The Mishpat-Update #16


Welcome to the sixteenth issue of the weekly Mishpat-Update, Law 
on the net from http://mishpat.net

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In this issue:

1. Introduction
2. Linking and copyright
3. Prison terms for software pirates
4. Cyberlaw Updates
5. News from the Microsoft Antitrust trial

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################
1. Introduction
################

I would like to welcome the 11 new subscribers who joined the list this
week. 

This weeks' focus is on linking. Links create the structure, enabling
"surfing" through the world wide web. But links can create legal
problems. In the second section of this issue we will take a look at
linking to infringing web sites.

The Mishpat Update archives have been updated this week. The
archive (issues 1-15) is available at:
http://mishpat.net/mailing-lists/update



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#########################
2. Linking and copyright
#########################

It is quite obvious that an Internet posting of material infringing
someone's copyright, is a violation of the owners' copyright. The much
more interesting question is whether simply linking to such a site is
also an infringement.

A Dutch court has recently ruled that linking to a site containing
infringing material is a violation of copyright law. This ruling could
expose Dutch and multinational Internet publishers to new liability for
a practice that is widespread on the Internet. 

The Church of Scientology, known for it's aggressive lawsuits policing
its copyrights, asked the court to order Internet service providers to
take down the infringing material. 
The decision stems from a lawsuit the church filed against individuals
who posted materials written by Scientology founder L. Ron Hubbard on a
Web site in Holland. The individuals posted the copyrighted materials
online after a court in the United States had fined a separate
individual for making them available on the Internet. 

The County Court in the Hague ruled that the materials on the Dutch web
site didn't infringe the church's copyrights because all the material
published was part of American court documents, and therefore in the
public domain. 

But the court broke new ground when it ruled that hyper links to
infringing materials might also be considered copyright infringement:
"A responsibility might be assumed in a situation where it is
unequivocally clear that a publication of a user is wrongful and where
it can be assumed with reason that such is known to the access
provider, for instance because someone has notified the provider of
this. In such cases, Internet access providers might be requested to
take steps against the user in question".
In this case, the material did not violate the church's copyright, so
claims against the service providers were dropped. 


This decision may have great effect on Internet publishers and
especially on search services such as AltaVista's Photo and Media
Finder and Lycos' MP3 search. For example, the AV photo finder (at
http://image.altavista.com ) automatically indexes millions of pictures
available on the world wide web. During the automatic process, there is
still no way to check if a picture constitutes copyright infringement.

The decision does not only create practical problems, in might also be
legally incorrect. Traditionally links are compared with footnotes and
just giving a reference doesn't constitute copyright infringement. 
However under a theory known as "contributory infringement" the only
requirements are that the publisher knew or should have known about the
infringement and materially contributed to the infringement, so the ISP
could have been found liable as a contributor if he was notified (as
the Dutch judge stated in the above quote). 

The dutch case involved Karin Spaink, an Amsterdam free speech advocate
who recently mirrored a controversial anti-abortion site (the
"Nuremberg files") shut down by a federal jury in Oregon, USA. 

Karin Spaink has made the ruling available at:
http://www.xs4all.nl/~kspaink/cos/verd1eng.html

You can also read Karin's side of the story at:
http://www.xs4all.nl/~kspaink/fishman/home.html



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3. Prison terms for software pirates
#####################################

The war against software pirates has gone into a new stage, in which
criminal penalties become more harsh. This week, in Germany and the US
software pirates were sent to prison.

In the largest software piracy case in Germany, a regional court in
Aachen Germany sentenced a 39 year old American to four years
imprisonment without probation. 
The defendant was arrested last July near the Dutch German border on
suspicion that he was involved in dealing illegal software. Authorities
also confiscated some 120 million marks (.14 million) worth of
merchandise from a truck and warehouses in the area around Aachen. That
included hundreds of thousands of CD-ROMs, as well as user manuals,
registration cards, floppy disk labels and certificates of
authenticity. 
The court said it would have made the sentence longer but it took into
consideration that the defendant will face further prosecution in the
UK (where the software was manufactured).
http://www.news.com/News/Item/0%2C4%2C37828%2C00.html


In the US, a father and son accused of conspiring to sell more than 
million in Microsoft software stolen from a Massachusetts manufacturer,
were sentenced to prison. Robert Simons, 62, who ran Crazy Bob's
discount software store in Wakefield, Massachusetts, was sentenced to
five years and 10 months imprisonment. Simons was also ordered to pay
,000 in restitution to Microsoft and to forfeit ,000 to the
federal government. His son, William Simons was sentenced to one year
and 10 months in prison, and must pay ,000 to Microsoft.
Crazy Bob's was accused of buying and selling 32,000 stolen copies of
Microsoft Office 97 worth  a piece (that adds up to 19 million
dollars) stolen from KAO Infosystems, a disc manufacturer by two ex-KAO
workers. 
http://www.news.com/News/Item/0%2C4%2C37881%2C00.html



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####################
4. 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.


