978-0078023866 Chapter 18 Internet Exercise and Supplements

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Chapter 18 – Internet Law and Ethics

Internet Exercise and Supplements

Answer to Internet Exercise (p. 813)

1. Students’ answers will differ based on the vendor’s web site they choose to look at. At the time

this was going to print, the following were examples that students might have found:

Answers

Answers to ‘The Digital Divide’ Questions (p. 782)

1. Students’ answers will vary. Some may say that Internet cafes are one way of approaching the

2. Students’ answers will vary. Some may say that as other countries catch up to the U.S. in terms of

Answer to ‘Net Neutrality’ Question (p. 783)

1. Students’ answers will vary. Some may say that arguments for such tiered pricing, in addition to

Answer to ‘Jurisdiction to Adjudicate’ Question (p. 784)

1. The 7th Circuit in be2 LLC v. Ivanov, 642 F.3d 555 (7th Cir. 2011), found that there was “no

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Chapter 18 – Internet Law and Ethics

Answers to ‘Privacy Policies: Did Someone Say Privacy?’ Queestion (p. 796)

1. Customers purchase products on Amazon trusting that their data will not be hacked into, and their

Answers to ‘Top-Level Domain Name Sale’ Questions (p. 811)

1. This question needs to be looked at from various angles. The TLD should be awarded to that

entity that approaches ICANN. Giving out TLDs like .hindu, .muslim, .bah’ai and so on, just

2. Whenever something new is created technologically, there are always those who miss out due to

3. Once again, the question wishes to analyze an ethical issue. There is every chance that the

4. It does seem at this point that a company owns more than the required number of TLDs. This

Answer to “Bitcoin: The Rise and Fall of a Virtual Currency” Question (p. 813)

1. Although online currency is a novel concept, it has a long way to go before it is fit enough to be

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Chapter 18 – Internet Law and Ethics

Cases and Answers

YAHOO! v. La Ligue Contre Le Racisme Et L’Antisemitisme, 169 F. Supp. 2d

1181 (N.D. Cal. 2001) (p. 785)

Syllabus

The defendant is a non-profit organization in France dedicated to the elimination of

anti-Semitism. It filed a civil complaint in a French court against Yahoo! for violation of a

French law against the sale of Nazi and Third Reich goods, based on the fact that Yahoo!

maintains an internet auction site. The auction site allows anyone to post an item for sale and

solicit bids from any computer user from around the globe. Yahoo! itself is never a party to any

sale. The French court entered an order which, among other things, required Yahoo! to

eliminate French citizens’ access to any of the offending material and imposed a penalty for

each day that Yahoo fails to comply. Yahoo! requested reconsideration of the order, which was

modified in part, but largely just reaffirmed by the French court. Yahoo! then filed a complaint in

a U.S. federal district court seeking a declaratory judgment that the French order is neither

cognizable nor enforceable in the U.S. Defendant moved to dismiss for lack of personal

jurisdiction. The issue raised, said the district court, is “whether it is consistent with the

Constitution… for another nation to regulate speech by a United States resident within the

United States on the basis that such speech can be accessed by Internet users in that nation.

In a world in which ideas and information transcend borders… the implications of this question

go far beyond the facts of this case.” It granted the motion for summary judgment in favor of

Yahoo!, concluding, “Absent a body of law that establishes international standards with respect

to speech on the Internet and an appropriate treaty or legislation addressing enforcement of

such standards to speech originating within the United States, the principle of comity is

outweighed by the Court’s obligation to uphold the First Amendment.” [Afterword: In 2006, the

Ninth Circuit ruled 8-3 that the district court had personal jurisdiction over the French

defendants, but 6 judges held that Yahoo! could not pursue its declaratory judgment action.

Three of those six said the declaratory judges was not “ripe” while the other three were the

minority that held the court lacked personal jurisdiction. The U.S. Supreme Court denied

review.

