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The Mishpat-Update #28

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

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In this issue:

1. Introduction
2. Israeli Domain name ruling
3. News from the Microsoft trial
4. Cyberlaw news and updates


1. Introduction

I would like to welcome the 20 new subscribers who joined the list this

Next week I will add a regular section to this newsletter caller
"Cyberlaw resource of the week", featuring a law-related web site, book
or Ezine. If you want to recommend resources of any kind, just send an
email with a short description to

In previous issues we have looked at rulings from many different
countries including Australia, Canada, The U.K., Holland and the U.S.
This week's feature article describes a recent ruling in a domain name
dispute in Israel. If you want to tell me about cyberlaw news from your
country, don't forget to send it to me.

In the center of this weeks' cyberlaw news, were the closing arguments
in the Microsoft antitrust trial. As usual, the last section of this
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 1-25) 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. Israeli Domain name ruling

In previous issues we have looked at many domain name disputes from
around the world. This time we take a look at the first Israeli ruling
regarding domain names and trademarks. The decision by Judge Yehuda
Zaft, from the Tel Aviv District court, was issued September 8th.

Cellcom, one of the largest Israeli cellular phone companies, asked the
court for an injunction preventing Internet Service Provider (ISP)
Aquanet from using the domain name (il is the Israeli
top level domain. Each country has a specific two letter top level
domain, for example .uk is for sites registered in the United Kingdom,
.au for Australian sites and .no for Norwegian sites).
Cellcom has registered "cellcom" as a trademark in Israel, and
currently operates its web site under the address

The Israeli domain name rules, drafted by the Israeli chapter of the
Internet society, are different from the international rules. The
international .net top level domain name is open to all for
registration. Registering an address ending with requires
certification from the Israeli Communications Ministry, the certificate
is only given to ISPs. 

Cellcom planned to start offering Internet services, but when trying to
register the domain it learned that Aquanet had already
registered that name. Aquanet used that domain to offer a new service
that enables users to receive their email on their cellular phone.

Judge Zaft agreed with Cellcom that its massive investment in
advertising has made the brand name 'cellcom' famous in Israel. The
fact that Cellcom doesn't yet offer Internet services, doesn't mean
that Cellcom's reputation doesn't exist in that market. Judge Zaft also
noted that it would be an absurd requirement to ask Cellcom to operate
under a different name when offering Internet services, after its
enormous investment in advertising the name 'cellcom'. 

Aquanet claimed that the .net in is similar to the
Ltd in a limited company's name. Therefore the name is
distinct from the name cellcom and is not necessarily held by the same
company. Judge Zaft did not agree with this reasoning. He said that
since a company can hold both marks and
the .net is not distinctive.

Judge Zaft agreed with Cellcom that it's mark is so famous in Israel
(about 20% of Israeli's have a Cellcom phone) that visitors to the site
might think that Cellcom is involved in this project. The confusion
might also arise from that fact that almost all the telephone companies
in Israel also act as ISPs or have a joint venture with ISPs.

Further more, Judge Zaft ruled that Aquanet's email to cellular service
is actually a cellular phone service, the area in which Cellcom has
built it's reputation. Cellcom also offers a similar service that it
has advertised using the name "Cellcom Text", that raises the concern
that users might be confused and think that Cellcom is backing
Aquanet's service. 

Judge Zaft ordered Aquanet to stop using the domain name, it can of course still offer it's email to cellular
service under another domain name.

It should be noted that Aquanet also registered the .net domains of the
two other large cellular phone companies in Israel - Pelephone and

The full text of the decision (in Hebrew) is available at Haim Ravia's
legal links site:

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3. News from the Microsoft trial

Hoping to convince Federal Judge Thomas Penfield Jackson that Microsoft
is trying to protect its monopoly rather than please customers, U.S.
Department of Justice (DOJ) attorneys summed up their case during
closing arguments in the Microsoft antitrust trial Tuesday. Later that
afternoon, Microsoft Corp. systematically denied every accusation
leveled against it by the DOJ in its final arguments in the landmark
antitrust case. 

Steve Houck, senior counsel in the New York State Attorney General's
Office, asked the judge to define the market for the purposes of the
case as the Intel based PC operating system market. He then pulled out
a previously submitted document showing that Microsoft has had more
than a 90 percent share of that market since 1991. Houck said no
company has been able to make even a dent in that market because of
high barriers to entry. He said even Microsoft's own witnesses have
supported that view, including a Compaq executive and an economist who
testified that no commercially viable alternatives to Windows exist at
this time. As a result of its monopoly, Houck said the company had been
able to keep its prices artificially high.

