978-0134004006 Chapter 17 Lecture Note

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“Through the use of chat rooms, any person with a phone line can become a town

crier with a voice that resonates farther than it could from any soapbox. Through the

use of Web pages, mail exploders, and newsgroups, the same individual can become a

pamphleteer.” Justice Stevens

I. Teacher to Teacher Dialogue

Every generation has the good fortune, and sometimes misfortune, of being witness to events

that become the landmarks by which future generations will measure history. These landmarks

can take place during social upheavals such as the civil rights movements, horrible conflagrations

Originally intended only for a select group of military and academic uses, it has virtually

exploded onto every continent and every country to facilitate a level of communication never

concerned with all aspects of privacy concerns and intellectual property rights. The Internet is

impacting governmental regulation, employment law, consumer protection, business formation,

and agency laws today. We must take the lessons of history learned in those key areas of business

law and remember that they are rooted in an orderly legal system. How, when, and where do we,

proposals, while surely seen as imperfect by many, are evolutionary efforts to do the same for e-

commerce. They seek to expand the economic well being of our nation while still seeking to

DIGITAL LAW AND E-COMMERCE

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and good conscience.

The chapter also looks at licensing, highlighting the problems that arise in the instances of

licenses acquired for this form of intellectual property.

In the end, the art of teaching the law of e-commerce and the Internet is basically the same as

no choice: That is where this road is taking us. But we must have faith in the law’s ability to land

safely.

II. Chapter Objectives

1. Describe the laws that apply to e-mail contracts, e-commerce, and Web contracts.

2. Describe e-licensing and software law.

Commerce Act (E-Sign Act)

4. Describe laws that protect privacy in cyberspace.

III. Key Question Checklist

 How is an Internet domain name obtained and protected?

 Is a license or licensing agreement involved?

IV. Text Materials

E-commerce is the use of the Internet to sell goods and services. It has exploded over the last

Internet

The Internet is a collection of computers operating along an electronically connected network.

Digital Law and E-Commerce

World Wide Web – The standard for information exchange on the Web is HTTP. Documents on

E-Mail Contracts

Using e-mail, individuals around the world can instantaneously communicate in electronic

writing with one another. Contracts completed by using e-mail, referred to as electronic mail

Digital Law: Regulation of E-Mail Spam

The CAN-SPAM Act prohibits spammers from falsifying headers in e-mail messages, prohibits

Case 17.1 E-Mail Spam: Facebook, Inc. v. Porembski

2011 U.S. Dist. Lexis 9668 (2011), United States District Court for the Northern District of

California

Facts: Facebook alleged that Porembski registered as a Facebook user and was bound by the

SSR. Porembski created PP Web Services, LLC and was the sole person to act on its behalf.

Through fraudulent misrepresentations, Porembski obtained more than 116,000 Facebook users’

Issue: Did the defendants violate the CAN-SPAM Act?

Decision: Yes, the record demonstrates that the defendants willfully and knowingly violated the

Case Questions: Spam is simply unsolicited commercial advertising. The CAN-SPAM Act

prohibits spammers from using falsified headers in e-mail messages and prohibits deceptive

subject lines that mislead a recipient about the contents or subject matter of the message. The

Internet Service Provider (ISP) – ISPs provide e-mail accounts to users, Internet access, and

storage on the Internet. ISPs offer a variety of access devices and services, including dial-up,

E-Commerce and Web Contracts

been upheld.

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Case 17.2 Web Contract: Hubbert v. Dell Corporation

agreement that was contained in the Terms and Conditions of Sale. The plaintiffs countered that

the arbitration clause was not part of their Web contract because the Terms and Conditions of

Sale were not conspicuously displayed as part of their Web contract. The trial court sided with the

plaintiffs, finding that the arbitration clause was unenforceable because the terms and conditions

by the plaintiffs to claim that the Terms and Conditions of Sale were not included in their Web

contract with Dell. But terms and conditions of sale are always put up for the consumers’ and the

sellers’ safety during a trade. It serves more as a backup document in case of a lawsuit.

designed to recognize electronic signatures, giving them the same force and effect as a pen-signed

one.

Counteroffers Ineffectual Against Electronic Agent – Most Web pages use electronic ordering

E-Licensing

E-commerce created problems for forming contracts over the Internet, enforcing e-commerce

contracts, and providing consumer protection. To address these problems, in 1999, the National

Digital Law: Uniform Computer Information Transactions Act (UCITA)

UCITA established a uniform and comprehensive set of rules that govern the creation,

Digital Law and E-Commerce

limited rights.