Answers to ‘YAHOO! v. La Ligue Contre Le Racisme Et L’Antisemitisme’ Questions (p.788)

1. To ascertain the jurisdiction over Yahoo! France is relatively easy—it regularly carries on business

in France. However, to ascertain the jurisdiction over Yahoo! Inc. is more problematic. To be

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Chapter 18 – Internet Law and Ethics

2. This question will generate a good class discussion. Obviously there is room for differences—

3. Yes, but it illustrates an exception to the general rule provided there. The Second Circuit indicated

Immunomedics v. Jean Doe, 775 A. 2d 773 (N.J. 2001) (p.790)

Syllabus

An anonymous poster, “moonshine_fr,” left a message on an Internet board maintained by

Yahoo! Finance that plaintiff, Immunomedics, Inc., alleged contained confidential and

proprietary information. Immunomedics therefore filed a complaint against “Jean Doe” alleging

breach of the company’s confidentiality agreement, breach of the duty of loyalty and negligent

revealing of confidential and proprietary information. (All of these were based on the

presumption that only an employee or former employee would have access to the posted

information.) Immunomedics then had a subpoena served on Yahoo! seeking all personally

identifiable information relating to the Yahoo! user with the identifier, “moonshine_fr.” Jean Doe

moved to quash the subpoena and now appeals the denial of her motion, claiming that

anonymous speech is constitutionally protected and Immunomedics’ complaint is insufficient to

warrant a breach of that anonymity. The court indicated this balancing had to be done on a

case-by-case basis, and that it would require any plaintiff to take certain steps notifying the

anonymous poster of its application for an order of disclosure and, also, to produce evidence

to the court supporting each element of its cause of action. Finding that Immunomedics had

produced sufficient evidence of each element (that the poster was an employee, that all

employees are bound by a confidentiality agreement that would prohibit such postings, that the

information posted was confidential and proprietary), the court affirmed the lower court’s order

that the subpoena be enforced.

Answers to ‘Immunomedics v. Jean Doe’ Questions (p. 791)

1. Whether there was intent or not, defaming or posting restricted materials, is a punishable offense.

2. No. The Supreme Court has previously held that pornography is not protected under the First

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Chapter 18 – Internet Law and Ethics

3. All of these individuals have a free speech right to which a right of anonymity is attached but, as

Metro-Goldwyn-Mayer Studios v. Grokster, 125 S. Ct. 2764 (2005) (p. 806)

Syllabus

Grokster and StreamCast distribute free software that allows users to share electronic files

through peer-to-peer networks. MGM sued them to hold them responsible for their users’

distributed their software to enable users to reproduce and distribute copyrighted works in

violation of the Copyright Act. The district court granted summary judgment for defendants and

the circuit court affirmed. The Supreme Court held the grand of summary judgment was in

error and vacated and remanded. It found that Grokster and StreamCast conceded the

infringement by users in most downloads. More importantly, it held that defendants were not

“merely passive recipients of information about infringing use.” Rather, they “clearly voiced the

objective that recipients use it to download copyrighted works, and each took active steps to

encourage infringement.” Further, they both financially benefited from such infringement

because the more their software was used for downloading, the more advertising dollars they

received from advertisers on their websites. “[T]here is evidence of infringement on a gigantic

scale, and there is no serious issue of the adequacy of MGM’s showing on this point.”

Answers to ‘Metro-Goldwyn-Mayer Studios v. Grokster’ Questions (p. 808)

a. They held that one, who distributes a device with the intent of promoting its use to infringe

b. Contributory copyright infringement is intentionally inducing or encouraging direct

c.The Court distinguished the earlier Sony case which the circuit court had relied on. In the

2. No. The network Grokster helped establish and still exists and it is likely that users will still

continue to download copyrighted material. Further, other mechanisms also exist for the illegal

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Chapter 18 – Internet Law and Ethics

3. No. The Supreme Court did not hold that all peer-to-peer technology was illegal, only that

4. This question will result in a friendly, but intense discussion. At least one commentator believes

Grokster and its ilk have acted unethically, because their technology “was in reality specifically

Answers to Chapter Questions (p. 814)

