The second part, including the special Microsoft report
will follow within a few hours.

Yedidya M. Melchior 

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