This document discusses cyberlaw and its implications for e-commerce. It notes that cyberlaw encompasses many areas of law, including intellectual property, internet regulations, and contract law. While there is no single "cyberlaw," various jurisdictions apply different and sometimes conflicting laws to activities in cyberspace. This can create challenges for global e-commerce firms that must navigate these legal complexities. The document also examines how contract law, intellectual property law, and jurisdiction issues apply uniquely to online commerce.

1. Global Cyber-Laws
and E-Commerce &
Strategic Implication for E-Commerce

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Law, Regulation, and Policy
 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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What is CyberLaw?
 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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Much of “Cyberlaw” is US Based
 Domain names under US laws jurisdiction
 Many websites for ecommerce hosted in US
 Even for businesses not owned by US companies
 Most of litigation in cyberspace over
intellectual property rights has taken place
within the USA over the past 20 years
 Easier defenses for firms infringing others rights
 Less formal government controls on internet under
US law than under laws of many other countries

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CyberLaw is a MYTH!
 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
 Internet Law and Telecom Law
 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
 Why do we need an Internet law at all?
 Network Solutions, Inc. as Cyberspace Landlord

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Copyright, Software, and the
Applications to the Internet
 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
 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
 Fair use doctrine not adequate defense for Internet
 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
 Be careful about copying others’ website code!

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Jurisdiction and Choice of Law
 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!
 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
 No automatic membership, check address, age, etc.
 Alternatively, be small and hard to sue! (e.g., porn sites)

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Contract Laws Differ by Country
 When is an offer not an offer?
 Requirements for offer differ by country
 When is there acceptance?
 Strict requirement for complete acceptance (UK
and common law) versus judge created contracts
 Battle of the Forms – different outcomes possible
in different legal jurisdictions!
 What constitutes breach of contract?
 What damages may be applied or allowed?

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E-Commerce and Jurisdiction
 Where is the contract enforceable?
 Contract is only a right to sue for legal
enforcement in civil action

Police will not make sure the contract is honored

Threat of legal action encourages compliance
 Contract also is a way to clarify agreement

Honor and relationship may be all that is needed

EDI and contracts – no cases ever get to court. Why?

Relationship and the basis for long-term contracts
 Dispute resolution outside court under contracts

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Contract Law and the Internet
 Terms of use important for eCommerce
 Make choice of law and venue clear in contract
 Require action to affirm customer has read terms
 Inconsistent or unclear terms favor customers
 Warrantees trump disclaimers
 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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E-commerce and Contract Law
 Offer, acceptance, and consideration
 Does website make an offer, or invitation for offers?
 Advertisement, or commitment?
 When we have a contract?
 Is electronic acceptance valid? (It depends …)
 Meeting of minds requirement of acceptance?
 Confirmation of receipt of order not acceptance
 Void and voidable contracts – big difference
 You could be locked in but partner not!
 Look to contract terms and details

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Contract created by Offer,
Acceptance, and Consideration?
 Offer – when is an offer not legally an offer?
 Advertisements?
 Website?
 B2B E-Commerce and EDI?
 Revocation of offers?
 Unilateral offers and contracts
 Bilateral offers
 Acceptance
 What is required for acceptance?
 What if acceptance is partial?
 Can acceptance be by actions instead?
 Can acceptance be revoked?

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Battle of the Forms
 Purchase order states some terms
 E.g., warrantee for 5 years against all defects
 Confirmation of order states other terms
 E.g., sold as-is, where-is, with no warrantee
 Goods shipped by producer and accepted
 What terms are in the contract?
 Is there a contract at all? (Meeting of minds?)
 Payment made on invoice and accepted
 Invoice reiterates no warrantee condition
 Payment reiterates requirement for warrantee

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License Agreements and Related
Contract Law Rights and Issues
 Many things can be included in a license agreement,
including many restrictions
 Not the same as sale, so some fair use exceptions or FIRST
SALE DOCTRINE rights need not apply

Right to modify code is First Sale Doctrine right, so may not be
included in rights of licensee, but always available with sale
 Some terms MIGHT be excluded and the contract
“reformed” by the court as matter of public policy
 Contracts may not include terms which are illegal,
impossible, unconscionable, or against public policy
 Unless reformed, license contract sets the terms

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Global E-commerce and International
Applicability of IP Legal Protections
 Trademark usage may or may not be found
based on Internet usage when there is no
specific intention to target citizens of nation
 UK law and US law in conflict on this point
 Different judicial presumptions about intention
 State laws and even US laws also not consistent

Partially depends on product and context
 US Law strongly dominants domain name
and trademark law issues in e-Commerce

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Intellectual Property Ideals
 Why create monopolies in some products or
processes to increase profits for some firms
in society?
 Social cost of IP laws?
 Social benefits of IP laws?
 Does theory of cost and benefits match with
reality of incentives and actions?
 Music incentives and behavior?
 I-Pod benefits versus costs of copying?

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Practical Issues and Problems
 Can a firm violate IP laws and profit?
 Can a firm be harmed or forced out of
business without violating IP laws?
 Do the IP Laws today really protect
innovations and innovators?
 If not, who do they protect and why?
 What might create pressures to change?
 How are disputes between countries resolved
when they disagree on rights?

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Elephants and Mice
 Small firms and people without assets are
effectively like mice.
 You can squash and kill some of them
 However, it is hard to find and kill them all
 When some are killed, more pop up
 Large firms are like Elephants
 Easy to find, and easy to punish if cheating
 Powerful defenses against direct attacks
 Easy to constrain by simple laws

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CyberLaw: Mice and Elephants
 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 hide 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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Privatization of Information
 Information which was previously not able to
be copy protected might be able to be
protected via encryption under DMCA rights
 Provide limited access to data via screen only
 Encrypt database to prevent easy access to data
 Increase cost of replication of data which would
otherwise not be copy protected
 Underlying data not visible or displayed may
be protected via encryption using DMCA

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Restrictions on Global Commerce
 Provides protections under US law never
anticipated in original copyright or patent law
 Global businesses have offices in USA, so subject
to application of US laws for their firms actions
 Restricts competition more than copyright or
patent, and US laws being effectively exported
 Extends USA laws into other countries by
making foreign citizens subject to USA laws
while on USA soil or for subsidiary US firms