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The Mishpat-Update #25

Welcome to the twenty fifth issue of the weekly Mishpat Update, Law
on the net from

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In this issue:

1. Introduction
2. More on Domains and Trademarks
3. Mishpat Award Winner
4. Java Ruling
5. Cyberlaw news and updates


1. Introduction

I would like to welcome the 8 new subscribers who joined the list this

It seems that our mailing software has some problem dealing with the
'dollar' sign, so many of you didn't get some of the information on
last week's issue. I set up a special autoresponder, so if you want to
get the correct and full version, send a blank email to Until we move to a knew mailing system
(hopefully within a month), I will refrain from using the 'dollar' sign
and use the word dollar or USD.

This week's issue is packed with legal news from cyberspace. I hope you
enjoy reading this newsletter, don't forget to send your comments to

The Mishpat Update archive (issues 1-23) is available at:

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 by sending
a blank email to

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2. More on Domains and Trademarks

In the first major blow to companies seeking to protect their
trademarks on the Internet, a U.S. Federal appeals court held that
corporations cannot always prevent others from registering domain names
that coincide with their brand names.

Last year Avery Dennison obtained a court order forcing Jerry Sumpton,
a Canadian businessman, to turn over the domain names and The federal judge in Los Angeles deemed businessman Jerry
Sumpton and his company, FreeView Listings, cybersquatters (people who
register domain names that are based on company names and trademarks
and then offer to sell them at inflated prices). A three judge panel of
the 9th U.S. Circuit Court of Appeals recently disagreed with that

Sumpton had registered the names and for
Vancouver (Canada) based FreeView. He planned to lease the names to
people seeking e-mail addresses that contain their last names. FreeView
allows people who share a surname to use the same domain name for
e-mail (e.g. if your name is Dan Avery you could get the email address

Pasadena based Avery Dennison, which sells 3 billion dollars worth of
labels and office supplies every year, sued to recover the domain names
because it feared its customers would be confused by FreeView's

The appeals court rejected Avery Dennison's argument, saying that while
its trademarks are 'distinctive', they are not 'famous' enough to
warrant exclusive use. The court noted that 'Avery' and 'Dennison' are
common surnames, and that others have a right to use them.

Evidence brought in front of the court established that both "Avery "
and "Dennison" are commonly used as trademarks, both on and off of the
Internet, by parties other than Avery Dennison. The record includes
copies of five trademark registrations
for "Avery" and "Averys," a computer printout of a list of several
businesses with "Avery" in their names who market products on the
Internet, and a list of business names which, according to a
declaration submitted by NSI, is a representative sample of over 800
such businesses. The record also contains a computer printout of a list
of several businesses with "Dennison" in their names which market
products on the Internet and a list of business names including
"Dennison," a representative sample of over 200 such businesses. Such
widespread use of "Avery" and "Dennison" makes it unlikely that either
can be considered a famous mark eligible for the dilution cause of

The court ruled that Sumpton did not use trademarks qua trademarks as
required by the caselaw to establish commercial use. Rather, he used
words that happen to be trademarks for their non-trademark value.
Therefore the use shouldn't be considered 'commercial use' as required
under the Federal Trademark Dilution Act.

Most of the decision is based on standard tests used in trademark law,
but an interesting paragraph focuses on the connection between
trademarks and the .net TLD. (TLDs are Top Level Domain such as .com
.net .gov, SLDs are Second Level Domains -- the word before the TLD.
For example in, mishpat is the SLD and net is the TLD)

Judge Trott delivering the opinion of the court stated that:
" In the instant case, Appellants registered the TLD <.net>, rather
than <.com>, with the SLDs (editors note: the SLDs in this case are
avery and dennison) ... <.net> applies to networks and <.com> applies
to commercial entities. ... Evidence on the record supports this
distinction, and courts applying the dilution cause of action to
domain-name registrations have universally considered <.net>
registrations. Although evidence on the record also demonstrates that
the <.com> and <.net> distinction is illusory, a factfinder could infer
that dilution does not occur with a <.net> registration. This genuine
issue of fact on the question of cybersquatting dilution should have
prevented summary judgment for Avery Dennison."

The panel's decision doesn't protect cybersquatters. But it places a
heavy burden on companies to show that someone who has registered its
name did so to cash in on the trademark's value.

The full text of Avery Dennison v. Sumpton can be found at:

3. Award winner

August's winner of the Mishpat Award for legal sites is 
LawKrawler at

LawKrawler is a Law Search Facility, in which you can search for law
related information, Law Firms, Lawyers and Law sites, meant for law
professionals and law students alike.