1. The concern is that countries which do not or cannot actively enter into the information age will be

2. Over a period of time, shopping online can turn into an obsession, from what was previously

3. Although Mohrbacher claims he had no knowledge of the link containing child pornography, the 9th

Circuit Court ruled that an online bulletin board is like a shelf off which can be taken material the

a. Legally speaking, the First amendment does protect online bloggers and persons

who wish to express free speech. However, there is a limit to which he or she can

b. This is a very subjective question. Students’ answers will vary. If a trade secret

5. At a minimum, Melle apparently violated the act when he put “aol.com” in the e-mail headers. The

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Chapter 18 – Internet Law and Ethics

6. McLaren had no reasonable expectation of privacy. McLaren’s messages were received in a

company network accessible to third parties. Thus, his messages, initially at least, weren’t

7. The court declined to assert personal jurisdiction in New York because King received no revenue

8. NAFED lost. It violated the copyright agreement on the clip art.

9. As demonstrated in this chapter, the internet raises many old issues in new contexts—and the

Supplementary Cases

I. MINK v. AAAA Development, 190 F. 3d 333 (5th Cir. 1999) (See Jurisdiction to

Adjudicate, p. 784)

Syllabus

Mink, a Texas resident, developed a specialized computer program, for which he submitted a patent

application. He was approached by a Colorado resident, Stark, at a trade show about marketing his

program. They had some continuing contact following up on the possibility and Mink gave Stark a full

demonstration of his program. Allegedly Stark then shared Mink’s ideas and information with a

Vermont resident, Middlebrook, and a Vermont corporation, AAAA Development. Mink alleges that

these Vermont entities conspired to copy Mink’s system to create a system of their own. Mink brought

suit in Texas. Middlebrook and AAAA moved to dismiss for lack of personal jurisdiction. Mink argued

personal jurisdiction existed because the defendants had been actively targeting customers in Texas

and AAAA’s website was accessible from Texas.

The court found that for personal jurisdiction to be had Texas must have a long-arm statute

that would reach Middlebrook and AAAA and exercise of personal jurisdiction must be

consistent with the due process clause of the Constitution. As Texas’ long-arm statute had

been interpreted to reach as far as the Constitution allows, in this case these two

considerations are identical.

For constitutional purposes, defendants must have certain minimum contacts with Texas such

that the exercise of jurisdiction would not offend “traditional notions of fair play and substantial

justice.” The court then looked at the nature and quality of contacts possible over the internet.

At one end, some entities do business by actually entering contracts over the internet with

residents of other states, contracts which involve the “knowing and repeated transmission of

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Chapter 18 – Internet Law and Ethics

computer files.” The court found personal jurisdiction would be proper in those cases. On the

other extreme, some individuals simply establish passive web sites that do nothing more than

advertise. In these cases, personal jurisdiction would be inappropriate. The court then found

that AAAA’s web site was more like the latter than the former and held that no personal

jurisdiction in Texas was available.

II. Urofsky v. Gilmore, 167 F. 3d 191 (4th Cir. 1999) (See Speech, p. 788)

Syllabus

Six professors, employees of public institutions of higher learning in Virginia, brought a suit

challenging under the First Amendment a Virginia law restricting state employees from

accessing sexually explicit material on computers owned by the state without prior approval in

writing from their “agency head.” The court pointed out that the professors remained free to

access this material from their own computers. It found that the Act does not regulate the

speech of citizenry in general, but rather only the speech of state employees in their capacity

as employees. As such, the court found the speech may be restricted.

III. State v. Heckel, 24 P. 3d 404 (Wash. 2001) (See Commercial Speech, p. 791)

Syllabus

Washington filed suit against Heckel, an Oregon resident, for violation of a Washington law

prohibiting anyone sending commercial e-mails from using a third party’s domain name without

permission, misrepresenting or disguising the message’s point of origin or transmission path,

or using a misleading subject line. Heckel marketed a 46-page booklet, “How to Profit from the

Internet,” by sending unsolicited commercial e-mail (spam) to potential buyers (100,000 to

1,000,000 messages per week). Both parties filed for summary judgment and the trial court

found in favor of Heckel, holding that the Washington statute violated the Commerce Clause

by being “unduly restrictive and burdensome” on interstate commerce. On appeal, the

