The cyberlaw informer #38


Welcome to the 38th issue of the weekly Mishpat Cyberlaw Informer - 

Law on the net newsletter from http://mishpat.net



This newsletter is sent only to subscribers. If you no longer 

wish to receive the Cyberlaw Informer, follow the unsubscribe 

instructions at the bottom of this newsletter.



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In this issue:



1. Introduction

2. Freedom to link v. copyrights

3. Lunney v. Prodigy Services Co.

4. Cyberlaw resource of the week

5. Computer & Internet law news and updates





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1. Introduction

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



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

this week. Last week the newsletter subscriber base passed 1,000. I'm

sure that with your help -- recommending this newsletter to your

friends, reaching 2,000 will be much faster.



This week we look at two recent rulings from the U.S., the first is a

restraining order the prevents critics of the Mormon church from

linking to sites that publish parts of a Mormon guide online, because

of alleged copyright infringement. As we will see, the ruling not only

raises questions of the "freedom to link" but also points out that

this kind of order is not very effective. The second case was first

reported last week, it is a ruling from a New York court that found

that an Internet service provider (ISP) isn't responsible for content

sent using its services.



As usual, you will find the weekly online law resource recommendation,

and plenty of cyberlaw news at the end of this newsletter.



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 1-35) is located at:

http://mishpat.net/cyberlaw/archive

Don't forget to visit the online message boards at

http://mishpat.net/cgi-bin/bbs/UltraBoard.pl and help generate some

law related discussion (any related questions, opinions and

recommendations are welcome).



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://mishpat.net/cyberlaw or by

sending an email to mailto:cyberlaw-request@mishpat.net with

"subscribe" as the subject







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

2. Freedom to link v. copyrights

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





A federal judge in Utah issued a temporary restraining order barring

the Utah Lighthouse Ministry (ULM) and its founders, Jerald and Sandra

Tanner, from listing three URLs (web addresses) that led to a chapter

of the Church Handbook of Instructions, a Mormon document that

provides lay clergy with procedures and guidelines. 



Judge Tena Campbell of the U.S. District Court in Salt Lake City sided

with Intellectual Reserve Inc. (IRI), a corporation that holds the

intellectual property assets of the Mormon Church, that charged the

ULM of contributory copyright infringement when it posted the

addresses that they knew contained handbook copies. 





The Tanners left Mormonism 40 years ago and have been critical of the

church ever since. They founded the Utah Lighthouse Ministry, and its

site offers information on Mormonism. The case began earlier this year

when the ULM posted one chapter of the Mormon Handbook and portions of

two others. The sections were posted as part of the ministry's efforts

to educate readers about Mormonism. 

IRI filed a federal lawsuit in October against ULM and the Tanners to

cease posting the handbook and distributing sections by email to

Internet users without IRI's consent. Judge Campbell issued a

temporary restraining order requiring the ministry to stop any

verbatim reproduction or distribution of IRI's copyrighted material. 



ULM removed the files from its site, and instead listed Internet

addresses of the handbook in different locations. In response, Judge

Campbell expanded the scope of the injunction and barred ULM from

posting the addresses. Judge Campbell's legal reasoning is based on a

legal doctrine called "Contributory Infringement".

First, she reasoned that anyone who went to a Web site and viewed a

pirated copy of the handbook was probably engaging in direct copyright

infringement, because that viewer's browser automatically makes a

local copy of the text. In addition, Judge Campbell reckoned that by

posting the addresses to the pirate sites after they were ordered to

take down the handbook, and by otherwise assisting people who wished

to locate the pirate sites, the Tanners were liable under a theory of

contributory copyright infringement, since they "encouraged" visitors

to browse sites that made them directly infringe the church's

copyright. 



But such an order also has its limits. ULM's site now links to several

news reports about the case. Some of these reports (such as the report

from the NY times listed below) include addresses of sites with the

infringing files, or links to other sites with links to the sites with

the files. 

Does the one extra click now needed in order to reach the infringing

sites make the link permissible? On the other hand, not allowing the

links to news stories will be too big a burden on freedom of speech.

The result is that the restraining order isn't effective. In one

sense, the case which created the discussion around the Mormon

documents just made the "secret" document reach a wider audience.





