THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-1 A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil

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THETHE LEGALLEGAL ENVIRONMENTENVIRONMENT OFOF BUSINESSBUSINESS

© 2006 Prentice Hall© 2006 Prentice Hall Ch. 6-Ch. 6-11

A Critical Thinking ApproachA Critical Thinking ApproachFourth Edition

Nancy K. KubasekNancy K. KubasekBartley A. BrennanBartley A. BrennanM. Neil BrowneM. Neil Browne

http://vig.prenhall.com/catalog/academic/product/0,1144,0131498568,00.html

©2006 Prentice Hall©2006 Prentice HallCh. 6-Ch. 6-22

CHAPTER 6CHAPTER 6

Cyberlaw and BusinessCyberlaw and Business

THE LEGAL ENVIRONMENT OF BUSINESS

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Cyberlaw and BusinessCyberlaw and Business

How is the law changing to How is the law changing to meet the demands of new meet the demands of new business and social issues business and social issues generated by the use of generated by the use of computer technology?computer technology?

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Some Unresolved IssuesSome Unresolved Issues

Free speech vs. intellectual property rightsFree speech vs. intellectual property rights

Computer security vs. system efficiencyComputer security vs. system efficiency

Are jurisdictional boundaries obsolete?Are jurisdictional boundaries obsolete?

Will cyberspace facilitate free trade?Will cyberspace facilitate free trade?

How should the legal system respond?How should the legal system respond?

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JurisdictionJurisdictionMere presence of Web site not sufficientMere presence of Web site not sufficientThe “Sliding Scale” of The “Sliding Scale” of Zippo:Zippo:

Sales of goods take place via Web siteSales of goods take place via Web siteInformation is exchanged via Web siteInformation is exchanged via Web siteInformation is provided, passively, via Web siteInformation is provided, passively, via Web site

More InteractivityMore Interactivity jurisdiction more likelyjurisdiction more likely

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ACLU v. CDAACLU v. CDA

The Court applied the “Strict Scrutiny” standardThe Court applied the “Strict Scrutiny” standard

““Dial-a-porn” case used as precedentDial-a-porn” case used as precedent

Statute not “narrowly tailored” to accomplish Statute not “narrowly tailored” to accomplish legitimate purposeslegitimate purposes

U.S. Supreme Court finds the Communications Decency Act unconstitutional

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Playboy ChannelPlayboy ChannelThe Right to Choose UpheldThe Right to Choose Upheld

Blocking/scrambling technology requiredBlocking/scrambling technology required

Restrictive hours imposedRestrictive hours imposed

The U.S. Supreme Court finds the Telecommunications Act of 1996 overbroad

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State RegulationsState Regulations

States’ attempts to States’ attempts to regulate sales and regulate sales and practices conducted practices conducted via Internet are via Internet are increasingly increasingly challengedchallenged

Orders placed and Orders placed and shipped across state, shipped across state, even national borderseven national borders

State interest in State interest in regulation of selected regulation of selected

products (alcohol, products (alcohol, medicines) becoming medicines) becoming

irrelevant, irrelevant, impossible?impossible?

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Intellectual Property IssuesIntellectual Property Issues

PatentsPatents

Trademarks and KeywordingTrademarks and Keywording

Copyrights and Web SitesCopyrights and Web Sites

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PatentsPatents

Product, process, invention, Product, process, invention, machine, or plantmachine, or plant

20-year duration20-year duration

Protected via infringement actionsProtected via infringement actions

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TrademarksTrademarks

Usual Ruling:Usual Ruling: Courts find a way to rule in favor of Courts find a way to rule in favor of trademark holdertrademark holderBasis:Basis: there is bad faith in these cases there is bad faith in these casesNew Law:New Law: Anticybersquatting Consumer Protection Act Anticybersquatting Consumer Protection Act 19991999

Cybersquatting:Cybersquatting: The squatter registers the domain The squatter registers the domain name before the trademark owner can—then attempts name before the trademark owner can—then attempts to sell the domain name to the owner of the trademarkto sell the domain name to the owner of the trademark

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TrademarksTrademarks

Not created in bad faithNot created in bad faith

Not illegal, but future legislation expectedNot illegal, but future legislation expected

Warehousing:Warehousing: compilation of prospective compilation of prospective business domain names for salebusiness domain names for sale

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CopyrightsCopyrights

Creates rights in expression of creative Creates rights in expression of creative ideasideas

Books, music, film, plays, computer Books, music, film, plays, computer programsprograms

Copyrights and Web SitesCopyrights and Web Sites

Sharing DataSharing Data

Contributory Copyright InfringementContributory Copyright Infringement

Linking and FramingLinking and Framing

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Copyright IssuesCopyright IssuesSharing SoftwareSharing Software

The The NapsterNapster Case Case

Contributory Copyright InfringementContributory Copyright Infringement

Enterprise liabilityEnterprise liability

Intellectual Reserve v. Utah LighthouseIntellectual Reserve v. Utah Lighthouse

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Infringement ExamplesInfringement Examples

Linking and Deep LinkingLinking and Deep Linking FramingFraming Sticky Web sitesSticky Web sites

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Unfair competitionUnfair competitionFalse advertisingFalse advertisingFalse representationFalse representationFalse designation of originFalse designation of originTrademark dilution and Trademark dilution and infringement infringement

Other Causes of ActionOther Causes of Action

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E-Commerce IssuesE-Commerce Issues

PrivacyPrivacy

MarketingMarketing

CybersignaturesCybersignatures

HarassmentHarassment

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PrivacyPrivacy

Fear of misuse of personal information Fear of misuse of personal information

Fear of surveillanceFear of surveillance

Responses:Responses:

Public SectorPublic Sector

Private SectorPrivate Sector

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Federal StatutesFederal Statutes

Privacy Act of 1974Privacy Act of 1974 Electronic Communications Privacy Act of Electronic Communications Privacy Act of

19861986 Children’s Online Privacy Protection Act of Children’s Online Privacy Protection Act of

19881988 Financial Services Modernization Act of Financial Services Modernization Act of

19991999

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State LawState LawCommon law rights to privacyCommon law rights to privacy

Tort LawTort Law

Contract LawContract Law

Unfair trade practices and fraud theoriesUnfair trade practices and fraud theories

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Online Marketing IssuesOnline Marketing Issues

Concerns:Concerns:

Deception and fraudDeception and fraud

Criminal activityCriminal activity

Direct-to-consumer sales—bypassing Direct-to-consumer sales—bypassing regulations intended to protect consumersregulations intended to protect consumers

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CybersignaturesCybersignatures

Electronic Signatures in Global and Electronic Signatures in Global and National Commerce Act 2000 (E-SIGN)National Commerce Act 2000 (E-SIGN)

Allows creation of valid and Allows creation of valid and enforceable contracts onlineenforceable contracts online

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Employment Law IssuesEmployment Law Issues

Privacy rights of employeesPrivacy rights of employeesOnline harassmentOnline harassmentVicarious liability of employer for defamationVicarious liability of employer for defamationDefinition of “workplace”Definition of “workplace”ISP liability for content of messagesISP liability for content of messages

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The War Against CybercrimeThe War Against CybercrimeHacking: Denial Hacking: Denial

of Service of Service AttacksAttacks

Insider Insider TradingTrading

Internet Internet GamblingGambling

SpamSpam Identity Identity TheftTheft

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SummarySummary

Technology is leading the law to new areasTechnology is leading the law to new areasIntellectual property law is evolvingIntellectual property law is evolvingE-commerce issues are emergingE-commerce issues are emergingGovernment is combating cybercrimeGovernment is combating cybercrime

Documents

THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-1 A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil