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Welcome to the fifteenth issue of the weekly Mishpat-Update, Law on the net from http://mishpat.net This newsletter is sent only to subscribers. If you no longer wish to receive the Mishapt-Update, follow the unsubscribe instructions at the bottom of this message. -------------------------------------------------------- In this issue: 1. Introduction 2. Contradicting jurisdiction decisions? 3. Cyberlaw News 4. News from the Microsoft Antitrust trial -------------------------------------------------------- ################ 1. Introduction ################ I would like to welcome the 22 new subscribers who joined the list this week. After last weeks' main article brought an Australian jurisdiction case, two interesting rulings from the U.S. were issued lately, that use a different kind of reasoning while trying to resolve online personal jurisdiction issues. A review of the two cases appears in the next section of this newsletter. Many new readers have joined the list in the past two weeks. I promise to update the archives this week. The Mishpat Update archives (issues 1-10) is available at http://mishpat.net/mailing-lists/update --------- sponsor message ---------- Blue Squirrel Now you can personalize the Internet! * Perform advanced searches on Legal topics! LegalSeeker Utilize the power of searching over 20 legal search engines simultaneously to get accurate results. * Take the Net on the road! WebWhacker Select the information you want off of the Net for offline viewing. * Give yourself and your clients a new way to view information! ClickBook Print any document or web page in a double-sided booklet or brochure. http://www.bluesquirrel.com/index.html?ASCID=184 --------- sponsor message ---------- ######################################### 2. Contradicting jurisdiction decisions? ######################################### Last week I presented you with a ruling issued in New South Wales, Australia. The Australian court decided not to Exercise jurisdiction over an Australian citizen residing in the US, who posted allegedly defamatory messages on the web (even though the information is accessible from Australia as in any other jurisdiction). This week we bring two American rulings from different states with different outcomes. A federal district court in Virginia ruled that AOL members can be hauled into a Virginia court to answer for lawsuits, no matter where they live. In Bochan v. La Fontaine, Judge T.S. Ellis said because the Texas defendant used his AOL account to post an allegedly libelous message to a Usenet group, the e-mail must have been stored temporarily in AOL's Usenet server before it was distributed to other Usenet servers. The Bochan case began as a war of words among conspiracy theorists speculating about the death of President John F. Kennedy at the online newsgroup, alt.conspiracy.jfk. Steve N. Bochan, purchased a copy of a book about the JFK assassination, "Oswald Talked: The New Evidence in the JFK Assassination". Bochan disagreed with the book's authors and aired his views by posting comments to the newsgroup. The Texas based journalists who authored the book, Ray and Mary La Fontaine, responded to Bochan in a heated discussion over a series of Usenet posts. Bochan alleged that in some of their messages, the La Fontaines accused him of being a pedophile. Bochan filed lawsuit for defamation and intentional infliction of emotional distress. The La Fontaines asserted that the Virginia court did not have personal jurisdiction over them. The La Fontaines had no business or personal ties with Virginia. Under state law, the court would only have jurisdiction over them if they caused injury by an act in Virginia. Because the La Fontaines posted their comments to the newsgroup using a Texas based ISP and their AOL account, the judge determined that the defamatory messages were transmitted first to AOL's Usenet server in Loudoun County, Virginia. There the message was both stored temporarily and transmitted to other Usenet servers around the world. Judge Ellis ruled that because publication is a required element of defamation, and evidence showed that the use of a Usenet server in Virginia was integral to that publication, there was sufficient activity in the state of Virginia to allow for jurisdiction over the La Fontaines. In contrast, a panel from the California Court of Appeal for the Second District ruled that hosting a Web site with a company whose servers are located in California is insufficient grounds for courts in the Golden State to have jurisdiction over the site. The decision stems from a defamation lawsuit filed against the Jewish Defense Organization (JDO), which in 1997 claimed on its Web site that the plaintiff, Steven Rambam, "secretly admires the Nazis and hates Jews" and "is a dangerous psychopath who tried to kill his mother." Rambam sued the New York City based organization and its founder, Mordechai Levy, in state court in Los Angeles. He argued that their contracts with free web hosting companies GeoCities and Xoom.com located in California gave courts in the state jurisdiction over the matter. The three judge appellate panel unanimously disagreed, saying the use of the California companies did not satisfy the conditions required to give California courts specific jurisdiction over the nonresident defendants. The courts reasoning was that: "Defendants were mere customers of Internet service providers who happen to maintain offices or databases in California; such providers were engaged by JDO from its computer in New York ... we conclude that defendants’ conduct of contracting, via computer, with Internet service providers, which may be California corporations or which may maintain offices or databases in California, is insufficient to constitute 'purposeful availment' and does not satisfy the first prong of the three-part test for specific jurisdiction. In light of our conclusion, we need not address the other prongs of the test for specific jurisdiction, or the motion to stay or dismiss on grounds of inconvenient forum." The Virginia decision means that any of AOL's 17 million subscribers who write potentially objectionable messages are at risk of being forced to appear in Virginia courts. While the California ruling means that the millions hosting a website on Xoom or Geocities can not be forced to appear in California although their potentially objectionable messages are permanently stored in California (the Virginia ruling only requires temporarily storing the posting on a server in Virginia). There are different explanations to the different conclusions in the two cases. Firstly, different jurisdictions have different long arm statutes and therefore courts applying the different statutes end up with different results. Secondly, the problem of jurisdiction over internet postings isn't yet fully resolved. While the California ruling follows the mainstream of jurisdictional rulings (and in my personal opinion the correct one) requiring more than just posting information on a passive web site in order to assert jurisdiction, there are different opinions in case law (especially American) that, as the Virginia ruling shows, are still acceptable in some jurisdictions. The full text of the California ruling can be found at: http://www.courtinfo.ca.gov/opinions/documents/B129319.PDF (Requires the Free Adobe acrobat reader in order to read files in PDF format). More details about the Virginia ruling can be found in the following NY times story: http://www.nytimes.com/library/tech/99/06/cyber/cyberlaw/11law.html (Free subscription to the NY Times required). --------- sponsor message ---------- Please visit our sponsors that help keep this service free. PulseTV.com PulseTV.com is more than just a video outlet. Our staff reviews thousands of movies choosing the best in quality, value and most of all subject matter. Order with confidence as every purchase is backed by our Pulse guarantee, -- if you are not completely satisfied with your purchase, for any reason, you can return it for a refund or exchange. http://www.pulsetv.com/pulse?MID=FU000001&AFID=AF001150 --------- sponsor message ---------- #################### 3. Cyberlaw Updates #################### Each week Mishpat-Update brings you the latest news about online and computer law, with links to the full reports available on the web. * Porsche losses domain name case * Porsche Cars North America Inc. was hit with a legal setback when a federal court threw out Porsche's lawsuit against the holder of the porsche.net and porsche.org Internet domains (the lawsuit was described in last weeks issue). The Court ruled that the sports car maker can only sue the persons or entities individually who registered the Internet domain names ("In personam" lawsuit), but cannot sue just the domain names ("In rem" lawsuit). In an in rem suit, the plaintiff sues property or things instead of people or organizations. Porsche's "in rem" legal tactic was simultaneously suing all the 138 registrants, some of whom are located outside the United States or whose identities can't easily be gleaned from Internic records. Internet free speech advocates had criticized the Porsche legal strategy for casting too wide a net and snaring fan and car club sites and not only those registered by speculators. Porsche said it intends to appeal the ruling. http://www.internetnews.com/bus-news/article/0,1087,3_135971,00.html * Furby domain dispute * Leah Wesolowski started Furbyinfo.com, a Web site dedicated to providing news and information about "Furby" the interactive fuzz bull. Tiger Electronics, a division of toy giant Hasbro filed a lawsuit against the Alabama mother of four. The company claims that Wesolowski's use of the name Furby in her site's title violates their trademark and has insisted that she turn over the domain name as well as another similar site name she registered last year. Wesolowski says she tried to end the dispute telling Hasbro's lawyer that she would turn over the domain names if the company would reimburse her registration costs, but Hasbro refused. "It would have been about ," Wesolowski told Newsweek.com. "Less than he makes in an hour I'm sure." http://www.newsweek.com/nw-srv/tnw/today/cs/cs01tu_1.htm * Government encryption control A study by the Electronic Privacy Information Center (EPIC) found that international export restrictions are still a major obstacle to the use of encryption. According to the report, countries are backing away from using key escrow and key recovery (tools which enable governments to access private messages during investigations), methods the U.S. has encouraged. France is the latest government to back off its proposal for key escrow encryption. In addition, few countries are currently imposing domestic controls on encryption. Clinton administration officials say some controls are needed to ensure encryption isn't used by international criminals. The U.S. policy is impacting the competitive position of American companies, not allowing them to sell products with strong encryption. http://www.computerworld.com/home/news.nsf/CWFlash/9906104epic Meanwhile, the German government came out strongly in favor of placing no