I hope that in a future issue I will have the time and space to write

about linking and contributory infringement. This issue is especially

important to search engines that link to millions of documents, and

can't verify the legality of all the files in the engine's database.





An Australian site with links to mirror sites containing the

controversial files can be found at:

http://www.xenu.netizen.com.au/lds/





Documents, including the preliminary injunction, and links to news

reports about the case can be found at ULM's web site at:

http://www.utlm.org/underthecoveroflight_news.htm





A report by the New York Times (free registration required):

http://www.nytimes.com/library/tech/99/12/cyber/cyberlaw/10law.html









                 

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

3. Lunney v. Prodigy Services Co.

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





As reported last week, in its first major ruling on privacy and

defamation in cyberspace, the New York Court of Appeals held that an

Internet Service Provider (ISP) is merely a conduit for information,

as opposed to a publisher, and consequently is no more responsible

than a telephone company for defamatory materials transmitted over its

lines. This week we take an in-depth look at this case.



The Court unanimously upheld an Appellate Division, Second Department,

decision that dismissed a defamation lawsuit brought against Prodigy

Services Co., by the father of a Boy Scout whose identity was usurped

by an unknown impostor. The impostor posted vulgar messages in the

boy's name on an electronic bulletin board and sent abusive,

threatening and sexually explicit email messages, also in the name of

the boy, to the local scoutmaster. 

Aside from resolving the specific dispute in Lunney v. Prodigy, the

Court articulated a cautious wait-and-see approach to what it clearly

perceives as an evolving body of law -- cyberlaw. 

Following is a summary of the verdict given December 2nd.



* Background *

On September 9, 1994, after opening several membership accounts with

Prodigy under slightly different variants of the name Alex or

Alexander Lunney, the impostor transmitted an e-mail message, under

Lunney's name, to a local scoutmaster. The subject line of the message

read "HOW I'M GONNA'KILL U"; the body was vulgar in the extreme. After

receiving the e-mail, the scoutmaster alerted the Bronxville police,

as well as Lunney's scoutmaster. They investigated the matter, and

readily accepted Lunney's denial of authorship, and his innocence in

this episode. 

While the investigation was afoot, Prodigy, by letter dated September

14, 1994, notified Lunney that it was terminating one of the accounts

in his name "due to the transmission of obscene, abusive, threatening,

and sexually explicit material through the Prodigy service and

providing inaccurate profile information." Lunney, for his part,

advised Prodigy that it was an impostor who, without authority, had

opened the account and sent the message. Prodigy apologized to Lunney

and also informed him that it had uncovered four more Alexander Lunney

accounts and closed them all within two days after they were opened. 

Lunney sued Prodigy, claiming, in essence, that Prodigy was derelict

in allowing the accounts to be opened in his name, and was responsible

for his having been stigmatized and defamed. During discovery Prodigy

located and produced two additional vulgar messages that appeared on

its electronic bulletin board with Alexander Lunney's name as sender

dated September 5, 1994 and September 7, 1994. 



* The email messages *

Even though it was questionable whether the messages were defamatory,

because defamation cases most typically involve communications that

directly impugn the plaintiff, while in this case the messages were

not about the plaintiff, but were ascribed to him, the court assumed

for the purposes of the opinion that Lunney was defamed by being

portrayed as the author of the foul material. 

The court noted that "e-mail is the day's evolutionary hybrid of

traditional telephone line communications and regular postal service

mail … Commercial on-line services, such as Prodigy, transmit the

private e-mail messages but do not exercise any editorial control over

them … Prodigy's role in transmitting e-mail is akin to that of a

telephone company, which one neither wants nor expects to superintend

the content of its subscribers' conversations. In this respect, an

ISP, like a telephone company, is merely a conduit. "

Following that reasoning the court concluded that: "… Prodigy was not

a publisher of the e-mail transmitted through its system by a third

party. … The public would not be well served by compelling an ISP to

examine and screen millions of e-mail communications, on pain of

liability for defamation." 



