law bookstore
cyber law updates
Cyberlaw News
Mishpat Legal Information Discuss law
Discuss Law
updated legal news
Legal News

cyberlaw informer #44

Welcome to the 44th 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. Zeran Looses again

3. New jurisdiction ruling

4. 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 brings the story of Kenneth Zeran, a man

involved in one of the landmark online law rulings, Zeran v. AOL. Last

week, Zeran was handed his second defeat, bringing to an end his legal

battle against publishers of an anonymous online defaming posting.

We will also look at a new jurisdiction decision, giving another view

about the question what country/state law applies online. As usual you

will find many cyberlaw items in the last section of this newsletter.

Due to the length of this issue, the Cyberlaw Resource section does not

appear this time. It will be back next week.

This week the Cyberlaw Informer was mentioned as one of the sites of the

week in the Free Webmaster Tools newsletter at

In the previous issue we brought news about Disney’s Go Network round

loss in a copyright suit brought against it by The U.S. 9th

Circuit Court of Appeals barred Go from using its “traffic light” logo,

which is similar to Goto’s logo, until the end of the trial. Cyberlaw

Informer reader Inbar Ben Tsion pointed out the full, very interesting

ruling, which is available at


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

are always welcome. Send them to

The Mishpat Cyberlaw Informer Archive (issues 1-41) 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

--------- sponsor message ----------


FreeShop is the starting point for online shopping, featuring thousands

of free and trial offers. Free samples, trial issues, demos, coupons,

catalogs, trial periods, and product information. is a leading online direct marketing network. Learn about

or try new products, and choose from a variety of free, trial and

promotional offers from hundreds of well-known companies.

--------- sponsor message ----------


2. Zeran Looses Again


Kenneth M. Zeran, whose name will be forever linked to one of the

seminal cases in Internet law, has been handed another defeat in his

five year legal battle to seek redress for an online hoax. The U.S.

Court of Appeals for the 10th Circuit rejected all of Zeran's claims

against the owner of a radio station which, Zeran contended, recklessly

publicized a bizarre cyberspace prank against him. This probably marks

the end of one of the most important cases in the short history of


Zeran was the victim of a malicious hoax. In the immediate aftermath of

the bombing of the Alfred P. Murrah Federal Building in Oklahoma City, a

posting appeared on an Internet bulletin board announcing the

availability for sale of "Naughty Oklahoma T-Shirts," bearing such

slogans as "Visit Oklahoma -- it's a Blast." The posting was made by

someone using the screen name "Ken ZZ03 " and indicated that the shirts

could be ordered by telephone. The number provided was Zeran’s business

telephone number.

Zeran had nothing to do with the posting. He is a 52-year-old artist,

photographer, and film maker. America Online ("AOL")  provided the

unique screen name "Ken ZZ03" to an individual whose true identity

remains unknown, as the account was opened with false information.

Ken ZZ03 opened up at least two more AOL membership accounts with false

information, adopting similar screen names (Ken ZZ033 and Ken Z033) and

posting increasingly offensive items for sale, always providing the

Plaintiff's telephone number. The first posting appeared on April 25,

1995, six days after the bombing. On that same day, the Plaintiff began

receiving nasty and threatening phone calls.

* Zeran v. AOL *

Upon learning of the postings, Zeran, who is not an AOL user, notified

AOL that he was not involved and asked AOL to delete the postings, and

take steps to prevent his phone number from appearing in any future

postings. AOL declined to help and the postings remained on the Internet

for at least a week.

In November 1997, a federal appeals court ruled that under a provision

of the federal telecommunications act, AOL (along with all Internet

Service Providers) was immune from being sued by Zeran -- or anyone

else -- over material on its system that was created by a third party,

even if it had been informed that the material was false and hurtful.

Zeran v. AOL has become one of the cornerstones of cyberlaw granting

immunity to ISPs. Many legal scholars believe that this decision gave a

boost to free speech online by eliminating the liability of Internet

service providers for the third-party information they host. Thanks to

their immunity, ISPs are less likely to monitor and censor that

information posted on their servers.

The decision in Zeran v. AOL has become part of almost any syllabus of

computer law courses around the world.

* Zeran v. Diamond Broadcasting Inc. *

Defendant in the second case, Diamond Broadcasting Inc., owns KRXO, a

classic-rock radio station in Oklahoma City. An AOL member sent an email

containing a copy of the original, April 25th posting to one of KRXO's

on-air personalities, Mark ("Shannon") Fullerton, one of the "Shannon &

Spinozi Show” hosts. Before beginning his shift on May 1, Shannon

unsuccessfully attempted to email Ken ZZO3 through AOL, but received a

pop-up message informing him that the addressee was not a known AOL

member. He did not attempt to call the telephone number on the posting,

purportedly because it was before business hours.

