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The cyberlaw informer #40

Welcome to the 40th issue of the weekly Mishpat Cyberlaw Informer - 

Law on the net newsletter from

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. Digital audio lawsuit

3. OECD issues online consumer protection guidelines

4. Cyberlaw resource of the week

5. Computer & Internet law news and updates



1. Introduction


I would like to welcome the new subscribers who subscribed to the

Cyberlaw Informer this week. 


This is the first issue after the Y2K bug was supposed to hit. The bug

caused only minor problems to computer systems around the world, but

that doesn't mark the end of Y2K from the legal perspective. While

Cobol (a program language used mainly on old systems, that needed most

of Y2K upgrading)programers have to look for new projects, lawyers are

just beginning their part handling Y2K. Companies around that world,

that spent millions in software and hardware upgrades, might be glad

that their computers were not affected, but they will be looking for

someone -- namely software manufacturers and insurance companies -- to

pay the bill for the expensive upgrades. Several such lawsuits are

already pending, I'll keep you updated in future issues.

This week's feature article brings a summary of new consumer

protection guidelines adopted by OECD governments. These guidelines

will not necessarily lead to further legislation, as they leave the

option for industry self regulation open. 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

The Mishpat Cyberlaw Informer Archive (issues 1-38) is located at:

Please visit the online message boards at 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 or by

sending an email to with

"subscribe" as the subject

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2. Digital audio lawsuit


RealNetworks Inc., best known for software that transmits and plays

back audio and video clips over the web, is suing Streambox Inc., a

company that makes software that converts files from RealNetworks'

format into the format marketed by Microsoft. Microsoft's Windows

Media Player competes with Real Network's RealPlayer. At issue is

the "Streambox Ripper" which the company began distributing in

October. The Ripper enables users to copy compact discs to their hard

drives or to download music from the Internet, but it also has the

ability to crack the security features of RealNetworks' RealAudio

files and convert them to MP3, WAV or Windows Media formats. 

RealNetworks said that the product violates copyright law, including

the U.S. Digital Millennium Copyright Act, because it circumvents the

copyright protection measures built into RealNetworks' multimedia

files and can convert them into digital formats that can be copied,

stored and freely distributed. One issue is whether RealNetworks had

the right to sue since the material that Ripper translates is

copyrighted not by RealNetworks but by its customers, who license the

software to publish their own multimedia products. 

The complaint also contends that the Streambox Ferret (a plug-in

program designed to work with RealPlayer) violates RealNetworks'

copyright by changing the appearance of RealPlayer on the screen. 

Streambox argues that it is merely providing consumers with a choice

of services and is allowing them to choose the format in which their

music is delivered, and that the software did not circumvent systems

that require users to pay prior to downloading files. 

Last week a federal district judge in Seattle issued a temporary

restraining order preventing Streambox from developing, producing or

selling the software. The court also ordered RealNetworks to post a $1

million bond payment to cover any loss to Streambox if the court

concludes the temporary injunction was wrongfully issued. A hearing is

scheduled for January 7. 


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3. OECD issues online consumer protection guidelines


The Organization for Economic Co-operation and Development (OECD)

groups 29 member countries in an organization that provides

governments a setting in which to discuss, develop and perfect

economic and social policy. OECD countries produce two thirds of the

world's goods and services. Membership is limited only by a country's

commitment to a market economy and a pluralistic democracy. The core

of original members has expanded from Europe and North America to

include Japan, Australia, New Zealand, Finland, Mexico, the Czech

Republic, Hungary, Poland and Korea. 

OECD governments agreed on a set of guidelines to help protect

consumers in the electronic marketplace. The "Guidelines for Consumer

Protection in the Context of Electronic Commerce" approved by the

OECD's Council are designed to help ensure that consumers are no less

protected shopping online than they are when they buy offline. The new

guidelines are a result of 18 months of discussions among

representatives of OECD governments and business and consumer

organizations. The Guidelines are non-binding, but reflect existing

legal protections available to consumers in more traditional forms of

commerce. The Guidelines apply only to business-to-consumer electronic

commerce and not to business-to-business transactions.

The overarching principle of the Guidelines is that consumers shopping

online should enjoy transparent and effective protection that is not

less than the level of protection that they have in other areas of

commerce. Among other things, they stress the importance of

transparency and information disclosure; secure payment mechanisms;

fair, timely and affordable dispute resolution; privacy protection;

and consumer and business education.

Following is a summary of the new OECD guidelines.

The inherently international nature of the digital networks and

computer technologies that comprise the electronic marketplace

requires a global approach to consumer protection as part of a

transparent and predictable legal and self-regulatory framework for

electronic commerce. The global network environment challenges the

abilities of each country or jurisdiction to adequately address issues

related to consumer protection in the context of electronic commerce.

