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Chapter One


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Chapter One

  1. 1. Multimedia Victoria State Government of Victoria, Australia QuickTime™ and a BMP decompressor are needed to see this picture. Managing legal risks online: A guide for Victorian government web sites Prepared by David Watts, Virtual Insight May 2001 © 2001 State Government of Victoria © 2001 State Government of Victoria
  2. 2. Contents Chapter One Introduction Chapter Two Orientation Chapter Three The legal and regulatory landscape – intellectual property 3.1 Laws that govern the ownership of content and services – intellectual property and related rights 3.2 Copyright 3.2.1 What rights does copyright confer on a copyright owner? 3.2.2 How is copyright protection obtained? 3.2.3 How long does copyright last? 3.2.4 Infringement of copyright 3.2.5 Moral Rights 3.3 Trade Marks 3.4 Patents 3.4.1 Types of patent protection 3.4.2 Obtaining patent protection 3.5 Domain names 3.5.1 Domain name disputes Chapter Four Intellectual property ownership 4.1 Copyright ownership 4.2 Trade mark ownership 4.3 Patent ownership 4.4 Transfer and licensing Chapter Five Electronic transactions Chapter Six Laws covering the use and communication of content and services 6.1 Censorship and content regulation 6.2 Privacy 6.3 The Information Privacy Act 2000 6.4 Consumer protection responsibilities 6.5 Accessibility Chapter Seven Misleading and deceptive conduct, negligent misrepresentation, defamation and passing off 7.1 Misleading and deceptive conduct 7.2 Negligent misrepresentation 7.3 Defamation 7.4 Passing off Chapter Eight Links, metatags and frames 8.1 Links 8.2 Frames 8.3 Metatags © 2001 State Government of Victoria 2
  3. 3. Chapter Nine Liability and risk management 9.1 Managing risk 9.2 Legal tools for risk management 9.2.1 Preliminary 9.2.2 Site terms and conditions 9.2.3 Disclaimers 9.2.4 Push button contracts 9.2.5 Providing information and advice 9.3 Other matters that should be considered in site terms and conditions 9.4 Copyright notices 9.5 Trade marks 9.6 Software downloads 9.7 Links 9.8 Deep linking 9.9 Framing 9.10 Privacy Chapter Ten Useful links Attachment one – Risk management chart Attachment two – Terms and conditions Attachment three – Content Checklist Attachment four – One-way linking agreement © 2001 The Victorian Government This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to – The Executive Director Multimedia Victoria Department of State and Regional Development Government of Victoria Melbourne © 2001 State Government of Victoria
  4. 4. © 2001 State Government of Victoria 4
  5. 5. Chapter One - Introduction This manual is designed to assist those who have responsibility for designing, developing and operating Victorian government web sites to manage the relevant legal and regulatory issues. Although the manual is primarily a guide to the legal and regulatory framework, it is intended to focus on practical issues, to describe and explain the legal and regulatory terrain and to set out the techniques that should be used to address and manage mainstream online legal and regulatory issues. While the internet facilitates many communication services such as newsgroups and bulletin boards, the focus of this manual is on web-based services. The online legal and regulatory environment is evolving almost as quickly as the internet itself. The growth of the internet and the proliferation of the services that are available through it – such as ecommerce, online government, interactive relationships with content and service providers and new ways of accessing and distributing content on a global, instantaneous basis – have challenged the relevance of existing laws and have required legislators to develop new laws. Courts have been required to apply legal principles that originated before the internet developed to the new circumstances of the online environment. What this means for those who develop, maintain and work with internet services, particularly web sites and channels, is that it is important to recognise that the legal and regulatory environment within which they work is fluid, volatile and evolving. Not only are local, internet-specific laws being developed by both legislators and the courts but because of the global nature of the internet, laws in other jurisdictions can also have an impact on activities in Australia. During 2000, for example, Australia’s federal, state and territory governments introduced a number of new laws or have extensively amended existing laws to take account of the internet and internet services. These include the Commonwealth Electronic Transactions Act 1999, together with counterparts that © 2001 State Government of Victoria
  6. 6. have been or are being enacted by the states and territories1. At a federal level, the Privacy (Private Sector) Amendment Bill was enacted in December 2000 and comes into effect on 21 December 2001. This legislation is designed to establish for the first time national private sector privacy laws in Australia and, although it does not directly apply to the activities of the Victorian public sector, it may cover private sector organisations with which they do business. During 2000, Victoria enacted its own public sector privacy legislation, the Information Privacy Act 2000 which comes into effect on 4 September 2001 and also introduced health-specific privacy legislation designed to cover both the private and public sectors, the Health Information Privacy Bill 2000. A number of other jurisdictions are considering enacting privacy and health information legislation. So far as intellectual property law is concerned, the Copyright Act 1968 has been extensively amended by the Copyright Amendment (Digital Agenda) Act 2000 to take account of some of the developments of the digital age. Additional amendments dealing with the moral rights of the creators of copyright material were passed in late 2000. At the same time, courts across the world have been called upon to consider a range of internet issues, most prominently copyright issues that concern the use and distribution of music and sound recordings online. In such an environment, it is impossible to give precise, authoritative answers to all of the legal and regulatory issues that apply to the online environment and this manual does not set out to do so. Instead, the approach that has been taken is to provide an overview of the legal and regulatory environment, to identify the issues that most commonly arise in developing and maintaining web sites, to provide answers to the most commonly asked questions and to provide some tools that will assist users to either solve problems as they arise or give them the resources to find the solution. 