Shannon then went on air, discussing the posting, reading the slogans,

and reading Zeran's telephone number. Shannon urged his listeners to

call Ken ZZ03 and tell him what they thought of him for offering such

products. On that day, Zeran received approximately 80 angry,

obscenity-laced calls from the Oklahoma City area, including death

threats. Although most of the callers hung up before Zeran had an

opportunity to speak, he was able to learn that the posting had been

mentioned on KRXO. Zeran called KRXO and asked that KRXO broadcast a

retraction, which it did.

Based on the broadcast, Zeran sued Diamond Broadcasting for defamation,

false-light invasion of privacy and intentional infliction of emotional

distress. He claimed that by failing to verify the information in the

AOL posting, KRXO harmed his reputation and caused him personal anxiety.

The district court granted the Defendant's motion for summary judgment

on all claims. The appeals court agreed, and rejected all of Zeran’s


Following is a summary of the court’s reasoning, affirming the summary

judgement in favor of Diamond Broadcasting.

1. Defamation.

Defamation is defined by statute in Oklahoma as a false and unprivileged

communication that:

“… or (5) by its natural consequences, causes actual damages.”

Evidence of special damages is consequently required. The appeals court

affirmed that emotional distress is not a form of special damages, and

Zeran's de minimis (of no consequence) medical expenses, consisting of

one visit to his physician and one prescription drug purchase, are

insufficient to support the cause of action. The appeals court ruled

that although Zeran suffered an injury, the district court correctly

found that he did not suffer an injury to his reputation, which is the

essence of an action for defamation. Zeran’s defamation claim failed

because he did not show that any person thinks less of him, Kenneth

Zeran, as a result of the broadcast. There was no evidence that anyone

who called his number in response to the postings or the broadcast even

knew his last name. In other words, under the facts of this case, there

was an insufficient link between Zeran's business telephone number and

Zeran himself for him to have sustained damage to his reputation. After

all, no one in Oklahoma City who heard the broadcast knew Zeran, and no

one in Seattle who knew Zeran heard the broadcast.

2. False Light Invasion of Privacy.

Under Oklahoma law:

“One who gives publicity to a matter concerning another that places the

other before the public in a false light is subject to liability to the

other for invasion of his privacy, if  … and  (b) the actor had

knowledge of or acted in reckless disregard as to the falsity of the

publicized matter and the false light in which the other would be


“Reckless disregard” is a high standard of fault, higher than the

“Negligence” standard. In order to establish reckless disregard, the

Plaintiff must demonstrate actual knowledge of probable falsity.

Zeran or any of his witnesses could not possibly have had personal

knowledge concerning the relevant question, namely, whether Shannon had

an actual subjective awareness that what they were repeating on the air

was probably false. For this reason, the appeals court affirmed the

district court's dismissal of the claim.

3. Intentional Infliction of Emotional Distress.

Oklahoma recognizes intentional infliction of emotional distress

("IIED"). One who by extreme and outrageous conduct intentionally or

recklessly causes severe emotional distress to another is subject to

liability for such emotional distress, and if bodily harm to the other

results from it, for such bodily harm.

The court ruled that the conduct on which Zeran's claim was based -- the

commentary of a radio talk show host concerning an offensive

advertisement that appeared on the Internet, even if that host failed to

first verify that the information contained in the advertisement was

accurate -- does not compare to the kinds of conduct that have sustained

IIED claims.

The appeals court agreed with the district court, that the evidence

Zeran submitted failed to show that the level of distress he suffered

was sufficiently severe to be actionable. This Court noted the lack of

evidence showing that the distress interfered with Zeran's ability to

conduct his daily life affairs.

The case ends as another defeat to Zeran, but the questions raised will

be debated for a long time. What should the journalistic standards be in

the Internet age? And what should be the limits to ISPs immunity?

It should be noted that under the U.S. Digital Millenium Copyright Act

(DMCA) ISPs are granted immunity for third party copyright infringement

(infringing files hosted on the ISP’s servers) when adopting a “safe

harbor” policy. This policy requires that the ISP remove infringing

files in some circumstances. A similar limitation on immunity does not

exist for defaming postings.

The bottom line for Zeran is that the courts ruled that he had no right

to recover damages from KRXO, or AOL. The person Zeran should sue is the

one who posted the messages on AOL, and that person, unfortunately,

remains anonymous.

The full text of Zeran v. Diamond Broadcasting Inc. can be found at:


--------- sponsor message ----------


The Ultimate Comparison Shopping Engine  Select any book, CD or movie.