Washington Supreme Court that the statute was not unconstitutional because (1) it was not

facially discriminatory against interstate commerce and (2) the statute’s local benefits surpass

any alleged burden on interstate commerce. Specifically, on the second point, the court found

that, to handle the increased e-mail traffic, ISPs must invest in more equipment, that owners of

the misused domain names are economically harmed when recipients of the unwanted mail try

to respond, and that the e-mail recipients themselves lose time dealing with the unwanted mail

and may suffer economic harm if they do not have flat-rate plans for internet access. On the

other side, “the only burden the Act places on spammers is the requirement of truthfulness, a

requirement that does not burden commerce at all but actually ‘facilitates it …’” The court

pointed out that spammers actually incur costs by noncompliance with the statute’s provisions

“because they must take steps to introduce forged information into the header of their

message …” Held for the state.

IV. United States of America v. Scott M. Hambrick, 55 F. Supp. 2d 504 (W.D. Va.

1999) (See Privacy, p. 792)

Syllabus

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Chapter 18 – Internet Law and Ethics

Hambrick, a Virginia resident, was criminally charged with illegal activities stemming from his

on-line solicitation of a minor boy from another state to come live with him. At his criminal trial,

he moved to have suppressed all evidence obtained from his internet service provider (ISP)

and all evidence discovered in his home as a result of the police having obtained identifying

information from his ISP.

Hambrick’s activities were discovered by an off-duty police officer from New Hampshire, who

encountered Hambrick in a chat room operating under an alias. The chat room activity led the

officer to believe that criminal activities were occurring. In order to identify the individual behind

the alias, the officer obtained a New Hampshire subpoena, which he then served on

Hambrick’s ISP in order to obtain Hambrick’s true identity, address and phone numbers. The

ISP complied with the subpoena, the information was obtained and ultimately a criminal suit in

Virginia was brought.

Hambrick argued use of the information violated his Fourth Amendment rights because the

information was protected unless a valid warrant was obtained. (All parties agreed the

subpoena was invalid.) The court found that the government is not required to obtain a warrant

if the information it is seeking is such that the defendant (1) does not have a subjective

expectation of privacy in the invaded place or (2) any such privacy expectation is not one

society accepts as “objectively reasonable.” Granting that Hambrick had a subjective

expectation of privacy in the information from his ISP, the court found that it was not an

expectation society would accept as reasonable. The Electronic Communications Privacy Act

could not be said to give citizens such a privacy expectation, because it only required ISPs to

be presented with a warrant before giving information to the government, but did not in any

way prohibit them from giving personal information on their users to any nongovernmental

entity. Further, Hambrick had not entered into any restrictive agreement with his ISP prohibiting

their giving his information to others. Had his ISP given the information to the government

without the subpoena (which the ISP could not have known was invalid), then Hambrick could

have sued his ISP for damages. But Hambrick had no recognizable expectation of privacy and,

thus, his Fourth Amendment rights were not violated.

V. M.A. Mortenson Company v. Timberline Software Corporation, 970 P. 2d 803

(Wash. Ct. App. 1999) (Contracts and Uniform Laws, p. 802)

Syllabus

Mortenson licensed software from Timberlake for use in preparing construction bids.

Mortenson in fact used the software to prepare a particular bid and later discovered that a bug

in the software resulted in the bid they submitted being $2 million too low. When Mortenson

sued Timberline for damages, Timberline defended by pointing to the license agreement they

distribute with their software which disclaims any responsibility for consequential damages

associated with using the software. Mortenson argued that the license agreement was not part

of their contract both because (1) their contract only included the terms contained in the

purchase order, not the license agreement which was not even provided until after the

purchase was made and (2) that, in any case, the license agreement was not part of their

agreement. The trial court granted summary judgment in favor of Timberline.

The court found that the purchase order was not an integrated contract and therefore did not

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Chapter 18 – Internet Law and Ethics

prevent the license agreement from being part of the parties’ agreement. In part the court

relied on the fact that Mortensen had licensed other software packages, which themselves

contained similar terms to Timberline’s license agreement here. The court further found that

the license terms were enforceable. It pointed to numerous accepted transactions where the

consumer did not receive all of the terms of the agreement until after the purchase was made,

including airline tickets. As the purchaser was entitled to return for a refund if they objected to

the terms of the license agreement, those terms were enforceable if the purchaser kept and

used the software.