A variety of consumer protection laws exist that govern business

practices. Many OECD Member countries have begun to review existing

consumer protection laws and practices to determine whether or not

changes need to be made to accommodate the unique aspects of

electronic commerce. Member countries are also examining ways in which

self-regulatory efforts can assist in providing effective and fair

protection for consumers in that context. Reaching these objectives

requires insight and input from all walks of civil society, and all of

these initiatives should be undertaken as part of a global

co-operative effort among governments, businesses, consumers and their


These guidelines represent a recommendation to governments,

businesses, consumers, and their representatives as to the core

characteristics of effective consumer protection for electronic

commerce. However, nothing contained herein should restrict any party

from exceeding these guidelines nor preclude countries from retaining

or adopting more stringent provisions to protect consumers online. 

* Information transparency *

Consumers who participate in electronic commerce should be afforded

transparent and effective consumer protection that is not less than

the level of protection afforded in other forms of commerce.

Governments, businesses, consumers, and their representatives should

work together to achieve such protection and determine what changes

may be necessary to address the special circumstances of electronic


Businesses should not make any representation, or engage in any

practice, that is likely to be deceptive, misleading, fraudulent or

unfair. Businesses selling, promoting or marketing goods or services

to consumers should not engage in practices that are likely to cause

unreasonable risk of harm to consumers. Whenever businesses make

information available about themselves or the goods or services they

provide, they should present such information in a clear, conspicuous,

accurate and easily accessible manner.

Businesses should take into account the global nature of electronic

commerce and, wherever possible, should consider the various

regulatory characteristics of the markets they target.

Businesses should not exploit the special characteristics of

electronic commerce to hide their true identity or location, or to

avoid compliance with consumer protection standards and/or enforcement


Businesses should not use unfair contract terms. Advertising and

marketing should be clearly identifiable as such.

Businesses should develop and implement effective and easy-to-use

procedures that allow consumers to choose whether or not they wish to

receive unsolicited commercial e-mail messages. Where consumers have

indicated that they do not want to receive unsolicited commercial

e-mail messages, such choice should be respected. In a number of

countries, unsolicited commercial e-mail is subject to specific legal

or self-regulatory requirements.

Businesses should take special care in advertising or marketing that

is targeted to children, the elderly, the seriously ill, and others

who may not have the capacity to fully understand the information with

which they are presented.

Businesses engaged in electronic commerce with consumers should

provide accurate, clear and easily accessible information about

themselves sufficient to allow, at a minimum:

i) Identification of the business - including the legal name of the

business and the name under which the business trades; the principal

geographic address for the business; e-mail address or other

electronic means of contact, or telephone number; and, where

applicable, an address for registration purposes and any relevant

government registration or license numbers;

ii) Prompt, easy and effective consumer communication with the


iii) Appropriate and effective resolution of disputes;

iv) Service of legal process; and

v) Location of the business and its principals by law enforcement and

regulatory officials.

Businesses should provide accurate and easily accessible information

describing the goods or services offered; sufficient to enable

consumers to make an informed decision about whether to enter into the

transaction and in a manner that makes it possible for consumers to

maintain an adequate record of such information.

Businesses should provide sufficient information about the terms,

conditions and costs associated with a transaction to enable consumers

to make an informed decision about whether to enter into the

transaction. Such information should be clear, accurate, easily

accessible, and provided in manner that gives consumers an adequate

opportunity for review before entering into the transaction. Where

more than one language is available to conduct a transaction,

businesses should make available in those same languages all

information necessary for consumers to make an informed decision.

Businesses should provide consumers with a clear and full text of the

relevant terms and conditions of the transaction in a manner that

makes it possible for consumers to access and maintain an adequate

record of such information, including:

i) an itemisation of total costs collected and/or imposed by the


ii) notice of the existence of other routinely applicable costs to the

consumer that are not collected and/or imposed by the business;

iii) terms of delivery or performance;

iv) terms, conditions, and methods of payment;

v) restrictions, limitations or conditions of purchase, such as

parental/guardian  approval requirements, geographic or time


vi) instructions for proper use including safety and health care


vii) information relating to available after-sales service

viii) details of and conditions related to withdrawal, termination,

return, exchange, cancellation and/or refund policy information; and

ix) available warranties and guarantees.

* Online orders *

To avoid ambiguity concerning the consumer's intent to make a

purchase, the consumer should be able, before concluding the purchase,

to identify precisely the goods or services he or she wishes to

purchase; identify and correct any errors or modify the order. The

consumer should be able to cancel the transaction before concluding

the purchase.