Then let DealPilot check prices, shipping costs and delivery times of

the requested item from all major Internet stores!

Your guide to the best deals on the web DealPilot is not an online

store, that is DealPilot

does not sell any products itself. It only guides you to the best online

stores where you can order if you like.

--------- sponsor message ----------


3. New Jurisdiction decision


Jurisdiction remains one of the basic questions of cyberlaw. The global

nature of the Internet raises three questions: Whose law applies to

online activity; Where does that law apply; and Who is subject to that


Last month a Michigan judge gave his answer to these questions, by

asserting jurisdiction over a Seattle resident, based on the man's web


Amway Inc. filed suit against Proctor & Gamble and Sidney Schwartz,

alleging tortious interference with contract and with actual and

prospective business relations. Schwartz, who is a resident of the State

of Oregon, filed a motion to dismiss for lack of personal jurisdiction

by the Michigan court.

Following is a summary of the decision by Judge Robert Holmes Bell,

denying Schwartz's motion to dismiss the lawsuit against him.

The Due Process Clause in the U.S. constitution requires that the

exercise of personal jurisdiction in each case comport with traditional

notions of fair play and substantial justice. According to the court,

fair play exists if "the defendant purposefully avails itself of the

privilege of conducting activities within the forum State ... such that

it ... should reasonably anticipate being haled into court there."

Under Michigan law, a court may exercise limited personal jurisdiction

over an individual for actions arising out of "the doing or causing an

act to be done, or consequences to occur, in the state resulting in an

action for tort."

Schwartz didn't enter the State of Michigan nor did he conduct any

business in the State of Michigan. Instead, Amway (the plaintiff)

asserts that the subject matter of the lawsuit arises out of or is

related to Schwartz's contacts with the forum, based upon the fact that

Schwartz's actions caused tortious consequences to occur in Michigan.

Amway claimed that Schwartz's maintenance of the internet web site

entitled "Amway: the Untold Story," was intended to and did cause

consequences in Michigan, sufficient to constitute the necessary minimum

contacts with the forum state. The site posts information about Amway

that Schwartz collected, and e-mail responses from those who have

visited the web site. As any other Internet site, it is accessible to

people in every state and all over the globe.

In deciding what type of Internet activity is sufficient to establish

personal jurisdiction in a particular forum, the court the "sliding

scale" approach set forth in Zippo v. Zippo Dot Com, an Internet

jurisdiction case from 1997:

"The likelihood that personal jurisdiction can be constitutionally

exercised is directly proportionate to the nature and quality of

commercial activity that an entity conducts over the Internet. ... At

one end of the spectrum are situations where a defendant clearly does

business over the Internet. If the defendant enters into contracts with

residents of a foreign jurisdiction that involve the knowing and

repeated transmission of computer files over the Internet, personal

jurisdiction is proper. At the opposite end are situations where a

defendant has simply posted information on an internet web site which is

accessible to users in foreign jurisdictions. A passive web site that

does little more than make information available to those who are

interested in it is not grounds for the exercise of personal

jurisdiction. The middle ground is occupied by interactive web sites

where a user can exchange information with the host computer. In these

cases, the exercise of jurisdiction is determined by examining the level

of interactivity and commercial nature of the exchange of information

that occurs on the web site."

The court noted that if jurisdiction were based upon a defendant's mere

presence on the internet, a defendant would be subjected to jurisdiction

on a worldwide basis and the personal jurisdiction requirements as they

currently exist in the offline world would be eviscerated. Accordingly,

in each case where personal jurisdiction has been exercised, there has

been "something more" to indicate that the defendant purposefully

(albeit electronically) directed his activity in a substantial way to

the forum state. The court ruled that "something more" may be satisfied

by the "effects doctrine." In tort cases, jurisdiction may apply if the

defendant's conduct is aimed at or has an effect in the forum state.

Judge Bell ruled that allegations that a defendant intentionally

directed its tortious Internet activities at the forum state are

analyzed under the "effects test" that requires the plaintiff to pass a

triple test:

(1)  The defendant committed an intentional tort;

Amway alleged that Schwartz is the author of a web site which has been

"devoted to making malicious attacks against Amway" including "vulgar,

false, and defamatory statements about Amway, its officers, its business

practices, and its products.

According to the court, Amway's complaint clearly meets the first prong

of the "effects" test -- alleging that Defendant committed an

intentional tort.

(2)  The plaintiff felt the brunt of the harm in the forum such that the

forum can be said to be the focal point of the harm suffered by the

plaintiff as a result of that tort;

Judge Bell ruled that although it has been noted a corporation typically

does not suffer harm in a particular geographic location in the same

sense that an individual does, there is nothing in the case law that

would preclude a determination that a corporation suffers the brunt of

harm in its principal place of business.