VI. Kelly v. Arriba, 280 F. 3d 934 (9th Cir. 2002) (See Copyrights, p.805)

Syllabus

Kelly is professional photographer who has copyrighted many of his images and makes some

of them available over the internet both from his own site and through other licensed sites.

Defendant operates an internet search engine that displays its results in the form of small

“thumbnail” pictures, rather than in text. Defendant reproduced some of Kelly’s images to

create these thumbnails and then used them in its search engine. It further displayed Kelly’s

images through processes of both inline linking and framing, which occur when a user clicks

on the thumbnail picture brought up by the search engine. Kelly sued for copyright

infringement. Arriba defended, arguing it was entitled to rely on the fair use exception to the

claimed infringement. The court evaluated the four factors set out in the copyright law that are

to be considered in determining whether a particular use comes under the fair use exception. It

found that the thumbnails themselves did come within the exception, but that the inline linking

and framing were not permissible.

Selected Bibliography

Associated Press, “DoubleClick Retreats on Database Plan,” Waterloo-Cedar Falls Courier, March 3,

2000, p. C5.

Associated Press, “FTC: No Net Laws for Privacy,” Atlanta Journal and Constitution, July 13, 1999, p.

3E.

Ted Bridis, “Microsoft to Require Privacy Promises on Internet Sites,” Des Moines Register, June 24,

1999, p. 8S.

Jimmy Burns, “Electronic Crime ‘Beating Regulators’,” Financial Times, September 1, September 14,

1999, p. 2.

Anne R. Carey and Jerry Mosemak, “Clicking with Others,” USA Today, June 3, 1999, p. 1A.

Randall Davis, “The Digital Dilemma,” Communications of the ACM, February 2001, p. 77.

Thomas Donaldson, “Ethics in Cyberspace: Have We Seen This Movie Before?,” Center for Business

Ethics, Bentley College, February 5, 2001.

Carl T. Hall, “FTC Wants to Regulate Online Pharmacies, “San Francisco Chronicle, July 31, 1999, p.

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Chapter 18 – Internet Law and Ethics

A2.

“Have On-Line Investing Ads Crossed the Ethics Line?,” USA Today, May 10, 1999, p. 3B.

Jessica Lee, “Bill Would Protect Trademarks, Names from Cybersquatters,” USA Today, August 3,

1999, p. 8A.

Brian McGrory, “Alienation Finds a Future on Web,” Boston Globe, July 16, 1999, p. B1.

Patrick McMahon, “Judge Agrees Web Site a Threat,” USA Today, February 26, 1999, p. 2A.

Dave Merrill, “How Marketers ‘Profile’ Users,” USA Today, November 8, 1999, p. 2A.

David Phelps, “Amazon Bookstore and Amazon.com Agree to Coexist,” Minneapolis Star Tribune,

November 5, 1999, p. 1D.

Julie Schmit, “Microsoft Makes Inroads on Pirated Software,” USA Today, March 10, 1999, p. C2.

John Simons, “FTC to Curb Medical Sale Pitches on Web,” The Wall Street Journal, June 24, 1999, p.

A2.

John Simons, “New Internet Privacy Laws Appear Less Likely with Release of New Survey,” The Wall

Street Journal, May 13, 1999, p. B9.

John Snell, “Lawyers Drawn to Unsettled Internet; Lots of Legal Issues, Large and Small, Must Be

Sorted Out,” Minneapolis Star Tribune, November 29, 1999, p. 6D.

Noble Sprayberry, “Confronting the Cookie Monster,” San Diego Union-Tribune, August 22, 1999, p. I9.

“Student Faces Piracy Sentence,” Des Moines Register, August 21, 1999, p. 6S.

Susan Warren, “I-Spy: Getting the lowdown on your competition is just a few clicks away,” The Wall

Street Journal, January 14, 2002, p. R14.

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