Lead DOJ attorney David Boies revisited dozens of documents, including
some of Microsoft's own internal memos, in an attempt to show that
Microsoft acted only to protect its monopoly, not to improve Windows.
Boies said Microsoft acted illegally by, among other things, tying the
browser to Windows, restricting computer makers from changing the
boot up screens, and requiring ISPs' content providers and companies
(such as Apple Computer Inc. and Intel Corp.) to promote its browser
while limiting the distribution of Netscape's rival browser. Boies
spent much of his allotted time addressing the browser issue, which
originally sparked the antitrust case last year. But he also pointed to
documents showing that Microsoft tried to crush other threats to its
desktop dominance, including Java and multimedia software developed by
Intel Corp. 

Microsoft's lead attorney John Warden bluntly struck back at the DOJ's
case. Warden claimed "The case was meritless when brought and it
remains meritless". Warden sought to paint a picture of a cabal,
including Sun Microsystems, Netscape and IBM  all joining forces "for a
coordinated attack on Microsoft."

The Microsoft lawyer tried to blunt Justice's central assertion that
Microsoft holds an operating system monopoly. He invoked high developer
interest in Java and Macintosh, two smaller and more specialized
operating systems.
Warden dismissed the DOJ's accusation that Microsoft effectively
foreclosed Netscape from key avenues of distribution as "pure baloney,"
and showed Goldman Sachs data showing Netscape use will grow 21 percent
by 2005. He said that Microsoft often bundled extra capabilities, such
as a web browser, into the operating system to give users a better

Warden closed by reiterating that no consumer has ever been hurt by
Microsoft's aggressive business tactics and that the company should be
lauded for its success.

Judge Jackson is expected to issue a series of ruling on these issues
in the coming months, but the case is could be tied up in appeals for
years after that.

The full cover of the Microsoft trial, including full text of
depositions, is available from ZDNet:

In another update regarding the Antitrust trial, a report by the New
York Times claims that Microsoft Corp. funded newspaper advertisements
and travel expenses of an organization that has been knocking the
government's antitrust lawsuit. David Theroux, the foundation's
president, defended Microsoft's donation and said the funding "doesn't
make any difference to the scientific process."

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4. 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.

* Sony want artists' name for life *
Sony Music has added a controversial provision to its standard
contracts, that gives the company ownership over an artist's name, as
well as any variation of it, for use as a domain name. The clause is
written as a lifetime provision that would apply even if the artist and
Sony part ways. The contract appears to reflect a fear at Sony that it
may lose control over its artists through the Web. This might be an
interesting change in the online music arena, since artists' web sites
do not only sell music, but also T-shirts, mugs and other souvenirs.
The web site also enables the artist to keep in touch with his/her
fans. Sony might use their ownership of the websites, to prevent
artists from moving to other record companies.
An Interesting article is available from Cnet:

* US to ease encryption export control *
The Clinton administration recommended easing encryption export
controls, lifting restrictions on companies looking to use strong U.S.
security software overseas. The White House proposed allowing the
export of software or hardware using any encryption key length without
a license. The changes would let U.S. vendors export encryption
products to companies and non government users after a one time
technical review by the U.S. Department of Commerce. According to the
announcement, companies will still need to report encryption exports
and are barred from sales to seven nations (Iran, Iraq, Cuba, North
Korea, Libya, Syria and Sudan) that the U.S. government has identified
as supporters of terrorism. 
U.S. technology companies and legislators have been pushing to overturn
the export restrictions, which they say undermine global
competitiveness and the expansion of e-commerce and online privacy.
Until now, those arguments have been overruled by law enforcement
agencies, which argued that strong encryption would be exploited by
terrorists and criminals. The administration said the FBI's Technical
Support Center will receive  million dollars to help federal, state
and local law enforcement officials investigate the use of encryption
by criminals. 
The proposed Cyberspace Electronic Security Act would also allow law
enforcement agencies to go to court to access decryption keys held by
third parties.
The full text of the proposed bill is available at:

In other related news, Apple Computer is trying to persuade the U.S.
government to lift restrictions on exports of the new PowerPC G4
processor based Power Mac systems. The Power Mac G4 is so fast that it
is classified as a super computer by the U.S. government, and Apple is
prohibited from exporting it to over 50 nations worldwide. Apple is
working toward getting the U.S. authorities to lift the export
restrictions to the listed countries.