Amway is a Michigan corporation. The business was founded in Michigan

and its headquarters remain in Michigan. Because the complaint alleges

interference with business relations through the dissemination of false

and defamatory statements about Amway, its officers, its business

practices, and its products, Judge Bell ruled that Amway has adequately

made a prima facie showing that it felt the brunt of the harm in


(3) The defendant expressly aimed his tortious conduct at the forum such

that the forum can be said to be the focal point of the tortious


Schwartz was an Amway distributor for a period of time so that he could

get informational mailing from Amway. Because he had an insider's

knowledge of Amway, and because Amway claimed that he was using his web

site to target not only Amway, but its officers as well, Judge Bell

ruled that there is no question that Michigan was the focal point of the

allegedly tortious activity.

The court concluded that the allegations in Amway's complaint, together

with the excerpts of Schwartz's deposition, were sufficient to make out

a prima facie showing of personal jurisdiction over Defendant Schwartz

under the effects doctrine, since Schwartz has taken intentional

actions, aimed at the forum state, and that these actions cause harm,

the brunt of which is suffered, and which the defendant knew was likely

to be suffered, in the forum state (Michigan).

Therefore the court rejected Schwartz's motion to dismiss the lawsuit

against him, and asserted jurisdiction over the Seattle resident.

The full text of Judge Bell's ruling can be found at:

--------- sponsor message ----------


In a single search, you can combine the knowledge base of

40 Legal search engines with the popular Web search

engines - pinpointing the exact info you need with LegalSeeker.

Designed for Internet users who desire to run highly

comprehensive searches that combine the results of multiple

search engines, LegalSeeker delivers a clean list of results

that can be saved, viewed offline, easily organized, and

updated automatically.

Get you free trial (full price $99.95) Windows only.

--------- sponsor message ----------


4. 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.

Top news


* Denial of Service attacks - investigations continue *

Canadian law officials have investigated Internet Direct, a

Montreal-based Internet service provider, in an attempt to gather

information about a former subscriber using the name "mafiaboy." This

online name is the same one that several security experts have pointed

to as a possible suspect in last week’s "distributed denial of  service"

attacks. Mafiaboy's account was cancelled by the Canadian ISP in 1998

for "violating terms and conditions".

U.S. Federal agents are set to question suspects in the U.S. cyber

hacking case after linking online aliases to real names and addresses.

One of the suspects, whose online alias is "Coolio," lives in the United


In a denial of service attack, hackers use any number of computers to

send a barrage of information requests to servers that host Web sites.

The overwhelming stream of information often clogs a server network and

paralyzes the site it hosts. Yahoo! was the first to be hit by such an

attack. Later hackers attacked leading e-commerce sites,

ebay,, eTrade and ZDnet.

Cnet's full coverage:

* Lexis – Jurisline in an online legal battle *, a legal site that went online a few months ago, makes

available an archive of court opinions from federal courts and those of

37 states, much of it admittedly compiled by copying material contained

on CD-ROMs purchased from Lexis. In December, Jurisline filed a federal

lawsuit claiming that its copying of judicial opinions from Lexis'

CD-ROMs was protected under federal copyright law. Then in January Lexis

fired back with a lawsuit seeking, among other things, $25 million in

punitive damages, for Jurisline's fraud and breach of contract for

obtaining the CD-ROMs for the purpose of creating a competitor. Lexis

generates revenues of more than $1 billion a year from selling access to

its databases. Jurisline, which is supported by advertising is making

its database available without charge to users.

The agreements that Jurisline founder signed when he purchased 60

CD-ROMs and more than 100 updates, state that they were for his use as a

lawyer only, and that they could not be made available to the general


Jurisline contends that the limitations built into Lexis' licensing

agreement attempt to control an "essential facility" in violation of

federal antitrust law. According to Jurisline’s position, Lexis may not

use a contract to take public domain material (such as court opinions

which are explicitly not covered by the federal copyright law) and

create a level of protection that is tantamount to a federal copyright.

In the past, the U.S. Supreme Court has ruled that mere "sweat of the

brow" without any added independent creativity is not enough alone to

confer copyright protection upon a work. Jurisline used the core text

from the Lexis CD after removing all editorial enhancements made by

Lexis. Therefore the key question in the Lexis-Jurisline battle is

whether a database manufacturer can write copyright protection into its

sales agreements.

