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The cyberlaw informer #41

Welcome to the 41st 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. Search Tip

3. Open Law

4. Cyberlaw resource of the week

5. Computer & Internet law news and updates



1. Introduction


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

Cyberlaw Informer this week. 


This week's feature article takes a look at the 'Open Law' project,

that is an attempt to incorporate ideas from the 'Open Source'

software movement in the practice of law. A special feature in this

issue is a search tip, that I hope will help you navigate through long

online documents. As usual, you will find the weekly online law

resource recommendation, and plenty of cyberlaw news at the end of

this newsletter.

As I finished editing this newsletter I learned of the settlement in

the Caldera-Microsoft antitrust suit (not to be confused with the more

famous U.S. government antitrust lawsuit). According to first reports,

Microsoft will pay Caldera $155 million, for allegedly using

anti-competitive practices. I'll give you a full report next week.

I hope you enjoy reading the newsletter. Comments, tips, and articles

are always welcome. Send them to

The Mishpat Cyberlaw Informer Archive (issues 1-40) 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. Search tip


As some of you might have noticed, I have added a small search engine

to the archives at 

The search option will hopefully help you locate previous articles and

news you need for your research, just keep in mind that while the

search engine will point you to the location of the desired issue, you

will still have to read through the entire newsletter in order to find

the specific news item requested.

This is where our search tip will help you: When you open a long

document in your browser, you can choose from the menu bar "Edit->Find

in Page" (Netscape) or "Edit->Find (on This Page)" (Microsoft Internet

Explorer). A small search window will open, in which you can enter the

search term. The search will take you directly to the first place the

term appears on the page, you can continue searching down the page and

find other instances in which the term appears. Windows users can also

access this function by pressing the Ctrl+F buttons on the keyboard.

The search function is a browser feature, so it isn't dependent upon

the web site setup. This means you can use this technique on any web

page with a long text. Enjoy!


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3. Open Law


Many of you have heard of the "open source" software movement. Open

source software is changing the rules by which we're used to playing.

Traditionally, software developers restrict access to source code (the

code that makes the application function). In the case of open

source, the software and its source code are free. Users can not only

use the programs without paying royalties, they can also modify the

program and redistribute it to others. 

Open source applications are becoming widely available, especially

Internet related software, thus changing both business models and

intellectual property protection methods. For example, numerous web

sites (including the Mishpat.Net site) run on Apache, an open source

web server program, that delivers web pages to Internet browsers. 

Linux, an open source operating system runs on many web servers and

millions of personal computers. Some analysts see Linux as the biggest

threat to Microsoft's Windows operating system.

The open directory, at, is a collaborative effort by

thousands of editors, that have created one of the largest directories

on the net. Open Directory data is used in several large sites

including and as well as in numerous smaller

sites (including Mishpat.Net).

There are several reasons that open source has become so popular and

that so many Internet companies and users are involved in open source

projects. Some do it for the community spirit; others out of

self interest - incorporating knowledge and work of others in their

projects. Open source creates a win-win situation, because both

developers and users benefit from it. Users get free software, that

can be adjusted and customized to specific needs, without the

restriction usually imposed in more traditional software contracts.

Developers benefit from the the help, knowledge and work of thousands

of volunteers that help improve the product.

Now the phenomenon of open source comes to the practice of law. The

"Open Law" project, at adopts the open source model

in drafting legal documents. The open law forum is a project conducted

by the Berkman Center for Internet & Society, a cyberspace research

program at Harvard Law School. 

Open law is an experiment in crafting legal arguments in an open

forum. Open law members (registration is free) develop arguments,

draft pleadings, and edit briefs in public, online. Non lawyers and

lawyers alike take part in the process by: adding thoughts to the

"brainstorm", drafting, commenting on drafts in progress, and

suggesting reference sources.

Open law assumes that an open development process best harnesses the

distributed resources of the Internet community. By using the

Internet, public interest can speak as loudly as the interests of

corporations. The "cost" of this open work is the loss of secrecy,

opponents can read all documents during the drafting process. But the

potential gain is much greater, bringing together legal minds from

all over the world, in a joint effort to create better arguments,

founded upon a greater variety of resources and ideas, and well

drafted documents.

Currently, the open law project is working on three cases. The first

Open law case, Eldred v. Reno, challenges the Sonny Bono Copyright

Term Extension Act, in which the U.S. Congress granted a 20 year

extension of the term of copyright protection. In the second case,

Intel v. Hamidi, the open law project is helping to represent Ken

Hamidi, a former Intel employee, against trespass charges for his

sending of unsolicited email to Intel employees. The third case, in

which the project is currently involved, is assisting four

Massachusetts communities in a legal battle with AT&T over open


You can join in the effort, read the current documents, join the

discussion forums or just visit and learn more about the project at


4. Cyberlaw resource of the week


This week's resource is the Industry Standard's weekly Net Law report.