Consumers should be provided with easy-to-use, secure payment

mechanisms and information on the level of security such mechanisms


* Dispute Resolution *

Business-to-consumer cross-border transactions, whether carried out

electronically or otherwise, are subject to the existing framework on

applicable law and jurisdiction. E-commerce poses challenges to this

existing framework. Consideration should be given to whether the

existing framework for applicable law and jurisdiction should be

modified, or applied differently, to ensure effective and transparent

consumer protection in the context of the continued growth of

electronic commerce.

Governments should seek to ensure that the framework provides fairness

to consumers and business, facilitates electronic commerce, results in

consumers having a level of protection not less than that afforded in

other forms of commerce, and provides consumers with meaningful access

to fair and timely dispute resolution and redress without undue cost

or burden.

Consumers should be provided meaningful access to fair and timely

alternative dispute resolution and redress without undue cost or

burden. Businesses, consumer representatives and governments should

work together to continue to use and develop fair, effective and

transparent self-regulatory and other policies and procedures,

including alternative dispute resolution mechanisms, to address

consumer complaints and to resolve consumer disputes arising from

business-to-consumer e-commerce, with special attention to

cross-border transactions. In implementing these mechanisms,

businesses, consumer representatives and governments should employ

information technologies innovatively and use them to enhance consumer

awareness and freedom of choice.

* Education *

Governments, business and consumer representatives should work

together to educate consumers about electronic commerce, to foster

informed decision making by consumers participating in electronic

commerce, and to increase business and consumer awareness of the

consumer protection framework that applies to their online activities.

* International co-operation *

In order to provide effective consumer protection in the context of

global electronic commerce Member countries should: 

Facilitate communication, co-operation, and enforcement of joint

initiatives at the international level among businesses, consumer

representatives and governments. And through their judicial,

regulatory, and law enforcement authorities co-operate at the

international level, as appropriate, through information exchange,

co-ordination, communication, and joint action to combat cross-border

fraudulent, misleading and unfair commercial conduct.

The full text of the OECD guidelines is available (in Adobe PDF

format) at:

I want to thank Cyberlaw Informer reader, Boaz Guttman for pointing

out this resource.


4. Cyberlaw resource of the week


This weeks resource is "Key Information Content Issues and Laws

Dealing with the Web" at

This resource offers numerous articles and presentations covering

almost any aspect of Internet law. The site isn't limited to the most

common areas of cyberlaw, such as privacy, spam, intellectual property

and jurisdiction. You will also find information about topics such as

legal aspects of online advertising, warranties, ethics, email

deletion and many more.

The only drawback is that the site navigation isn't very 'user

friendly', but that is a small problem compared to the valuable

information it offers. Articles, collections and presentations are

available in HTML and Microsoft Power Point format (.ppt). 

The site is maintained by Richard Kellett, from the U.S. General

Services Administration, Office of Information Technology, who also

suggested this resource to me. 

Highly recommended

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

it to

You can also recommend resources at the online bulletin board


5. Cyberlaw news and updates


Each week Mishpat Cyberlaw Informer brings you the latest news about

online and computer law, with links to the full reports available

on the web.

* DVD Coalition sues to block cracking tool *

A coalition of motion picture and high-tech heavyweights has sued 71

individuals and web sites, from all over the world, for allegedly

circulating a program online that lets people crack the security on

digital movie discs. DVD sellers and content providers were rocked

when, as reported in Cyberlaw Informer #34, programmers discovered a

way to remove the anti-copying features through a program called


Defendants and their supporters, including cyber rights advocate the

Electronic Frontier Foundation (EFF), noted the DeCSS program was

created using legal reverse engineering techniques and called efforts

to make the program unavailable an attack on free speech. Defendants

also say the DeCSS program is intended to make DVD movies compatible

with Linux, not to create pirated copies of movies. In addition, EFF

attacked efforts by the DVD coalition to name defendants who merely

posted links to other sites with the program. 

Last week, a Santa Clara County judge refused to stop the sites from

posting DeCSS. Judge William Elfving denied the coalitions request,

until a full hearing will be held on January 14.

A copy of the complaint can be found at:

* eToys offers to end etoy domain name battle *

Etoys Inc., the Web's leading toy retailer, said that it had offered

to drop its trademark infringement lawsuit against etoy, a European

group of online artists, reported here in the last couple of weeks. It

seems that etoy's supporters' Internet based campaign, protesting the

toy merchant's actions, was successful. Etoys, which has already won a

court order forcing the artists to stop using the Internet address, said it also was asking the group to move some of its

images to other Internet sites. A lawyer for etoy said the group would

not agree to limit the content on its web site. Etoy was forced to

stop using an address used since 1995. Etoys first put up

its site in 1997, but unlike etoy, eToys holds a U.S. trademark for

its name.