An interesting analysis by T.R. Halvorson is available at:

I want to thank Cyberlaw Informer reader Susan Freiman who pointed out

Jurisline’s press release which is available at:

Consumer protection


* U.S. Justice Department Probes eBay  *

The U.S. Justice Department is investigating attempts by online auction

giant eBay to block comparison shopping software. These programs

aggregate information from many online auction sites and compare the

items, features and prices on the different auction sites. eBay has

blocked access by some of these services. The Justice Department is now

attempting to determine if the practice is anti-competitive.

Internet auction search service Bidder's Edge, facing a lawsuit from

eBay, filed a countersuit claiming that eBay is violating federal

antitrust laws. The countersuit says that eBay holds a virtual monopoly

of the Internet auction market, and that the company is using its market

power to interfere with Bidder's Edge's relationships with other firms.

* FTC probes and * announced that the U.S. Federal Trade Commission (FTC) has

launched a preliminary inquiry into possible unfair and deceptive trade

practices by the company. Amazon’s announcement was followed by an

announcement from eToys Inc that the FTC is looking into that company's

marketing of software and video games to children. The FTC is also

investigating whether eToys shipped its orders promptly during the

Christmas season.,1283,34192,00.html

* DoubleClick adopts new privacy policy *

DoubleClick started a new attempt to cool privacy concerns about its

collection of consumer data. DoubleClick responded to two recently filed

lawsuits and to public criticism about the company's plans to merge

online and offline databases. The advertising firm also unveiled a new

site in which users can "opt-out" of  being tracked. DoubleClick will

also appoint an independent privacy advisory board. But DoubleClick will

move ahead with plans to merge information collected on the Internet and

from offline sources. Consumers will not be able to view and edit their


* AOL backs out of open access battle *

America Online (AOL) ended its lobbying for legislation requiring cable

firms to share high-speed Internet lines with competitors. The change in

policy comes after AOL's $120 billion acquisition of cable giant Time

Warner. Cable companies currently offer the most popular high-speed

Internet services, but the companies have forced their customers to sign

up with Internet service providers also owned by cable companies. Until

its Time Warner deal, AOL and most other ISPs had pushed for government

rules banning the exclusive practice and requiring cable firms to allow

unaffiliated companies to offer Internet services. So it seems AOL's

battle was all about the money, not about consumers' rights.,1283,34334,00.html

Domain names


* Island want their domains back *

Pitcairn Island, a British territory in the South Pacific with 49

residents, is leading a battle that has already spread to one other

Pacific island and is expected to grow. Pitcairn wanted back its

top-level domain (.pn), that ended up controlled by a British company.

Acting on a petition signed by all but two of Pitcairn's adult

inhabitants, the Internet Corp. for Assigned Names and Numbers (ICANN)

confiscated .pn from the registrar company that had been passing it out

and gave it back to the island community.

The next case could come from another South Pacific territory, American

Samoa, whose designated country code, .as, is similar to the English

"Inc." in Denmark. Allegations that the governor of that island might

have signed it over to insiders several years ago to market at a profit

in Denmark has become a political scandal in Samoa.

* John Tesh settles domain name lawsuit *, an Internet company run by musician John Tesh, announced that

it has reached a settlement in Tesh's lawsuit against As

reported in the previous issue of the Cyberlaw Informer, Tesh filed suit

seeking the return of the domain name held by Celebsites.

The celebrity fan site has agreed to turn over the domain to,7407,2432748,00.html

* Small firm sues Federal Express over domain name *

Dostana Enterprises, a small New Jersey online company offering an

online medical referral system, has filed suit against shipping giant

Federal Express Corp. (FedEx) to retain the right to use the domain name. FedEx, however, has demanded the company

cease and desist because it says it owns the "The World on Time"

trademark.  In a pre-emptive lawsuit Dostana asked the Court to declare

that its registration of the domain name doesn't violate

the federal Anti-Cybersquatting Consumer Protection Act. FedEx has a

registered trademark for “The World On Time” for its shipping services

since 1994.

* Bell Atlantic wins first “in-rem” domain lawsuit *

In the first ruling to take advantage of the "in rem" provisions

included in the U.S. anti-cybersquatting law, a federal magistrate judge

allowed Bell Atlantic Corp. to assume control of more  than 20 domain

names registered by alleged cybersquatters. Under the “in rem”

provision, a trademark owner may, instead of suing individual domain

holders, sue the domain names themselves. In an "in-rem" judgement, a

court can award disputed domain names to a plaintiff without the domain

name registrants' knowledge or presence. Some of the domains in

question, such as, seem to me as a clear case of

cybersquatting. Despite the fact that other names, including are generic and could be legitimate, in these cases the

“in-rem” procedure seems like the wrong way to handle the problem.

