ELECTRONIC BUSINESS TRANSACTIONS

• Issues Covered in Chapter– Jurisdiction– Infringement and Cybersquatting– Internet Privacy and Database Protection– E-Commerce and E-Contracting– Internet Securities Transactions– Global Cooperation– Ethics In Marketing, Fraud and Confidentiality

JURISDICTION

• Jurisdiction-power of domestic court over foreign defendant in E-Commerce– Jurisdictional Rules Determined Mostly by

Case Decisions Rather than Statute in E-Commerce

– Bensusan Case-Web Site insufficient. Even though trade name used on Web Site, plaintiff must establish loss of revenue due to unauthorized use of trade name.

– Cybersell Case-Internet advertising insufficient contact for jurisdictional purposes.

JURISDICTION

• Jurisdiction Case Analysis Continued• Compuserve v. Patterson-Patterson used

Compuserve internet facilities to distribute products to customers. Shareware Issue. Purposeful Availment.

• Zippo Case-Defendant intended to engage in commerce in Forum State and derived revenues in forum state. Purposeful Availment.

• European Union-see Capsule 15.3

TRADEMARK INFRINGMENT AND CYBERSQUATTING

• Definitions• Infringement-unauthorized use for profit on a

licensed owner trademark or trade name.

• Cybersquatting –parties that register a famous brand name or trademark as their domain name

• Statutes– Lanham Act-Trademark

• Requires that there be a likelihood of confusion of consumer as to whom is the true owner.

TRADEMARK INFRINGEMENT AND CYBERSQUATTING

• Statutes-continued– Federal Trademark Dilution Act of 1995

• Elements of Statute» Mark Must be Famous» Defendant Must Make Commercial Use of Mark» Defendant Use Began After Mark Famous» Likelihood of Dilution of Distinctive Mark

• Terms» Blurring-trademark dilution where it islikely that

consumers will mistake the two companies. Dissimilar.

TRADEMARK INFRINGMENT AND CYBERSQUATTING

• Statutes– Terms

• Diminishment-Web Search Browsers Will Not Continue Search After Locating Infringer’s Name and Causes Loss of Profits.

• Tarnishment-Consumers will have unfavorable association with diluting mark. (Barbie Case).

PRIVACY AND DATABASE PROTECTION

• United States-no comprehensive legislation covering privacy and database protection– Piecemeal Statutes

• Fair Debt Reporting Act• Privacy Act of 1994-government agency cannot

release personal information• Telephone Consumer Protection Act-telemarketing• Electronic Communication Act of 1996• Telecommunication Act of 1996-subscriber privacy

PRIVACY AND DATABASE PROTECTION

• European Union-comprehensive legislation– Summary of Legislation

• Personal Data Processed Fairly and Lawfully

• Personal Data Collected for Specific Purposes

• Personal Data Must be Kept Accurate

• Person’s Protected can Terminate Relationship With Provider and Keep Personal Data Confidential

• See Capsule 15 in Chapter

E-COMMERCE AND CONTRACTING

• Concerns in E-Contracting and E-Commerce– Authenticity-verification of contracting parties

and contract information– Enforceability-legal scope of licenses and

warranties– Confidentiality-payment information and trade

secrets

E-COMMERCE AND E CONTRACTING

• E-CONTRACTING LAW ISSUES– Electronic Date Interchange-computer to

computer transaction that are intended to be long term

• Parties should enter into “Trading Partner Agreements”

• Model Form Prepared by American Bar Association

• Limited Applicability

E-COMMERCE AND E-CONTRACTING

• Statute– Uniform Computer Information Transaction Act-statute

addresses transactions involving sales of computer software and licensing information.

• Offer and Acceptance (formation of Contract)» Receipt of acceptance occurs when information received in

processing system

» Additional terms found in shrink wrap license-(license in package of software incorporated into sales agreement

» Contracts can be formed by electronic agents

E-COMMERCE AND E-CONTRACTING

• Statute-Uniform Computer Information Transaction Act– Statutory warranty laws apply to internet

transactions (Magnuson Moss Warranty Act)– Clink Wrap-information added by seller of

software which appears when buyer downloads incorporated into sales contract

E-COMMERCE AND E-CONTRACTING

• Statutes-continued– Authentication and Statute of Frauds

• Signature Key Certificates Must Include the Following

– Name of Owner

– Public Key Signature

– Assigned Name

– Name of Algorithms

– Serial Number

– Duration and Any Restrictions

INTERNET SECURITIES TRANSACTION

• DIRECT PUBLIC OFFERINGS– SECURITIES EXCHANGE COMMISSION

• OFFICE OF INTERNET ENFORCEMENT

GLOBAL COOPERATION

• Statutes Both US and Global– Framework for Global Electronic Commerce-

emphasis on non-regulatory approach to global e-commerce

– General Usage for International Digitally E-Issues Commerce-authentication proposed by International Chamber of Commerce

GLOBAL COOPERATION

• Statutes continued– Internet Multimedia Law-Internet Service

Providers– US Communication Decency Act– Digital Millenium Copyright Act of 1998– United Nation Commission on International

Trade Law-provides for Arbitration– Brussels Convention-jurisdiction over ISP’s

ETHICS

• ETHICAL ISSUES– MARKETING AND ADVERTISING-

TRUTHFUL INFORMATION ON THE INTERNET

– RESPECT THE CONFIDENTIALITY OF SUBSCRIBERS

– E-COMMERCE SHOULD NOT BE USED AS A TOOL TO DEFRAUD THE PUBLIC