* Privacy complaint against Amazon's Alexa *

According to a complaint filed with the U.S. Federal Trade Commission

(FTC),'s 'Alexa Internet' software may violate privacy

laws. Computer security expert, Richard M. Smith, filed the complaint

saying his examination of the consumer data monitoring software showed

it gathered more personal data than Amazon tells its customers it's


* Onsale settled advertising lawsuit *

Officials with former e-commerce pioneer Onsale Inc. have agreed to

pay a $160,000 fine to settle a lawsuit by the Santa Clara County

District Attorney's office, which had accused the firm of misleading

advertising. Onsale, which recently merged with, agreed to

settle the case even  though it denied guilt, and claims it decided

that paying the fine was preferable to continuing to fight the matter

in court. 

The lawsuit accused Onsale of making misleading statements about the

money-saving features of its Internet sales program, 'Onsale atCost'.

According to the lawsuit, although Onsale promised to sell items for

essentially the same price that it paid its distributors, plus such

costs as taxes and a modest transaction fee, that's not the way it

actually worked, and  additional income or profit was hidden in the

cost of the shipping.

* Consumer data suit against Yahoo! *

A Dallas judge granted a temporary restraining order against Yahoo!,

ordering it not to publish its privacy policy until a suit, filed by

Universal Image Inc., is resolved. The suit stems from a contract

signed between Universal, which operates online as,

and Universal was to provide video content to Broadcast

in exchange for links on Broadcast's page and registration data from 

Broadcast subscribers. Universal alleges that after Broadcast was 

acquired by Yahoo!, the company cut back the amount and type of 

consumer data that it gave to Universal. The data restrictions are 

related to Yahoo!'s privacy policy, which allows consumers to control 

who may have access to its data. The suit seeks $1 billion in damages 

for breach of contract, as well as $3 billion in punitive damages. 

Yahoo! lawyers called the case "an opportunistic lawsuit seeking 

unprecedented injunctive relief in hope of extracting a King's ransom 

from Defendants." A hearing on the restraining order is scheduled for 

this week.,6061,2415155-2,00.html

* Fantasy sport lawsuit *

Yahoo! faces yet another lawsuit., an online sports

start up, has sued Internet titans Yahoo, CBS SportsLine and  ESPN,

for allegedly infringing a patent related to popular online fantasy

sports leagues. Fantasy leagues, enable fans to draft teams and

compete for points based on the performances of real players.

* North Carolina Suspends Auction Licensing *

North Carolina's effort to require online auctioneers to get licenses

is on hold while the state figures out how its old licensing laws

apply to the Internet. The North Carolina Auctioneer Licensing Board

decided to temporarily stop enforcing its recent decision that the

sellers in Internet auctions must be licensed. The North Carolina law

would require even small, at home, auction sellers in the state to pay

an annual fee and pass a state exam.

* Yankees sue fan *

The New York Yankees have slapped Brian McKiernan, a 40 year old

Yankees fan, with a lawsuit to win rights to the domain name, the official site of the Yankees is McKiernan registered the name two years ago with the

intention of building a fans' web site, and claims that he has never

offered to sell the name.

* Domain name 'high jacked' *

Last week, Hackers took over Metricom's domain name,

causing emails sent to users of the company's wireless modems to

bounce back to their senders for about 48 hours. Visitors to the web site were redirected to a pornographic site. Metricom

is a wireless communications company that makes the Ricochet wireless

modem, which allows mobile users to connect to the Internet. The

hackers forged a fake email address and fooled domain name registrar

Network Solutions into redirecting traffic to another


* Customer service firms settle legal dispute *

EShare Technologies Inc., a maker of interactive customer service

software used by companies such as American Express Corp., said it

settled a legal dispute with EIS International Inc., a small vendor

that had been reselling Eshare's software. Terms of the settlement

were not disclosed.

* Pentagon hides Y2K glitch

This weeks' issue end with a minor Y2K story. On New Year's Eve, top

Pentagon officials withheld news of a major Y2K computer glitch that

had cut access to a critical satellite intelligence system. Throughout

Friday evening, Pentagon officials told members of the news media that

the change to the year 2000 was proceeding without any problems. But

on Saturday the same officials revealed that a major computer failure

occurred shortly after midnight Greenwich Mean Time, the time standard

for many satellite systems. A ground based computer system that

processes information from a major satellite intelligence network

failed and the military lost the ability to collect data from the

satellites for a couple of hours.

That is all for this week,

Yedidya (Didi) M. Melchior 



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