* The Bulletin Board Messages *

Judge Rosenblat wrote that "there are more complicated legal questions

associated with electronic bulletin board messages, owing to the

generally greater level of cognizance that their operators can have

over them … In some instances, an electronic bulletin board could be

made to resemble a newspaper's editorial page; in others it may

function more like a "chat room." … Some electronic bulletin boards

post messages instantly and automatically, others briefly delay

posting so as not to become "chat rooms," while still others

significantly delay posting to allow their operators an opportunity to

edit the message or refuse posting altogether."



Lunney argued that because in its membership agreements Prodigy

reserves broad editorial discretion to screen its bulletin board

messages, it should be liable as a publisher of such messages.

Prodigy, on the other hand, argued that while it reserves the right to

screen its bulletin board messages, it is not required to do so, does

not normally do so and therefore cannot be a publisher of electronic

bulletin board messages posted on its system by third parties. 



The court agreed with Prodigy, that even if Prodigy exercised its

powers to exclude certain vulgarities from the text of certain

messages, this would not alter its passive character in the millions

of other messages in whose transmission it did not participate. 



The court declined to hypothesize whether there may be other instances

in which the role of an electronic bulletin board operator would

qualify it as a publisher, and left open the possibility that under

different circumstances an ISP might be found liable for messages

published on its message boards.



* Negligence *

Lunney argued that Prodigy was negligent in failing to employ

safeguards to prevent the impostor from opening the accounts in

question. Lunney claimed that an ISP should employ a process for

verification of all applicants and any credit cards they offer so as

to protect against defamatory acts. Prodigy responded by stating that

such a duty would require an ISP to perform investigations on millions

of potential subscribers. The court, dismissing Lunney's demand, ruled

that "There is no justification for such a limitless field of

liability".



* Communications Decency Act *

Prodigy contended that the Communications Decency Act (CDA) should

govern this case by retroactive application. The CDA grants ISPs

federal immunity from lawsuits seeking to hold a service provider

liable for its exercise of a publisher's traditional editorial

functions. 

The court declined to consider the CDA because the case did not call

for it, and going beyond the necessary scope of the case can create

uncertainty or confusion. According to the court, these general

observations apply even more compellingly when dealing with Internet

law. 

"Given the extraordinarily rapid growth of this technology and its

developments, it is plainly unwise to lurch prematurely into emerging

issues, given a record that does not at all lend itself to their

determination. "



Thus the court affirmed the previous ruling in favor of Prodigy.



The full text of the ruling is available at:

http://www.law.cornell.edu/ny/ctap/I99_0165.htm







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

4. Cyberlaw resource of the week

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



This week I awarded the monthly Mishpat-Award to two sites of high

quality legal information. Because of the server change a few weeks

ago, I didn't pick a November winner, so instead there are two winners

this month. The two sites are both international resources, dealing

with two different regions.

If you'd like to review previous selected sites or apply for the

award, visit http://mishpat.net/awards





Eastern and Central European Internet Directory for Human Rights at

http://viadrina.euv-frankfurt-o.de/~w3jursok/hr/

This site is a directory of links to resources regarding human rights

issues, specifically in eastern and central Europe. Unlike other

directories, the links are not only to web sites but to specific

documents within those sites. 

The site is very easy to navigate and is organized in categories by

states, NGOs, treaties, education and more. The project is maintained

by the European University Viadrina in Frankfurt.





Excata at http://www.excata.com/

Excata is an Australian based legal, academic, professional books and

online information supplier. The site is aimed at Australian and

Asian-Pacific lawyers, libraries and researchers.

The site includes Australian commercial news, links to Australian and

Asian Pacific Region law related sites, legal publishers and services

that Exacta offers to lawyers. The main drawback of the site is that

it doesn't offer online orders or a full catalog of products.

To fully enjoy the site design you will need the Macromedia Shockwave

plugin.





If you would like to recommend an Internet legal resource, please send

it to mailto:editor@mishpat.net

You can also recommend resources at the online bulletin board

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









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5. 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.





* Naughton found guilty only for possessing child pornography *

Former Infoseek executive Patrick J. Naughton, who was arrested for

allegedly soliciting sex on the Internet from an FBI agent posing as a

13 year old girl, was found guilty of possessing child pornography.