As you can learn from it's domain name, the site focuses on British
law, and links to English law faculties. The site's main drawback is
the relativly small number of links in it's databse. If you want to
suggest a site to be included in their index visit the submission page

If you run a law related web site and would like to apply
for September's award, fill in the application form at

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4. Java Ruling

In another non related cyberlaw case brought in front of the 9th U.S.
Circuit Court of Appeals, the court has vacated a preliminary
injunction against Microsoft. 

In November Microsoft was ordered by U.S. District Judge Ronald Whyte
to fix its products, including Windows 98 and Internet Explorer, to
comply with Sun Microsystems' Java. Whyte ordered Microsoft to support
Sun's Java Native Interface and to stop using unauthorized compiler
extensions and keyword and compiler directives as the default mode in
Visual J++ 6.0, Microsoft's Java development tool.

In January, Microsoft appealed Whyte's injunction, while at the same
time saying it would continue to comply with the ruling. Last week the
Appeals Court vacated the ruling and remanded it to Whyte for further

But Microsoft's victory Monday is expected to be short lived. The Ninth
Circuit U.S. Court of Appeals sided with many points of Sun's argument
that it was wronged by Microsoft.

The judges lifted the injunction for the technical reason that Judge
Whyte didn't sufficiently substantiate some of the basis of his ruling.
In particular, they said he needed to explain whether shipping an
incompatible version of Java would violate Microsoft's license and
constitute a copyright violation or whether it would violate
independent contractual obligations instead. The judges also ruled that
Judge Whyte must decide whether Microsoft would act unfairly in the
future rather than basing his decision solely on the company's past

The appeals court also said it agreed with Judge Whyte that evidence
suggests that Sun will likely prevail at trial. Even a Microsoft
spokesman made a cautious statement, saying: "We view this ruling as a
positive step, but this is a long and complex case." 

The full text of the ruling is available from the 9th circuit website
(at the extremely long following URL):

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5. Cyberlaw news and 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.

* ICANN aproved domain name dispute policy *
The Internet Corporation for Assigned Names and Numbers (ICANN)
approved a policy requiring that domain name registrants submit to
third party arbitration if they are accused of registering a name in
"bad faith," such as garnering a name for the sole purpose of trying to
resell it to an offline trademark holder.
Currently, Network Solutions (NSI), the dominant registrar of domain
names, places names on hold when two parties cannot settle a dispute
over a name. Critics said the practice favors big businesses and others
who can't afford to file costly lawsuits seeking ownership.
The new policy aims to curb lawsuits and to give average registrants a
more balanced forum for negotiating the rights to a name. The cost of
the process will likely be split among the parties, although it is
unclear whether there will be a price cap. An ICANN advisory group
suggested keeping the cost under 900 dollar. The more than 60
registries accredited by ICANN will have to implement the policy.
The full policy is posted at ICANN's site:

* Intergraph files another motion against Intel *
Intergraph Corp., a workstation computer maker, filed a court motion to
force Intel Corp., the world's largest chipmaker, to comply with a
preliminary injunction assuring Intergraph access to product samples
and information. Intergraph alleges that Intel failed to comply with a
Federal court's injunction in April by "withholding or delaying
delivery of critical information, support and products." Intergraph
filed a broader lawsuit against Intel in November 1997 alleging patent
infringement, illegal coercive behaviour and antitrust violations. This
case is set to go to trial on February 2000.
Intergraph's new motion is available at:

* Police raides don't stop Canadian online gambling company *
Canadian Online gambling and pornography company 'Starnet
Communications' continued trading shares and operating its business
after police raided its offices last weekend. British Columbia's
Coordinated Law Enforcement Unit said that it was investigating
possible illegal betting and bookmaking offenses and allegations that
Starnet distributed illegal pornography over the Internet. It searched
Starnet's headquarters and the homes of six of its officers and
directors. No charges have been filed against the company or its
executives. Starnet said there were only "minor interruptions" to its
business and that the raids didn't affect its ability to pay off
winning bets on its online gambling sites.

* Student convicted of Internet piracy *
The U.S. Justice Department announced that Jeffrey Gerard Levy, 22, a
senior at the University of Oregon in Eugene, pleaded guilty to
violating the 'No Electronic Theft Act' of 1997. Levy admitted that he
illegally posted computer software programs, musical recordings,
entertainment software programs and digitally recorded movies on his
Internet web site. The University of Oregon reported the situation to
law enforcement officials after noticing that a large volume of
traffic was being generated from a Web site on its server. The FBI and
Oregon State Police discovered that thousands of pirated software
programs, movies and music recordings were available for download from
the site. Under the Act from 1997, anybody who distributes 10 or more
copyrighted works with a value of more than 2,500 USD can face up to 
three years in prison and a fine of up to 250,000 USD. Levy sentencing 
is scheduled for the begining of November.