* Diamond wins MP3 victory *
The U.S. Court of Appeals for the Ninth Circuit decided that Diamond
Multimedia Systems' Rio MP3 music player isn't a "digital audio
recording device" under the definition in the Audio Home Recording Act
(AHRA), because the device can't record music directly from the
Internet or from digital media like CDs. The ruling is a blow against
the Recording Industry Association of America (RIAA), which has been
campaigning to quash the rising tide of MP3 based devices.  Full
coverage of this story in next weeks Mishpat Update. Meanwhile you
can read more at http://www.news.com/News/Item/0,4,37873,00.html


* NSI and ICANN fight over domain registration *
The Internet Corporation for Assigned Names and Numbers (ICANN), the
nonprofit organization in charge of the Net's technical underpinnings
accused Network Solutions Inc. (NSI) of souring efforts to create
competition in domain name registration market. The attack came in
response to a letter from Ralph Nader's Consumer Project on Technology,
which questioned ICANN's authority and tactics. In response, ICANN
accused NSI of stalling a test period for its a shared registration
system that would allow ICANN accredited registrars to compete directly
with NSI by selling names ending in '.com' and '.net'. ICANN is
intentionally broadcasting its problems with NSI because it wants to
heat up public pressure on the company to cooperate with ICANN and to
sign an accreditation agreement which it has not done.
http://www.abcnews.go.com/sections/tech/CNET/cnet_icannnsi990615.html

The letter from Ralph Nader's Consumer Project on Technology:
http://www.cptech.org/ecom/estherjune11.html
ICANN's response:
http://www.icann.org/chairman-response.htm


* More on cars and domain names *
In the two previous Mishpat Updates we brought the story about the
legal battle over using the name Porsche in domain names. Volkswagen is
now moving against a small Internet service provider Virtual Works,
which registered the domain name vw.net in 1996. Now Volkswagen, which
has filed a complaint with domain name registrar Network Solutions, is
demanding that Virtual Works, stop using it. Network Solutions, citing
Section 9 of its domain name dispute policy, has put Virtual Works's
right to use vw.net on hold, giving it 90 days to file in court to
fight to keep it. 
http://www.news.com/News/Item/0%2C4%2C37981%2C00.html


* US filtering bill *
The US House of representatives passed the Consequences for Juvenile
Offenders Act (CJOA), which includes an amendment to require schools
and libraries to install technology to screen out material "harmful" to
minors as a condition of receiving a federal Net access subsidy, known
as the e-rate. The Senate already passed its version of the so called
Juvenile Justice Bill, which didn't include the filtering provision.
Both houses will have to reconcile any differences between their
versions of the legislation.
Mandatory Net filtering has been debated for years. In a
precedent setting ruling in November 1998, a federal judge in Virginia
said it was unconstitutional for public libraries to filter access on
all Net terminals. But the CJOA would force e-rate recipients to block
out child pornography and obscene content for all patrons.
http://www.news.com/News/Item/0,4,38018,00.html


* Internet postal war *
Pitney Bowes Inc. announced a patent infringement suit against
Stamps.com Inc. just a week after filing a similar lawsuit against
E-Stamp. Stamps.com and E-Stamp are currently developing and testing
products which allow users to buy and print out postage over the
Internet. 
http://www.internetnews.com/bus-news/article/0,1087,3_140691,00.html


* Kansas sues online drug stores *
Kansas officials have sued seven online pharmacies for allegedly
selling prescription medications to a minor without involving a
physician. During a sting operation, a 16 year old was able to buy
Viagra and the diet drugs Meridia and Phentermine, which are controlled
substances, online. If found liable, the companies could face penalties
of ,000 to ,000 per violation.
http://www.computerworld.com/home/news.nsf/CWFlash/9906115drugs