The Industry Standard at is a well know

source, in print and online, for timely information about the Internet

economy and news analysis. 

The Standard offers several weekly and daily email newsletters,

covering various aspects of the online world. Recently, the Standard

added a weekly newsletter (delivered every Monday), written by John

Roemer, covering law news on the world wide web (or as John puts it:

"Report on the Law Shaping the Wild, Wild Web").

Every issue includes a feature article, giving an in-depth review of

one selected cyberlaw news item, a few short reports and reference to

to other law news stories.

John does not only send news reports to his readers, he also generates

discussions and brings readers' thoughts. In the "File your opinion"

section, John asks a weekly question such as "Should Net businesses

get different legal treatment than brick-and-mortar firms?" and

"Should the U.S. government trust American e-commerce to export

encryption products?". Readers' responses are published in the next

weeks' issue.

You can subscribe to the Net Law report, as well as to other great

Standard newsletters (such as the Intelligencer Europe - European

Internet news, and the Analyst Bullpen- a Roundup of Internet industry

experts' opinions) at

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.

* Hacker stole credit card details from online music store *

The U.S. Federal Bureau of Investigation (FBI) is trying to track down

a hacker who posted customer credit card information, stolen from

online music seller CD Universe Inc., after the retailer refused to

give in to an alleged extortion attempt. The FBI shut down the site

posting the credit details after being alerted by CD Universe. The

unknown extortionist demanded $100,000 from CD Universe, in return for

not posting the credit card information. The hacker claims he had

obtained more than 300,000 customer credit card files, but only 32

were posted on the web site.

eUniverse, which owns CD Universe, acknowledged that a portion of its

customer data had been stolen. The company said it had notified the

FBI after the hacker attempted blackmail. The company said it was

alerting customers and working with the credit card companies to help

those customers whose card numbers had been stolen. There is no

evidence yet that the hacker actually broke into CD Universe's

systems. The hacker could have obtained the data from an inside source

who copied the database onto a floppy disk and then sent it to the


* California anti child pornography law ruled unconstitutional *

Judge John Minney, a Contra Costa County Superior Court judge,

declared unconstitutional a California Penal Code section that makes

it illegal to transmit sexual material over the Internet if the person

sending the information knows the recipient is a minor. Judge Minney

found that Penal Code violated the First and Fourteenth Amendments as

well as the commerce clause.

* Swedish teen not guilty of music piracy *

A 17 year old Swede beat the international music industry when he was

cleared in court of illegally downloading recordings from the

Internet. The London based International Federation of the

Phonographic Industry (IFPI), which represents 50 record companies

around the world, had brought the case against the youngster, alleging

that he downloaded hundreds of songs from the Internet and distributed

them free of charge over the Internet.  But judges ruled that the

accused had not profited from the operation and had only maintained

links to illegal copies, and didn't make the files available on his



(cut and paste both lines of the URL)

* Chinese authorities tighten Internet control *

Police in Shanghai have told corporate Internet users to register

themselves, in a Chinese nationwide drive to increase control over the

Web. Companies that fail to register could face fines of up to 50,000

yuan ($6,000).

* Sec files charges against 'Tokyo Joe' *

The U.S. Securities Exchange commission (SEC) filed charges against

Yun Soo Oh Park, operator of the stock advice web site 'Tokyo Joe'.

The SEC's complaint charges that Park defrauded users who paid $200 a

month for his day trading advice. The SEC claims Park recommended that

his customers buy stocks and hold them until they reached a specific

target price, thus driving up their value. Then, while customers raced

to buy the shares, Park sold his. The SEC also accused Park of

accepting shares in exchange for recommending specific stocks.

Park is being charged with violating the Investment Advisors Act,

although he has not registered as an investment advisor with the SEC.

This raises the issue of online stock gurus: Should self proclaimed

experts, participating in chat rooms, discussion groups or building

their own sites, be governed by the same rules as traditional

investment advisors?

* 845 non complaint domain names to be revoked *

A software mistake has allowed 845 domain names to be incorrectly

created, because the software failed to disqualify addresses which

include trailing dashes. Five registrars who didn't properly

implement filtering software that rejects incorrect domain names,

allowed the creation domains such as and abc-com.

Network Solutions, the leading registrar, said the registry doesn't

permit addresses to be listed with trailing dashes because some

protocols, such as FTP (file transfer protocol) don't recognize those

trailing dashes. According to the Internet Corporation for Assigned

Names and Numbers (ICANN, the body supervising domain name

registration), registrars have the right to revoke any addresses that

don't comply with its standards.