However, the jury failed to reach a verdict on two other felony

charges that Naughton used the Internet and crossed state lines to

have sex with a minor. As reported last week, Naughton's attorneys

argued that Naughton knew he wasn't talking to a real 13 year old

girl, and that it was just 'role playing'. Naughton also claimed

that it was the FBI agent who kept pushing for a meeting. 

A sentencing hearing is scheduled for March 6. Federal authorities

will return to court January 5 for a hearing on whether Naughton will

be retried on the two other counts. 

http://abcnews.go.com/sections/tech/DailyNews/naughton991216.html





* eToys.com gets injunction against eToy.com *

A California State Court granted eToys.com, the leading online toy

retailer, a preliminary injunction against etoy.com, an international

Internet art site. As reported a few weeks ago, a simple event pushed

the parties into legal battle. On August 25, 1999, a consumer wrote

this letter to eToys.com: "My grandson was looking for toys for his

birthday and brought this to my attention. Are you completely nuts?

What an irresponsible thing to show young children. We will never buy

from you again." Attached to the letter were two pages printed out not

from eToys.com, but etoy.com. Less than two weeks later, on September

10, 1999, eToys sued etoy for trademark infringement, dilution, and

unfair competition. etoy registered its domain name on October 13,

1995, and eToys registered its own on November 3, 1997. That means

that when eToys chose its domain name, it must have been aware that

etoy existed. etoy has created a "crisis" site, www. toywar.com, about

the lawsuit. 

http://www.villagevoice.com/issues/9948/barliant.shtml

http://slashdot.org/yro/99/12/01/2156208_F.shtml





* U.S. Child Pornography law held unconstitutional *

The U.S. Ninth Circuit Court of Appeals ruled that a portion of the

Child Pornography Prevention Act is unconstitutional. The section in

question made it a crime to possess digital images or videos of people

who "appear" to be minors engaging in sexual acts, even if the

participants are youthful looking adults who appear to be under the

age of consent. In a 2-1 ruling the court found the phrases 'appears

to be' a minor, and 'convey the impression' vague and over broad and

thus do not meet the requirements of the First Amendment. A full

report about the ruling is planned for next week's issue. 

http://www.zdnet.com/filters/printerfriendly/0,6061,2411499-2,00.html





* eBay sues Bidders Edge *

eBay, the world's largest Internet auction service, has filed a

lawsuit against Bidders Edge Inc., an Internet auction search service.

Bidders' web site lets shoppers search for items at many Internet

auction sites at once, instead of having to make separate visits to

each site. Most auction sites welcome this kind of service, believing

that it will draw more visitors to their sites. But eBay, the industry

leader, doesn't want another company making a profit by offering

information listed on its' site. Two auction search companies,

AuctionRover and iTrack, have obtained licenses to include eBay

listings in a separate area on their Web sites.

The lawsuit accuses Bidders Edge of several illegal activities,

including trespassing, copyright infringement, and false advertising.

But Bidders Edge executives argue that there are hundreds of search

services on the Internet that create indexes of data stored at other

firms' sites. None of them could continue to operate if they had to

get permission from hundreds of thousands of web sites before indexing

them.

http://www.computerworld.com/home/news.nsf/CWFlash/9912142ebaylaw

              



* U.S. delays crypto export rules *

The Clinton administration has decided to delay the release of the

final version of revised U.S. export controls on encryption

technology. The new proposed date for the release of the regulations

is January 14. 

http://www.zdnet.com/zdnn/stories/news/0,4586,2408516,00.html

Meanwhile, the U.S. government has granted Network Associates Inc. a

license to export its PGP (Pretty Good Privacy) encryption software. 

The license will allow Network Associates to ship its full strength

PGP encryption software to most nations worldwide without restriction.