* EU - US push privacy deadline *
A few weeks ago we reported the European Union and the US have trouble
reaching an agreement about the implementation of the EU data - privacy
directive. Now both sides agreed to set a new deadline, possibly in the
third quarter, for reaching an agreement on data privacy. 
http://www.computerworld.com/home/news.nsf/CWFlash/9906152eupriv


* Senate passes Y2K bill *
The Senate approved a controversial bill that looks to limit lawsuits
arising from the Year 2000 computer problem. The Y2K Act provides a 90
day cooling off period for plaintiffs and defendants to resolve Y2K
disputes out of court. The bill also sets maximum sums on punitive
damages for small businesses, protects government entities (including
municipalities and schools) from punitive damages. Representatives from
the White House said that President Clinton won't budge from his veto
threat, despite pressure from some Senate Democrats and the technology
industry, because the Act  doesn't do enough to protect consumers.
http://www.nytimes.com/library/tech/99/06/biztech/articles/16year.html
(Free subscription to the NY Times required)
http://www.news.com/News/Item/0%2c4%2c37951%2c00.html


* Microsoft and Sun fight over Java license *
Microsoft and Sun Microsystems appeared in the U.S. 9th Circuit Court
of Appeals today, to dispute a November 1998 decision in the ongoing
Java licensing legal battle between the companies. The decision in
question was a U.S. District Court preliminary injunction that barred
Microsoft from shipping Java enabled products that didn't pass Sun's
Java compatibility tests. 
http://www.computerworld.com/home/news.nsf/CWFlash/9906163msoftsun


* FTC sues over Internet fraud *
The US Federal Trade Commission (FTC) has sued three web site providers
for illegally billing more than 300,000 small businesses for "free"
internet services. The FTC said Internet fraud usually begins with a
phone call to a business offering a "free trial period" or a "no
obligation" chance to have a Web site created for the company. But some
businesses that declined the offer or tried to cancel the agreement
still had charges placed on their phone bills, the agency alleged,
sometimes for months in a row.
http://www.zdnet.com/zdnn/stories/news/0,4586,2278486,00.html


* US cryptography bill *
The US House of representatives' Subcommittee on Telecommunications,
Trade & Consumer Protection approved the Security and Freedom through
Encryption (SAFE) Act, intended to provide export relief for encryption
products. The bill will now go to the full Commerce Committee. 
http://www.computerworld.com/home/news.nsf/CWFlash/9906174crypto



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#################################
5. News from the Microsoft trial
#################################
Mishpat Update brings you a summary of last weeks events in the
Microsoft antitrust trial, that is now in the rebuttal phase.

* AOL executive didn't help Microsoft's case *
Judge Jackson said America Online's senior vice president, David
Colburn, didn't offer much support to Microsoft's contention that AOL
bought Netscape Communications to compete directly with the software
giant. 
Colburn, called to the stand by Microsoft as a hostile witness,
repeatedly said he was not familiar with emails between AOL chairman
Steve Case and other top AOL executives, discussing the possible use of
Netscape's Internet browser software, to compete with Microsoft's
Windows operating system and its Internet Explorer browser.
At one point Judge Jackson said to Microsoft's attorney: "I am not sure
where you are going here ... You have long since exhausted this
witness's personal knowledge." 
Microsoft is trying to show that AOL's .2 billion acquisition of
Netscape and its technology alliance with Sun Microsystems represents a
shift in the competitive landscape that makes irrelevant the antitrust
suit.
http://www.computerworld.com/home/news.nsf/CWFlash/9906153trial
http://www.news.com/News/Item/0%2C4%2C37831%2C00.html


* Former Symantec CEO testifies on Microsoft's behalf *
Former Symantec Corp. Chairman Gordon Eubanks testified that
competition is alive and well in the software industry. Eubanks
maintained that companies like Microsoft need to keep innovating in
their software products. Eubanks also held up his PalmPilot at one
point to illustrate where competition for PC operating systems is
coming from.
http://www.computerworld.com/home/news.nsf/CWFlash/9906163mstrial


* Microsoft seeks the public's support *
Microsoft has discreetly added a message to the Internet site visited
by millions of people urging them to write to Congress about the
government's antitrust case. The move suggests an intensified public
relations campaign by Microsoft as trial testimony nears an end and
pressure grows to resume settlement negotiations with government
lawyers. 
The Justice Department also solicits comments from the public about the
Microsoft trial, using an e-mail address published on a web page that
includes links to its own court documents and trial evidence. 
http://www.washingtonpost.com/wp-srv/business/longterm/microsoft/micro.htm

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 

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