* RealNetworks sues to stop privacy lawsuits *

RealNetworks Inc. filed suit to stop consumers' lawsuits that claim it

violated privacy laws by accessing information from users' computer

hard drives without permission. Several lawsuits have been filed

against RealNetworks after it was revealed that the company's

RealJukebox program secretly transmitted information about what songs

compact disc users were playing and downloading. RealNetworks claims

that according to a licensing agreement that governs the relationship

between RealNetworks and its customers, any disputes should be settled

through arbitration. The suit claims that consumers must accept the

terms before installing any RealNetworks products.


(cut and paste both lines of the web address)

* settles FTC charges * agreed to a settlement with the U.S. Federal Trade

Commission (FTC) over charges that the company violated consumers'

privacy and disseminated spam email messages to customers of rival

auctioneer eBay. ReverseAuction has agreed to cease from engaging in

unlawful practices, to destroy any personal information gathered from

eBay customers without their permission and to refrain from

misrepresentations in the future. 

eBay filed charges with the FTC in November, claiming had violated its user agreement and privacy policy

when it allegedly collected personal information of many eBay users

after registering on the site. According to the FTC, ReverseAuction

sent emails to eBay customers with a message promoting its own online

auction site and wrongly informed eBay users in the subject line that

their eBay user identification number would soon expire. Many of the

registered users assumed that the continuation guarantee was the

result of a formal agreement between the two auction sites. However,

ReverseAuctions said the marketing e-mail was merely a campaign for

its "portability program", which allows auction players the ability to

use the same ID and password on multiple sites. 

Although ReverseAuction agreed to settle the case, it denied any

wrongdoing, and said it entered into the consent agreement in order to

proceed with a pending round of financing. eBay said it had filed suit

against ReverseAuction because the company was unauthorized to

access eBay's Web site, had engaged in misleading business practices

and had damaged eBay's reputation.,1087,4_277301,00.html

* sued over Alexa privacy breach *

Joel D. Newby, who says he has used Alexa software since 1998, claims

the software sent confidential information to, which bought

Alexa last April, without his consent. Newby sued and its

Alexa Internet unit, and requests class-action status. The suit seeks

$1,000 per class member in damages; it is estimated that millions of

users around the world are using Alexa. As reported last week, a

similar complaint against Alexa was filed with the U.S. Federal Trade

Commission (FTC).

* Pseudo Programs sued over sexual harassment *

The web entertainment broadcaster Pseudo Programs and its founder Josh

Harris were sued for sexual harassment by a former employee who claims

she was fired after complaining of a hostile work environment in which

women were called bimbos and were denied fair and equal treatment. The

suit is seeking $3 million in damages.,1151,8618,00.html

* IRS eases online advertising "middlemen" reporting *

The U.S. Internal Revenue Service (IRS) issued an interim rule that

will ease the tax reporting burden for "middleman" organizations that

arrange the barter of banner ads on Web sites. The rise of web

advertising has brought in companies dealing with thousands of web

sites and organizing swaps of millions of banner adds daily, each of

which may be worth only a fraction of a cent. The IRS recognized that

the old requirement to report on each such transaction would place an

impossible burden on such companies.

* Pentagon to recruit hackers *

U.S. Air Force General, Richard Myers, who will soon become vice

chairman of the Joint Chiefs of Staff, said in a Pentagon briefing

that cyber tactics should take their place in every commander's

arsenal. Myers said such “keystroke” attacks would have the advantage

of limiting both U.S. casualties and harm to a target nation's

population. Among the policy issues that still need to be worked out

is the potential blurring of the line between military and civilian


* Microsoft looses another round in temporary employees stock suit *

The U.S. Supreme Court rejected Microsoft's appeal of a ruling that

thousands of temporary and contract workers were eligible to buy

discounted stock in the software giant. The class-action suit, filed

in 1992, claimed that Microsoft treated temporary and contract workers

as permanent employees except for compensation. The lawsuit sought

millions of dollars in gains from the employee stock purchase plans,

which offer workers the opportunity to buy Microsoft stock at a 15

percent discount. The lawsuit's eventual outcome could have widespread

implications for many other companies that use temporary workers or

independent contractors, a common practice, in the technology


* EMC passes U.S. antitrust review *

Storage maker EMC Corp. got closer to completing its $192 million

purchase of Softworks Inc., after it successfully passed a U.S.

antitrust review process. Softworks offers enterprise data and storage


* French proposal to adopt open source software

A proposed French law adopting open source software as the official

state standard has been rewritten, following the French Senate's

experiment with electronic discussion forum. The Proposal calls for

the establishment of the Free Software Agency, to oversee the process

of transformation and standardization. It is intended to supervise the

implementation of the law, to determine the which software's use is

permitted, and to determine the areas in which applications qualifying

under the law aren't available (and hence where ordinary commercial

software will still be permitted).