* Yahoo! Changes Mexican domain name *

Yahoo! Mexico, an affiliate of Internet portal company Yahoo! Inc., said

it changed the Internet address for its Mexico portal from ,  (mx is the Mexican top level domain) to The change is due to a legal dispute over who owns the

address in Mexico.,1087,3_93002_Ext,00.html

* Warner Brothers threatens Harry Potter fan sites *

Warner Brothers, which has film rights to two Harry Potter books, is

demanding that Web sites such as transfer

their names to the company. More than 50 Web sites are devoted to JK

Rowling and her successful Harry Potter books for children. There is

little if any evidence of any attempts by the site operators to deceive

or pass themselves off as the official Harry Potter experience,

merchandising and all.

* Coca-Cola drops domain name dispute with fan site *, the administrator of the domain name,

will be allowed to keep its name as long as the site is not used for

commercial purposes, according to a letter sent  by Coca-Cola to the Web

design firm. The site featured images of vintage Coke memorabilia and

links to Coke merchandise auction sites. As reported in the previous

issue of the Cyberlaw Informer, after receiving a cease-and-desist

letter from Coca-Cola last month, the design firm pulled its original


* Sportsman’s market wins domain *

Sportsman's Market is a mail order catalog company that sells products

to pilots and aviation enthusiasts. For decades the company has used the

logo "sporty" to identify its products and, in 1985, it registered the

trademark "sporty's". Omega Engineering Inc. entered the aviation

catalog business about five years ago and registered the domain name

"". In 1996, Omega launched a subsidiary called Sporty's Farm

to sell Christmas trees and sold the company the "" domain

name. Judge Covello ruled in favor of Sportsman's on trademark dilution

under the Federal Trademark Dilution Act of 1995. While the appeal was

pending, Congress passed the Anti-cybersquatting Consumer Protection


Judge Calabresi, writing for a unanimous 2nd U.S. Circuit Court of

Appeals panel, said " the new law was adopted specifically to provide

courts with a preferable alternative to stretching federal dilution law

when dealing with cybersquatting cases”. The court then found that the

term "sporty's" is inherently distinctive and the use of ","

was "confusingly similar to the term 'sportys'," in part because domain

names cannot include apostrophes. Calabresi ruled that Sporty's Farm

acted with bad faith when it registered the domain name.

* looses to *, a US company offering fax-to-email conversion services, sued

the owners of the domain name claiming it was confusingly

similar to its own name., has been using this name since

February 1999, while efax, a UK company also offering fax-to-email

conversion services, has been trading using its name since 1997. Justice

Jonathan Parker disagreed with, finding that the word efax was

highly descriptive of the services being provided: "e" being the

universal prefix for Internet services and there being universal

familiarity with the word "fax" as a shorthand for facsimile. Justice

Parker thought that it was likely that efax would be understood as a

fax-over-the-Internet service.



* Lawyers fighting over Microsoft class action representation *

There are already 96 lawsuits pending against Microsoft. One lawyer,

Michael D. Hausfeld of Washington has tried to get to know them all.

Hausfeld has moved quickly and, so far, very effectively, to get most of

the lawyers under his tent, with him in charge. To do that, he has

ignored angry protests from a team of law firms that have been pursuing

class actions against Microsoft since February 1999. Hausfeld on the

other hand, was part of the pack that filed its suits only after Judge

Jackson’s ruling against Microsoft in the government antitrust case, in

November 1999.

* And Microsoft looses first round of class action suit *

Microsoft lost the first round in an effort to shift a proposed class

action alleging unfair business practices out of San Francisco . Judge

Stuart Pollak ruled coordination of more than 20 pending cases should

remain in the city despite arguments by Microsoft’s attorneys that San

Francisco's proximity to Silicon Valley -- home to many of Microsoft's

competitors -- could prejudice a jury pool.

* Caldera-Microsoft – new info *

 As reported here a few weeks ago, Caldera and Microsoft ended up

settling their 4-year-old antitrust suit before it went to trial. But it

seems the case has not come to its rest. At the end of January, as a

result of a lawsuit brought by three media a number of previously sealed

documents in the Microsoft-Caldera case were unsealed.