E-License – The owner of the program or application is the electronic licensor, or e-licensor, and

for new statutes in this area.

Licensing Agreement – Usually, the parties enter into a written agreement that tends to be quite

detailed. This is primarily because of the nature of the subject matter and the limited uses granted

Privacy in Cyberspace

Recognizing that the use of computer and other electronic communications raises special issues

Electronic Communications Privacy Act – The ECPA makes it a crime to intercept electronic

activity.

Critical Legal Thinking – There is no constitutional “right to privacy” and perhaps no inherent

right to privacy as it pertains to electronic communications.

Domain Names

Registration of Domain Names – Domain names can be registered. The first step in registering a

Domain Name Extensions – The most common top-level domains are the .com, .net, .org, .info,

Digital Law: New Top-Level Domain Names

The new rules permit companies to have their own company name TLD, such as .canon, .google,

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.food, .basketball, and .dentist.

Cybersquatting on Domain Names – Sometimes a party will register a domain name of another

party’s trademarked name or famous person’s name. This is called cybersquatting. Trademark

Digital Law: Federal Law Prohibits Cybersquatting on Domain Names

In 1999, the U.S. Congress enacted the Anticybersquatting Consumer Protection Act (ACPA).

Club

Claim Number FA0609000803277 (2006) National Arbitration Forum

Facts: Moniker Online Services, Inc. (Moniker), registered the domain name <nyyankees.com>.

Moniker operates a commercial website under this domain name where it offers links to third-

party commercial websites that sell tickets to Yankee baseball games and sell merchandise

from Moniker.

Issue: Did Moniker violate the ICANN’s Uniform Domain Dispute Resolution Policy (Policy)?

Decision: Yes, the complaint has sufficiently demonstrated that Moniker’s <nyyankees.com>

domain name is confusingly similar to the complainant’s NEW YORK YANKEES mark.

Moniker uses the <nyyankees .com> domain name to operate a website providing links to third-

reasons is easy recognition and quick business tactics by deceiving customers.

Global Law – Internet in Foreign Countries

Many countries censure or control the use of electronic communications. There is no

international law that governs the Internet.

V. Key Terms and Concepts

 .aero—Used in the aviation community.

 .biz—Used in the small business community.

 .bz—Used in Belize.

in the world.

 .coop—Used by coops around the world.

Digital Law and E-Commerce

 .edu—This extension is for educational institutions.

names.

 .net—This extension represents the word network.

 .org—This extension represents the word organization and is primarily used by nonprofit

groups and trade associations.

 .pro—Professionals such as doctors and lawyers use this extension.

websites.

 Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM

Act)—The CAN-SPAM Act prohibits spammers from using falsified headers in e-mail

messages and prohibits deceptive subject lines that mislead a recipient about the contents or

subject matter of the message.

she claims to be.

 Domain name—A unique name that identifies an individual’s or company’s website.

 Electronic agent—Any computer system that has been established by a seller to accept

orders.

 E-commerce—The sale of goods and services by computer over the Internet.

communications.

 Electronic license—A contract whereby the owner of software or a digital application grants

limited rights to the owner of a computer or digital device to use the software or digital

application for a limited period and under specified conditions.

 Electronic licensee—The owner of the computer or digital device to whom the license is

granted is the electronic licensee, or e-licensee.

licensor.

 Electronic mail (e-mail)—Electronic written communication between individuals using

computers connected to the Internet.

 Electronic mail contract—A contract that is entered into by the parties by use of e-mail.

 Electronic signature—The E-SIGN Act recognizes an electronic signature, or e-signature.

States.

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rights for a specified duration.

 Internet—A collection of millions of computers that provide a network of electronic

connections between computers.

 Internet Corporation for Assigned Names and Numbers—The organization that oversees the

registration and regulation of domain names.

usually short period of time.

 Licensee—The party who is granted limited rights in or access to intellectual property or

informational rights owned by the licensor.

 Licensing agreement—Detailed and comprehensive written agreement between the licensor

and licensee that sets forth the express terms of their agreement.

the licensor to licensee.

 Licensor—The owner of intellectual property or informational rights who transfers rights in

the property or information to the license.

 Spam—Unsolicited commercial advertising.

 Top-level domain names—Prior to 2011, there were 22 top-level domain names (TLDs). The

and software and information licenses.

 Web contract—A contract that is entered into by purchasing, leasing, or licensing goods,

services, software, or other intellectual property from websites operated by sellers, lessors,

and licensors.

 Website—Large and small businesses sell goods and services over the Internet through

websites and registered domain names.