* Crack down on international porn ring *
The U.S. Federal Trade Commission (FTC) announced that it has won a
federal injunction against an international porn ring, run by a company
called W.T.F.R.C., that cloned 25 million Web pages and "hijacked"
unsuspecting visitors to its porn sites. 
When consumers used search engines to find subjects as innocent as
'Kids on the Net,' 'News about Kosovo,' or 'wedding services,' they
risked being exposed to sexually explicit images. The FTC alleged that
the group "page jacked" 25 million legitimate Web pages by copying them
in their entirety and either resubmitting them with search engines such
as AltaVista and Yahoo! or waiting for automatic crawlers to do the
work for them. The purloined pages included those of the Harvard Law
Review and the Japanese Friendship Garden. Web surfers using search
engines would choose sites with legitimate names and descriptions, but
be instantly redirected to porn enclaves.
Australian law enforcement raided eight W.T.F.R.C. facilities and
seized numerous servers as evidence. FTC officials said the Portuguese
'Instituto do Consumidor' had cooperated in investigations of Carlos
Pereira, owner of W.T.F.R.C.,4586,2339568,00.html

* Intel sues porn 'Pentium' web site *
Intel Corp., the manufacturer of the wildly popular Pentium computer
chips, filed a lawsuit against Newtown Communications and its owners,
asking to permanently shut down a pornographic Web site that uses the
address According to the suit, the word Pentium is a
"unique" trademark that was "coined and created" by Intel, the suit
says, noting that the word does not have any dictionary meaning in the
English language.
On the Internet, Intel has established three Web sites that use the
Pentium name:, and The suit
claims that the domain was chosen in a deliberate attempt
to benefit from the fame and worldwide recognition of Intel's Pentium
mark and to drive traffic to the site by drawing users who had intended
to visit Intel's Web site.
When Intel's lawyers demanded that Newtown cease operation of the site,
the suit says, Newtown responded by demanding ,000 in exchange for
the rights to the registration.

* French government investigates Microsoft *
The French Finance Ministry confirmed reports that it's checking on
complaints concerning Microsoft Corp. business activities in the
country. Complaints about Microsoft are being investigated, but no
conclusion has been reached about their merit or whether further action
may be necessary, according to a statement prepared by the ministry. 
A growing number of consumers in France have been irked at having to
pay for Microsoft software that comes bundled with computers, but which
they don't use. Some French resellers also are at odds with Microsoft,
because they say they can get the company's software more cheaply from
distributors outside of France than from Microsoft France itself.

* Infoseek executive arrested in online sex scandal *
Patrick Naughton, the Infoseek executive vice president in charge of
Walt Disney Company's Web sites, has been arrested and charged with
using the Internet to solicit sex with a minor. Naughton, 34, was
arrested in Santa Monica, California, where he had been lured by
electronic messages from a male FBI agent posing as a 13 year old girl.,4586,2337103,00.html

* iMac look alike to change design *
In August, Apple Computer filed suit against Sotec, a computer
manufacturer from Tokyo, seeking to block sales of the Japanese
computer maker's eOne, which features a case similar to Apple's best
selling iMac. Sotec has now announced that next month it will begin
selling a remodeled version of eOne that will be distinct from the
popular iMac. This announcement came after the Tokyo District Court on
Monday imposed a preliminary injunction on production and sales of the
eOne while it considers the suit.

* You've got male *
America Online Inc. (AOL) has demanded self published author Madelene
Sabol, to stop selling her advice book "You've Got Male" because the
title sounds too much like the Internet company's well known phrase
"You've Got Mail" that tells users that they have received e-mail.
Sabol, who wrote the book on Internet relationships after her own
devastating experience, said she had no intention of bowing. 
As reported in previous issues of Mishpat Update, this past August AOL
lost a lawsuit asking to stop AT&T from using that slogan on it's mail

* Intel wins round in Intergraph case *
U.S. District Court Judge Edwin Nelson ruled that Intel Corp. didn't
violate an order requiring it to do business with computer maker
Intergraph Corp. as if it were any other customer. Judge Nelson ordered
the companies to appoint an ombudsman to act as a mediator between

* US West faces trouble in New Mexico *
New Mexico regulators is about to open an investigation of Internet
Service Provider US West, that could potentially undermine the
company's right to operate in that state. According to New Mexico
public utility commissioners, citizens have filed close to 1,500
complaints about the company since January 1998.

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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