* Sexual harrasment suit against Juno *
The Internet service provider (ISP) Juno Online is facing a 10 million
dollar sexual harrasment lawsuit. The suit alleges that Juno vice
president of strategic marketing Jordan Birnbaum ordered Lisa
Bongiorno, an employee he supervised, to have sex with him if she
wanted to keep her job. Bongiorno and Birnbaum allegedly began a sexual
relationship. Ten days after ending the relationship, Bongiorno
was allegedly fired. Juno acknowledged that Bongiorno was fired in
February but said the dismissal was "due to issues related to her job
performance. The company added that it does not tolerate sexual
harassment of its employees and has instituted strict policies for
preventing it.

* Hacker charged with hacking into pentagon computer *
Chad Davis, 19, described as the founder of a hacker group called
Global Hell, was charged with illegally gaining access to a Pentagon
computer. He was also accused of gaining access to an unclassified Army
network and removing and modifying its computer files to prevent

* Five years probation for Internet stock fraud *
Gary Hoke of North Carolina, who pleaded guilty to posting a fake
corporate takeover story on the Internet, was sentenced to five years
probation and ordered to pay more than 93,000 dollar in restitution.
Hoke must spend five months under home detention after pleading guilty
to two felony counts of securities fraud. Hoke was arrested in April
and charged with posting a bogus story that said PairGain, a 
California, telecommunications equipment company, would be bought by an
Israeli company in a billion dollar deal. The fabricated news story
appeared on a Web site purporting to carry stories from the respected
Bloomberg News. The story sent PairGain's stock soaring until the hoax
was revealed.

* Qualcomm not copying Motorola *
Judge Napoleon Jones from the U.S. district court in San Diego granted
Qualcomm's motion that its Q cell phone doesn't violate two Motorola
patents on the appearance and design of Motorola's StarTAC cell phone.
Judge Jones ruled that the Q phone doesn't violate Motorola's patents
because it doesn't have the appearance features that differentiate the
Motorola patents from designs that came before the patents. In
addition, Qualcomm also said it has filed new claims for patent
infringement by Motorola's Code Division Multiple Access (CDMA) phones,
including the StarTAC and other models.

* Ford, secret documents and the freedom of speech *
Ford Motor Co. won a temporary restraining order forbidding Robert Lane
of Michigan, to publish the contents of confidential company documents
on his Web site Lane built his site as a Ford
enthusiast early in 1998, but by year's end, he was posting
confidential company documents he received from Ford employees. Ford
filed the trademark infringement suit accusing of
using the Ford logo along with proprietary internal documents in an
inappropriate manner. It also accuses Robert Lane of soliciting its
employees for confidential information. 
Lane denies using the internal documents in an illegal manner and says
he did not solicit any employees of Ford to get them. He maintains they
were sent anonymously by admirers of the site who wanted the truth
about certain Ford products to be revealed.
A U.S. District Court Judge in Detroit issued a restraining order that
prevents BlueOvalNews from posting any more Ford documents and from
soliciting information from Ford employees, among other things.
Lane vows to keep publishing the site despite possible contempt of
court charges for disobeying the restraining order. On his web site he
wrote: "We will fight for the right to exist, to express our thoughts,
beliefs and emotions ... Many have fought for some of the same rights
we're on trial for today.... Martin Luther King Jr. and even Christ."
Lane insists he is simply trying to arm consumers with the most up to
date information so they can make informed decisions about which Ford
products to buy.

* Email bomb threats against IBM *
Authorities in New York have arrested Jahair Joel Navarro, 18, whom
they said sent an anonymous email threat to blow up IBM headquarters in
Armonk, New York, unless the computer maker paid him 5 million dollars,
similar threats were made against Microsoft. FBI agents and members of
the New York Police Department bomb squad found bomb making "recipes"
at Navarro's stepfather's apartment in Brooklyn.

* Is Smith the creator of Melissa? *
According to a spokesman for the New Jersey Attorney General's office,
David L. Smith,30, admitted to investigators that he created the virus
Melissa. Smith was arrested in April on felony counts including
interruption of public communications, theft of computer services and
damage or wrongful access to computer services. He was released on
100,000 dollars bail. Smith's attorney said he hadn't seen the
documents in which his client is said to have admitted creating the
virus. Smith has not been indicted yet so he has not given a formal
plea, but has denied guilt. 
The virus Melissa spread so quickly within one day that it forced the
shut-down of e-mail systems at companies including Microsoft Corp. and
Lucent Technologies Inc. Agencies tracking it estimated that tens of
thousands of users were affected.

If you know of any cyberlaw updates, please send them to

That's all for this time,
see you next week

Yedidya M. Melchior 

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