Exports to some countries (such as Cuba and Iraq) are still not

allowed. 

http://www.computerworld.com/home/news.nsf/CWFlash/9912131nai





* Hi-tech sweat shop *

Kamsan Mao, a Cambodian immigrant has filed suit against two Silicon

Valley companies, claiming they fired him for refusing to do extra

work at home for less than minimum wage. Mao alleges that his former

employer forced him to work at home at night and on weekends after his

daily eight hour shifts, and was paid less than minimum wage ($5 for

three hours of labor), as he built and repaired power supplies that go

into computers. 

http://www.mercurycenter.com/svtech/news/breaking/ap/docs/1184576l.htm 





* Online book stores stop selling Mein Kampf in Germany *

Barnesandnoble.com issued a statement saying it will comply with a

ruling from Germany's Justice Department and cease online sale of

Adolf Hitler's Mein Kampf to customers in that country. The German

Justice Department maintains that sale of the book is prohibited there

based on Germany's laws barring dissemination of hate literature and

propaganda. On Nov. 17 Amazon.com announced that it would halt sales

of the book. 

http://www.computerworld.com/home/news.nsf/CWFlash/9912131barnstate





* Adam.com and Drkoop.com settle *

Adam.com, a provider of online medical and health information, said it

has settled its lawsuit against Drkoop.com, a consumer health Web site

it had accused of improperly selling Adam's medical encyclopedia over

the Internet. Details of the settlement were not disclosed. 

http://news.cnet.com/news/0-1005-200-1490501.html





* U.S. judges' financial statements - not online *

APBNews.com, which focuses on crime and court stories, wants to post

financial disclosure statements of all U.S. federal judges on its web

site. The judges, however, fear the web's far reaching readership may

present security risks. Therefore the Committee on Financial

Disclosure of the Judicial Conference said it would not release the

12,580 pages of documents to APB because it violates ethics rules. The

rules require judges to be notified when someone requests a disclosure

report. 

http://news.cnet.com/news/0-1005-200-1495302.html





* Credit fraud using publicly available social security numbers *

The following story comes from APBNews.com: Three people are in jail,

charged with taking the Social Security numbers of top U.S. military

personnel off the Internet to create 700 phony credit cards. The trio

obtained the numbers from a web site that has listed Social Security

numbers of more than 4,500 military officers. Among them was the

former chief of staff Gen. John Shalikashvili. The suspects racked up

more than $37,000 in charges before they were arrested and charged

with bank fraud. The site that posted the numbers was created in 1997

by a privacy advocate who said the focus should be on the lack of

privacy laws protecting personal information, such as Social Security

numbers. All the numbers he collected were listed on government web

sites of the Congressional Record. 



http://www.apbnews.com:80/newscenter/internetcrime/1999/12/15/generals1215_01.html





* Online 'drug gang' arrested *

New York City police arrested 18 gang members on charges of selling

drugs via online chat rooms on the Internet. Police said search

warrants yielded 1,000 Ecstasy pills, steroids, crack cocaine,

hallucinogenic mushrooms, marijuana, cash and cars. The arrests,

which followed an 11 month undercover operation, marked the first bust

of an online drug ring in New York City. Gang detectives joined forces

with detectives in the computer crimes unit and used fake names to log

on to chat rooms where the alleged gang members were setting up their

drug sales. During the course of the operation, dubbed "You've Got

Jail," undercover officers bought more than 800 pills of Ecstasy.  



http://www.apbnews.com/newscenter/breakingnews/1999/11/17/drugbust1117_01.html

I want to thank Joe Mezzanini from the Cybercrime-Alerts at

http://theMezz.com/alerts for pointing out this story.





* Two men charged with Internet stock fraud *

The U.S. attorney in Los Angeles and the Securities and Exchange

Commission contend that Arash Aziz-Golshani and Hootan Melamed, both

23 years old, sent bogus messages over the Internet to pump up the

price of stock in an obscure bankrupt company. The share price rose

from 13 cents to more than $15 in less than two trading days.

Aziz-Golshani and Melamed reaped $364,000 in profits. 

According to prosecutors, the men sat down at public computers in the

biomedical library at the University of California at Los Angeles.

Using 50 different web identities they sent more than 500 messages to

three hot investment sites over the weekend, all promoting shares of

NEI Webworld Inc., a bankrupt commercial printing company based in

Dallas. On Friday, November 12, the stock closed at 13 cents a share.