restrictions on encryption. The move appears to confirm that the German government plans to put the interests of user privacy ahead of the desire to control criminal activities. http://www.computerworld.com/home/news.nsf/CWFlash/9906071gerpriv * Who holds eBay reputation? * eBay's (the largest online auction site) "feedback ratings" are logged in as buyers and sellers rate their experience when doing a transaction on eBay. Transactions are ranked as positive, negative, or neutral, and those votes are turned into numerical ratings, which eBay uses to measure user satisfaction. eBay claims these ratings are proprietary and cannot be cited on other person to person auction sites. Tiny, Toronto based auction site eDeal is rebelling against the rule and continues to let users cite their eBay ratings on its site. Meanwhile, Yahoo Auctions quickly complied with eBay's demand earlier. Earlier this year eBay added a new clause on feedback ratings to its user agreement that states: "Because feedback ratings are not designed for any purpose other than for facilitating trading for eBay users, we may suspend or terminate your account if you choose to market or promote your eBay feedback rating on any venue other than eBay". But it's the user's time, the user's data, and the users reputation, so why should eBay own that data? eDeal, is trying to get support from major auction sites to create a public database that includes feedback ratings from all auction sites. The company says such a database would help auctioneers compete with eBay, which has a huge lead over smaller sites. http://www.wired.com/news/news/business/story/20148.html * Another episode of the "Nuremburg Files" * The "Nuremburg Files" anti-abortion web site gained notoriety earlier this year when it became the subject of a lawsuit in Oregon. A federal jury ordered several anti-abortion groups that contribute to the site to pay million in damages because the tactics amounted to illegal threats. The "Nuremburg Files” site contains Wild West style wanted posters of abortion doctors. It also lists the names and addresses of abortion doctors, with those who have been killed crossed out and those injured listed in gray. A few days after the verdict, MindSpring Enterprises, which provided the Internet space for the site, closed it for violating the company's “appropriate use policies”. Neal Horsley, the operator of the "Nuremburg Files” said the move was a form of censorship and is suing MindSpring for million for allegedly destroying hundreds of e-mails when it sent the site offline (The site invites readers to send in abortion doctors’ addresses, license plate numbers and the names of their children). http://www.lawnewsnet.com/stories/A2165-1999Jun9.html * Demon won't appeal UK libel ruling * Demon, a major UK Internet service provider will not appeal a high court ruling that last March found the firm responsible for postings on its newsgroup servers (full details were reported in Mishpat Update #4 and #5). The case sets a strong precedent that ISPs in the United Kingdom could be held liable for the content of potentially gigabytes worth of materials that pass through their servers daily. http://www.wired.com/news/news/politics/story/20107.html * Contempt for sending an Email? * On Feb. 10, the entire US D.C. judiciary received an e-mail filled with vulgarities and aimed at Superior Court Judge John Bayly Jr. The message revealed that the author was Jonathan Rees. At the time, Judge Bayly was presiding over Rees' divorce case, which had been going on for eight years. Bayly ordered that Rees show cause why he should not be held in contempt for violating a previous judge's 1992 order prohibiting him additional filings in the divorce matter without judicial approval. But in a hearing before Superior Court Judge Michael Rankin, Rankin decided against prosecuting Rees for the contempt charge because Rees did not receive sufficient warning that his actions violated the 1992 order. At the hearing, Rankin said any order will put Rees on notice that any further e-mails to D.C. judges would be grounds for contempt. But Rees' attorney says that prohibiting his client from communicating with the judiciary would infringe on Rees' right to free speech. http://www.lawnewsnet.com/stories/practice/techlaw/news/A2066-1999Jun7.html * Intel's antitrust problems * Microsoft isn't the only computer giant facing antitrust problems. After settling with the US Federal Trade Commission in March, Intel (the giant chip maker) faces two private antitrust lawsuits. A federal judge hearing Intergraph's patent infringement lawsuit against Intel has rejected a key defense raised by Intel, holding that it did not have rights to the disputed technology at the core of the case. http://www.news.com/News/Item/0%2C4%2C37465%2C00.html In a federal lawsuit, Multivideo Labs alleges that Intel crushed a new device for universal serial bus technology, because it would harm Intel's dominance in the chip market. A universal serial bus (known as USB) allows peripheral devices such keyboards or Zip drives to plug into personal computers without having to be configured first. The Multivideo Labs suit alleges Intel assumed a dominating role at the USB Implementers Forum which sets standards for USB technology (Intel's Steven Whalley is chairman of the forum), and put the dampers on a technology known as AEC, which allows peripherals to connect to PCs more easily. Multivideo, which makes AEC, is seeking at least million in damages. http://www.lawnewsnet.com/stories/A2092-1999Jun7.html * Ex UK spy flees from British Officials * Former English spy