Former Microsoft Germany employee Stefanie Reichel admitted in a

deposition that she destroyed files and other information that

potentially could have been used as evidence against Microsoft in the

Caldera case. Reichel said in her testimony she had destroyed e-mail

messages that "could be problematic in an investigation" at the request

of Microsoft management. Reichel also admitted in the newly public

deposition excerpts that her supervisor discarded hard drives of

computers in Microsoft's German office.,4586,2433485,00.html

* Europe investigates Microsoft’s conduct *

The European Commission said it’s investigating complaints about

Microsoft’s new Windows 2000 operating system. The EU antitrust chief

said the EU's Executive Commission had sent Microsoft a formal request

for information following allegations that its new Windows 2000 software

breaks EU antitrust rules. Microsoft’s design of Windows 2000 might

extend its dominance in personal computer operating systems to server

operating systems and ultimately electronic commerce.,1283,34253,00.html

Intellectual Property


* files countersuit against RIAA *

A couple of weeks after being sued by Recording Industry Association of

America (RIAA), countered by filing a law suit against the

(RIAA) and its president and chief executive, Hilary Rosen. The

complaint accuses the association of engaging in unfair business

practices. In January the RIAA filed suit against MP3 accusing it of

violating copyrights with it new My MP3 service.,1283,34191,00.html

* Connectix wins Sony PlayStation lawsuit *

Sony has lost its appeal against Connectix, a computer products maker

that Sony accused of tinkering with Sony PlayStation game console

software. The 9th U.S. Circuit Court of Appeals upheld Connectix's right

to use a process known as “reverse engineering” to develop a product for

playing PlayStation games on PCs. Reverse engineering is the process of

taking apart and analyzing products to develop new applications with the


A full report about this new interesting precedent is planned for the

next issue of the Cyberlaw Informer.

* Computer manufacturers sued by patent holder *

Data communications maker Multi-Tech Systems filed intellectual property

lawsuits against Compaq Computer, Dell and Gateway, three of the leading

computer manufacturers. Multi-Tech alleges that the three PC makers

violated six of its U.S. patents for how voice, data and video are

digitized for transmission over phone lines or corporate networks. If

the patents are found to be valid, they could affect virtually every

computer manufacturer shipping PCs with a sound card, modem and web


* Protected CDs fail in Germany *

BMG Germany debuted the first copy-protected audio CDs last week in

German music stores. By week's end, the company was faced with a

backlash from consumers complaining that some of the copy-protected CDs

were unplayable. Approximately 100,000 protected CDs were sold, and 3 to

4 percent were returned. BMG stopped the trial late last week and

shipped additional orders of the CDs without copy-protection.,1282,33921,00.html

* Who is Whois *

Internet service provider Verio had applied for a trademark on the

Whois. Whois is a search service for Internet resources, including

domain name lookup (i.e. finding out who the holder of a domain name

is). Since Whois has nearly sacred status as a critical network utility,

the possibility of someone owning the name didn't sit well among those

who keep a close eye on the Net's inner workings. The US Patent and

Trademark Office declined Verio’s application for the Trademark.,1367,34138,00.html

* Software pirate arrested *

Robin Rothberg, 32, one of the suspected leaders of an international

ring of software pirates operating on the Internet, has been arrested

and charged with conspiring to violate the copyrights on thousands of

computer programs.

* Software pirate wins in Kenya *

In the first software piracy case in Kenya, Microsoft had been seeking

the imprisonment of Mohamed Suleiman, managing director of local PC OEM

Microskills, whom it accused of illegally loading its software.

Suleiman, did not deny that the PCs had Microsoft software, but argued

that Kenyans should not be expected to pay more for software when their

income is ten-times lower than people in the western world. The court

ruled in favor of Suleiman.

Cyber crime


* Leading security site hacked

A site owned by security specialists RSA Security has been defaced. The

hacker left a message saying "RSA Security inc. Hacked. Trust us with

your data! Praise Allah! The most trusted name in e-Security has been

owned." RSA is one of the world's leading commercial encryption and

electronic authentication companies.

* RealNames hacked *

RealNames, a company that substitutes complicated Web addresses with

simple keywords, is warning its users that its customer database has

been hacked, and that user credit card numbers and passwords may have

been accessed.

* 60 year-old woman accused in online banking scam *

A 60-year-old woman is accused of running an Internet investment scam

from her Florida home. The U.S. Securities and Exchange Commission (SEC)

alleged that Nancy J. Cheal raised more than $1.5 million from investors

in 48 states. Cheal lured investors into a fake "bank debenture trading"

program, promising a 100 percent return per week, the SEC alleged.,7407,2432895,00.html

* Teenager pleas guilty to online threats *

Michael Ian Campbell, 18, pleaded guilty to sending an email message

threatening to finish what the Columbine High School gunmen started when

they killed 12 students and a teacher last spring. Authorities who

learned of Campbell's threat shut down Columbine two days before

Christmas vacation as a precaution. Campbell was tracked to his Florida

home via his Internet provider, America Online (AOL).

*  SEC sues over Internet stock fraud *

The U.S. Securities and Exchange Commission (SEC) sued and

a Florida man for allegedly lying to investors to get them to buy shares

in a purported development-stage Internet retailer. According to the

suit, Arthur Alonzo impersonated a legitimate broker to sell shares of

what appears to be a bogus company.,7407,2436554,00.html

Misc. cyberlaw news


* Australia porn site relocates *

Australian pornography site relocated its content to

U.S.-based Internet servers last month after receiving orders from the

Australian government to take down sexually explicit material from its

Australian-based site. The take-down order is one of four made by the

Australian Broadcasting Authority (ABA) since 1 January, when a new law

went into effect to limit unrestricted access to obscene and indecent

online content.

Under Australia's new laws, the ABA evaluates public complaints

regarding Internet content believed sexually explicit, violent, or

otherwise offensive. If the ABA decides a complaint has merit, it refers

the material to Australia's Office of Film and Literature

Classification, which rates the material based upon an existing ratings

system for domestic movies and videos. Internet content deemed X

(Sexually Explicit) or RC (Refused Classification) can be ordered to be

taken down by the ABA if it is hosted in Australia.

“Technically, they have complied with the take-down notice we issued,"

ABA special projects manager Stephen Nugent said. For overseas-hosted

content ABA can only distribute the URLs to domestic Internet filtering

software companies to add to content blacklists for customers using

their products. To opponents of the law, the move underscores the

futility of efforts to control online content in an era of mouse-click

regulatory arbitrage.,1283,34043,00.html

Australian authorities have further problems dealing with newsgroup

postings. A Newsgroup posting has been classified as banned material by

the Office of Film and Literature Classification. The text was found on

DejaNews ( the large newsgroup archive. Since DejaNews

is outside Australia, ABA advised approved Internet filter makers that

the portion of the news archive server containing the posting is

"refused classification" and should be blocked. Technically, the ban is

not on the collection of newsgroups known as Usenet, because the initial

complaint was about the website where the posting was archived.

* makes bulk calls *

Robert Braver, a computer programmer has sued 40 times over unsolicited

telemarketing calls, and lost only once. The latest defendant is

Internet domain name registrar based. According to

Braver was making unsolicited telemarketing calls not

complying with the Telephone Consumer Protection Act.

* Mexican retailer fights computer retailer lawsuit *

Grupo Sanborns SA, a leading Mexican retailer, said a $600 million

lawsuit filed against it for allegedly trying to push a U.S. computer

distributor out of Mexico is unfounded. COC Services accused Sanborns

and U.S. computer retailer CompUSA of trying to breach a contract that

gave COC exclusive franchise rights to open CompUSA stores in Mexico.

Sanborns is in the midst of buying a controlling stake in CompUSA, the

largest U.S. chain of computer stores.

* Northwest Airlines gets private computer search warrants *

Northwest Airlines began court-authorized searches of the home computers

of flight attendants, looking for private e-mail and other evidence that

the employees helped to organize a sick-out at the airline over the New

Year's holiday. Last month Northwest sued the flight attendants union

and some of its members, alleging they had violated federal labor laws

by orchestrating a sick-out. The case appears to break new ground

because, in addition to searching the office computers of union

officials, Northwest got permission to search their home computers.

* Small wineries sue New York over ban on Internet wine sales *

Small wineries in California and Virginia sued New York State over a law

that blocks wine sales on the Internet. The plaintiffs argued that New

York's law is unconstitutional because it allows Internet sales within

the state, while preventing out-of-state companies from shipping wine to

New York. The lawsuit also claims the New York law's prohibition on

advertising by out-of-state wineries would unconstitutionally hinder

wineries from putting ads or price lists on their Web sites, because the

New York residents have access to the sites. Because no store can

display most brands, smaller vintners argue they need Internet sales to

find a market.

That is all for this week,

Yedidya (Didi) M. Melchior



If you have enjoyed reading this newsletter and have found

useful information in it, we'd appreciate your help in

spreading the word about it. You can do this by forwarding

a copy to your friends and telling them about it.

To subscribe, please visit

To unsubscribe, please go to

Information on how to sponsor Mishpat Cyberlaw Informer

Send suggestions and comments to

If you wish to contribute an article

Online archives

Copyright 1999 Mishpat.Net Internet Legal Information

The Cyberlaw Informer

Your E-mail Address

Back to Mishpat-Update archive

law bar

| Home | About | Comments | Advertise With Us | Bookstore | Legal News | Add a Resource |

| Discuss Law | Recommend this site | Advanced Search | What's New |

| Israeli Lawyers | Directory | Privacy Policy | Disclaimer |

Copyright © Mishpat-Net 1998-2004