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