Introduction to IT and ECommerce Law and Policy
Dr. Theodore H. K. Clark
Associate Professor and Academic Director of
MSc Program in IS Management
Department of Information & Systems Management
Hong Kong University of Science & Technology
and Visiting Associate Professor of Operations & Information Management
(Information Economics and Strategy Group) 1998 - 2001
The Wharton School of the University of Pennsylvania
What is CyberLaw?
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Intellectual Property Laws
Internet Laws and Regulations
Telecommunications Laws and Regulations
Software Laws (including encryption)
Copyright Law
Patent Law
Trademark Law
International Trade Laws and Treaties
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Law, Regulation, and Policy
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What do we mean by the “rule of law”?
Who makes laws? How are they made?
What is the relationship between laws and
regulations or policy?
Which of these are most applicable to the
different areas of Cyberlaw? Why?
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CyberLaw is a MYTH!
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There is no CyberLaw.
There are many CyberLaws.
Noone can make laws in Cyberspace.
Everyone makes laws in Cyberspace.
Cyberspace is unregulated.
Cyberspace is excessively regulated by every
jurisdiction applying conflicting laws.
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Internet Governance
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Internet Law and Telecom Law
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No laws, many laws, both at once!
Evolving slowly for Telecom Law
Developing slowly for Internet Law
Role of ITU in Telecom and Internet
Role of USA in Telecom and Internet Law
Law, Regulation, and Policy
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Why do we need an Internet law at all?
Network Solutions, Inc. as Cyberspace Landlord
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CyberLaw: Mice and Elephants
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There are many laws that apply to
Cyberspace, but these laws can be difficult to
enforce against small, entrepreneurial firms.
Large firms are like elephants, they are easy
to see and find and they will crush anything
in their way, but they can’t hind for long.
Small firms, like mice, might be crushed or
killed, but 3 more will rise when one is killed;
governments can not effectively stop them.
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Intellectual Property Law
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Copyright Laws
Patent Laws
Trademark Laws
Trade Secrets Laws
Software Law as special application
Encryption different from Software Laws
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Military or Government Security Issues
Freedom of Speech Issues
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Software Law
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Protected by copyright law, not by patent
laws
Stronger that patents in some ways, but
weaker in others
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Longer protected life than patent
Immediate copyright protection upon creation
Fair use doctrine as defense
Does not protect idea, only expression
Stops exact copying, not functional duplication
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Patent Law
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Protects FUNCTION, not expression
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Lengthy application and approval process
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Amazon patented its one-click function, as
copyright would not have protected this function
Replicating code for one-click function easy to do
Significant legal costs may be required
Patents may be required in multiple jurisdictions
Patent limited to exact terms of application
Be careful to limit patent claims narrowly
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Trademark Law
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Protects brands, corporate names or slogans
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Significant source of litigation in Cyberspace
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“It’s the real thing: Coke”
Same name of firm in different states, who has
right to use the name in Cyberspace?
Domain name squaters? Legalized blackmail?
New cyberspace domains created – confusion?
Can not be generic or functional (Xerox)
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Strongest defense for fabricated names
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Trade Secret
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Information must be kept confidential
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Software can be trade secret if compiled
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Sharing with any outside party voids rights
Must inform employees information is secret
Incompatible with copyright – not published
Misappropriation illegal, replication legal
May include elements of public domain in
system, but must have unique secrets
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Software as Expression
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Justification for applying copyright to
software is that it is an expression like that of
an artist’s novel or a painting
This raises question regarding applicability of
freedom of speech for software and code
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US constitution protects freedom of speech
US government tried to stop publishing of
encryption code as security law violations
Academics claimed code was protected speech
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Copyright, Software, and the
Applications to the Internet
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Any copying in print or electronic form of any
expression without author’s consent is violation of
copyright protections, even if only for an instant
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Fair use doctrine not adequate defense for Internet
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Copyright always exists immediately upon publication
Rights can be waived, but need not be asserted to be valid
Any copying of expression is violation, unless exception
Limited to copying small percentage only for non-profit use
Internet copies the entire site many, many times
Special exceptions to copyright laws created for ISPs
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Be careful about copying others’ website code!
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Jurisdiction and Choice of Law
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Most businesses have the right to choose the laws
they will operate under and be subject to
Cyberspace firms may be held liable for violations of
laws in ANY JURSIDICTION from which citizens of
that nation can view their websites!
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France and eBay auctions for USA – strict liability.
German and Compuserve pro-Nazi sites in USA.
Italian site subject to US law in New York.
State laws in USA – community standards applied
Firms responsible for preventing local law violation
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No automatic membership, check address, age, etc.
Alternatively, be small and hard to sue! (e.g., porn sites)
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Contract Law and the Internet
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Terms of use important for eCommerce
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Warrantees trump disclaimers
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Make choice of law and venue clear in contract
Require action to affirm customer has read terms
Inconsistent or unclear terms favor customers
Be careful about express or implied warantees
Make terms clear of any intended guarantees
Make disclaimers clear and consistent everywhere
Puffing allowed, but be careful about bounds
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Computer Crimes
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Most computer crimes involve insiders
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More than 30% and possibly more than 50%
of major firms experience computer crime
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Hacking happens, but generally with inside help
Increasing computer crime and associated costs
Why are reported statistics much lower?
Computer crime analogy to sexual assault
Cost of prevention versus cost of recovery
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