But the messages sent by the men over the weekend whipped up investor

interest in the shares and the stock opened for trading the following

Monday at $8. Investors eagerly bought the shares, pushing them to

$15.50 in about a half an hour. 

http://www.nytimes.com/library/tech/99/12/biztech/articles/16online.html





* MCI - Sprint merger reviewed *

The U.S. Justice Department (DOJ) has hired Stephen Axinn, a renowned

antitrust lawyer, to scrutinize MCI WorldCom's $115 billion proposed

acquisition of Sprint. Both MCI WorldCom and Sprint have said they are

confident the deal will be approved, although industry experts have

maintained that the combined companies would need to sell Sprint's

extensive Internet backbone to win regulatory approval. MCI WorldCom

and Sprint are the second and third largest long distance carriers in

the US. The Federal Communications Commission (FCC), which will also

scrutinize the deal after the DOJ reviews the case, has already hinted

that the merger may be contingent upon the companies shedding some

assets. 

http://news.findlaw.com/Business/s/19991215/sprintfcc.html





* Microsoft lost piracy suit in China *

A Chinese court in Beijing threw out a case in which Microsoft accused

a Chinese company, Yadu Technology Group, of software piracy. The

court ruled that Microsoft had not proved it was suing the right firm,

a subsidiary of Yadu Group. Microsoft accused the Yadu Group of using

pirated products, including Microsoft Office and Windows on its office

computers. 

http://news.cnet.com/news/0-1003-200-1499350.html





* Suspect in incitement against Israel Prime minister arrested *

Israeli police, along with U.S. FBI, arrested a 20 year old Israeli,

suspected of creating an inciting web site against the Israeli Prime

minister, hosted on a server in the U.S.. It appears that Omer Kligman

is a radical left activist. He created the right-wing looking site in

order to defame right wing supporters, opposed to Prime minister

Barak's peace policy, and make them appear violent and dangerous

opponents.

http://now.nana.co.il/page.asp?storyid=1294 (in Hebrew)

I want to thank Boaz Guttman for pointing out this story.





* British ISP founders charged with fraud *

FreeDotNet, a British Internet service provider (ISP) and three of its

founders,are charged by the country's Serious Fraud Office (SFO) with

conspiracy to defraud investors. The SFO says directors of FreeDotNet

had conspired to defraud investors of four million pounds ($6.4

million) through a deceptive prospectus containing false and

misleading statements about the company's value. To make matters

worse, two of the four company directors have previous convictions for

fraud. Brian Atkins and Peter Henry, who were among the company's

founders and are named in the current action, met each other in

prison. 

http://www.thestandard.com/article/display/0,1151,8328,00.html?nl=dnt





* EU Microsoft ruling *

The European Court of First Instance, the European Union's (EU) lower

court, said the European Commission failed to consider Micro Leader

Business' allegations that Microsoft had abused a dominant position

when it took steps to prevent the French firm from purchasing lower

priced software in Canada for resale in France. The ruling could

reopen an antitrust probe in Europe. 

Micro Leader alleged in a complaint to the EU Commission in 1996,

that Microsoft had violated EU antitrust rules by banning it from

reselling French language software, effectively entering into direct

competition with Microsoft and its authorized French subsidiary. The

Commission dismissed the complaint in 1998. But the Luxembourg based

court concluded that the use of property rights to ban imports could

represent an abuse of dominant position in certain exceptional

circumstances, something the Commission had not properly assessed in

the Microsoft case. 

http://news.cnet.com/news/0-1003-200-1498328.html





* AT&T changes open access policy *

AT&T Corp. outlined its commitment to provide the online community

with a choice of Internet Service Providers for high-speed Internet

access over the company's broadband cable and fixed wireless systems.

In a radical departure from recent court cases challenging local

authority to mandate open access to their cable networks, AT&T's fixed

wireless systems will be able to serve broadband access to the ISP of

users' choice. AT&T will not extend its exclusivity contract with

cable access provider Excite@Home which is set to expire in mid 2002.

AT&T spelled out details of its commitment to open access in a letter

sent to the U.S. Federal Communications Commission (FCC).

Nevertheless, Media Access Project President, Andrew Schwartzman said

AT&T is taking a step in the right direction to open cable

competition, but that the telecommunications giant is unwilling to

discuss several criteria which are essential for insuring that cable

operators will not abuse their monopoly position to favor certain

content or business partners. 

http://www.internetnews.com/isp-news/article/0,1087,8_254611,00.html









That is all for this week,



Yedidya (Didi) M. Melchior 

Editor 





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