* Teen Magazine sues pornography site *

Publishers of the Teen Magazine, a 42 year old youth publication,

recently discovered that someone else had been using the Teen Magazine

name as an Internet address for a pornographic web

site. Attorneys for the magazine won a temporary restraining order

against Blue Gravity Communications barring them from operating the

lewd site. The lawsuit claims that Blue Gravity used

the trademarked name in "bad faith" under the Anti-Cybersquatting Act.

The lawsuit seeks an unspecified amount in damages plus a permanent

court order forbidding Blue Gravity from using the domain name. Teen

Magazine has its own Web site under the address

* Lucent goes after *

In a similar case, Lucent Technologies, the telephone equipment giant,

filed suit to stop the use of the protected "Lucent" trademark in the

name of a pornographic web site. The suit claims the "Lucentsucks" 

confuses customers into thinking the site is associated with the

company. The site offers pornographic photographs and services and

infringes on Lucent's trademarks, the suit claims.

* Naughton faces retrial *

Former Infoseek Corp. executive Patrick Naughton faces a retrial on

charges that he traveled across state lines to solicit sex with a

minor and used the Internet to set up the meeting. Naughton was

convicted of possessing child pornography, however, the same jury

deadlocked on charges that he crossed state lines to solicit sex with

a minor and used the Internet to set up the meeting, causing Judge

Rafeedie to declare a mistrial on those two charges. During the

mistrial, Naughton claimed he thought the person he was corresponding

with was an adult because so many people role play in chat rooms.

Nearly half the jury believed that defense, and the panel was unable

to come to a unanimous agreement on the two counts during three days

of deliberations. But jurors were convinced that Naughton knew about

the child porn found on his computer after his arrest. Naughton

remains free on bail.,4586,2417667,00.html

* Activist group fights online child porn *

In mid December, security professionals formed, an

activist group dedicated to "eradicate the existence of child

pornography, pedophilia, and exploitation on the Internet". 10 days

later, Condemned claimed to have "eradicated" more than 20 kiddie-porn

servers through legal channels. Members have also hacked into more

than 13 servers overseas and erased their hard drives. Condemned has

gathered support from a half dozen Internet service providers, Web

development and security companies in Australia and the U.S.. 

The intention of the site, is to make it simple for

Internet users to report offending URLs to the site by filling out a

simple online template. Condemned then pushes the information forward

to law enforcement agencies. But Condemned also takes action of its

own. Volunteers notify server administrators of the illegal material

stored on their machines' hard drives. When neither administrators nor

law enforcement responds, Condemned resorts to hacking. A few

Condemned volunteers have taken out 13 sites outside the U.S. this

way. According to some experts, such attacks, in addition to being

illegal, may be counterproductive. 

An Interesting article about Condemned is available from Computer


* China denies Windows 2000 ban *

China denied it had banned Microsoft's Windows 2000 operating system

from government computers. The announcement came after an official

newspaper said the government had barred Windows 2000 to support

the domestic software industry. The Yangcheng Evening News said

government departments would be ordered to use "Red Flag-Linux", a new

operating system developed by a government think tank and based on the

Linux operating system. Windows 2000 is scheduled for release in China

in March.

* OSHA withdraws telecommuters rules *

The U.S. Occupational Safety and Health Administration (OSHA) said it

was withdrawing a letter written to a Texas company outlining that

firm's responsibilities and liabilities regarding employees who work

at home. Secretary of Labor Alexis M. Herman said that while the

letter clarified questions about telecommuters raised in 1997 by CSC

Credit Bureau in Houston, it caused "widespread confusion and

unintended consequences" for other companies. In its response to CSC

Credit Services, OSHA had offered an interpretation of the 1970 OSH

Act, saying that firms that allow employees to work at home are

responsible for injuries suffered by those workers. However, many

businesses and professional organizations, as well as members of

Congress, thought OSHA overstepped its bounds when it said that

employers could be responsible for correcting a home's design,

ventilation and heating and cooling systems, if those systems

presented a danger to the employees while working.

* Y2K fix patent will be reexamined *

The U.S. Patent and Trademark Office Commissioner (PTO), Todd

Dickinson, ordered a review of a patent related to a popular

Y2K fix. The computer software patent, "Date Formatting and Sorting

for Dates Spanning the Turn of the Century," is owned by Californian

Bruce Dickens. In November, Dickens sent some 700 letters to Fortune

500 and Information Week 500 companies, saying he owned the patented

windowing technology many of them were using to head off Y2K problems

and that he wanted royalty payments for use of the process. The patent

was granted in 1996 to the McDonnell Douglas Corp., Dickens' employer,

but was later assigned to him. Infuriated companies that were using

windowing technology in their Y2K solutions charged that it was known

of and used long before the PTO issued the patent.

That is all for this week,

Yedidya (Didi) M. Melchior 



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