Richard Tomlinson, wanted in London for posting a list of British intelligence officers on the Internet, has fled Switzerland and is on the run and out in the cold in Europe (the case itself was reported in Mishpat Update #11). http://www.news.com/News/Item/0%2C4%2C37573%2C00.html * Open access to cable network * In a blow to the telecommunications giant AT&T, U.S. District Judge Owen Panner said cable regulators in Portland had the right to make open access a condition for their approval of AT&T's billion purchase of cable-TV giant Tele-Communications Inc. From an Internet perspective, the Portland ruling is very good news for independent ISPs like MindSpring and EarthLink because it guarantees they won't be locked out of providing cable modem access. http://www.zdnet.com/zdnn/stories/news/0,4586,2270297,00.html ########################################### 4. News from The Microsoft Antitrust trial ########################################### The Microsoft antitrust trial resumed last week after a three month break and is now in it's rebuttal phase. * IBM v. Microsoft * Garry Norris of the International Business Machines Corporation (IBM) testified that despite the absence of a clear cut requirement that IBM drop its OS/2 operating system, the steps called for in Microsoft's contract proposals would have had the "effect of killing OS/2 in the marketplace." Microsoft also wanted IBM to delay the shipping of "Lotus Smart Suite" (an office suite programs competing with "MS Office") which IBM acquired when it bought Lotus Development Corp. Norris, the first representative of a PC maker to appear as a Government witness, has contended that Microsoft repeatedly tried to put pressure on IBM to favor Microsoft software and exclude rival offerings which is a central theme in the sweeping antitrust suit against Microsoft. During cross examination, Microsoft's lawyers introduced evidence, including internal IBM E-mail, that sought to portray the company's relations with IBM as the capitalist arm wrestling of two powerful companies, not as Microsoft playing a bullying monopolist. Microsoft attempted to discredit Norris by showing that the companies' relations in 1995 were strained because of a "smear campaign" IBM waged against Windows 95 as well as millions of dollars in royalties IBM owed Microsoft. But judge Jackson appears to have lost his patience with the approach and at one point snapped at Microsoft attorney Rick Pepperman. http://www.lawnewsnet.com/stories/A2091-1999Jun7.html http://www.computerworld.com/home/news.nsf/CWFlash/9906071mstrial * Does Microsoft's browser integration create security risks? * Judge Jackson may have given the government some powerful help by questioning whether a Web browser on a PC creates a security risk. Jackson raised the security issue during testimony of Princeton University computer scientist and government expert witness Edward Felten, the government's third and final rebuttal witness. Jackson asked Felten if including a browser with an operating system creates security vulnerabilities, such as potential virus infections. The question was aimed at Microsoft's decision to make Internet Explorer an inseparable part of Windows 98. Felten answered that "If you're a corporate system administrator concerned that inexperienced users might accidentally download a virus, you might well choose not to have a browser in order to prevent that means of spreading a virus." By raising the issue of security, Jackson was in effect suggesting another reason why including the browser as part of the Windows 98 has harmed users. http://www.news.com/News/Item/0,4,37649,00.html Judge Jackson's question became extremely relevant as another "worm" virus attacked computers around the world this weekend. The "Worm.ExploreZip" virus attacks Microsoft office files and spreads through Microsoft's Outlook email client (like the former "Melissa" virus). For more information about the new virus, visit: http://www.zdnet.com/zdnn/stories/news/0,4586,2273505,00.html * Gates testifies in Bristol antitrust case * Microsoft Chairman Bill Gates denied in a deposition that his company had tried to freeze out Bristol Technology Inc., a software company, after initially giving it access to Windows programming code. But lawyers for Bristol Technology Inc. grilled Gates about an e-mail message in which he wrote that Microsoft was choosing Bristol's main competitor, Mainsoft Inc., as its partner, and "revving up their activities." Bristol makes a product called Wind/U, which allows programs that were written for Windows to run on computers with different operating systems, such as Unix. In 1994, Microsoft signed a three year contract with Bristol giving the company access to programming code for Windows NT 3.0. When the contract expired in 1997, the two companies could not come to an agreement. Bristol claims Microsoft promised to make the code available into the future. Microsoft says Bristol is trying to get more favorable licensing terms for a new contract. http://www.nytimes.com/library/tech/99/06/biztech/articles/08microsoft-connecticut.html (Free subscription with the NY Times required) If you know of any cyberlaw updates, please send them to mailto:news@mishpat.net That's all for this time, see you next week Yedidya M. Melchior Editor ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If you have enjoyed reading it and have found useful information in this newsletter you are requested to help spread the word about it. You can do this by forwarding a copy to your friends and telling them about it. 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