1 The Victorian legislation is the Electronic Transactions (Victoria) Act 2000. © 2001 State Government of Victoria
  7. 7. This guide is one of several publications developed by the Victorian government that apply to online issues. In particular, there are two publications that are of particular relevance to online issues that should also be taken into account in developing and managing online services. The first is the Whole of Victorian Government Website Guidelines, which have been developed by the Department of Premier and Cabinet. These guidelines cover issues such as content, site architecture, presentation, interactivity, legal issues and management and maintenance and set out a range of requirements and recommendations in respect of Victorian government websites. The second is the Victorian State Copyright Management Policy prepared by the Department of Justice, which as at May 2001, is still in draft form. This policy covers copyright matters in a greater level of detail than this guide and should be read in conjunction with it. © 2001 State Government of Victoria 7
  8. 8. Chapter Two - Orientation In broad terms, establishing and operating a web site involves assembling and making available content and services, whether the site is a complex one such as a portal or channel or whether it is a relatively simple home page-type site. Content consists of the material that is communicated and includes text, graphics, audio and film. Services are the facilities the site offers. This may cover making available material for convenient download, ecommerce facilities, and online government functionality such as the ability to make an application online or other interactive features such as online questions and answers and searches. Often, content and services appear to be (and are) coextensive offerings because the two are so closely interrelated – services that are offered almost invariably include content as an integral component. The only other material commonly made available over the internet that does not simply fit within a delineation between content and services is software. The reason for this is that software can be either content or a service depending on the context within which it is provided or used. For example, a site that offers software for download is providing both a service (the ability to download the software) and content (the software itself). The legal and regulatory framework within which content, services and software are provided can be divided into a number of areas. The first are laws that define the protection the law gives to both content and services. These primarily consist of intellectual property laws. This includes copyright, trade marks (which define who is entitled to use trade names and logos in relation to content and services), and patents (which confer rights in ideas, processes and methods). © 2001 State Government of Victoria 8
  9. 9. The second are laws that affect the use of the internet for commercial or government purposes. These consist of laws that confer validity on electronic transactions by providing that they are as valid as written or paper-based transactions provided that certain conditions are satisfied. The third are laws that affect the use and communication of content and services. The law regulates the use of content and services, irrespective of their ownership, through laws relating to censorship, such as internet content regulation or censorship laws, privacy and data protection laws. consumer protection initiatives and accessibility. The fourth are laws that regulate the claims made by or about web-based content and services. This includes laws that prohibit misleading or deceptive conduct in trade and commerce or which establish liability for the provision of negligent advice or information, defamation and passing off. The fifth are laws that apply to particular internet techniques, facilities and tools such as the use of links, frames and metatags. The sixth are laws that can be used to manage risk. Various laws can impose liability on the operators of a web site, including laws relating to negligent statements and laws that prohibit misleading and deceptive conduct. Liability can also occur where other laws referred to in this section are broken, such as liability for infringement of intellectual property laws or breaches of privacy. However, there are also techniques available that can be used to manage and minimise those risks. Each of these categories is explained in greater detail in the succeeding chapters. The final part of this manual is designed to provide some practical advice and pointers for applying, using and working with the legal concepts explained in part one. These are based around the use of checklists and practical examples of the © 2001 State Government of Victoria 9
  10. 10. legal issues that can arise on a day to day basis for those who manage and operate government web sites. © 2001 State Government of Victoria 10
  11. 11. Chapter 3 – The legal and regulatory landscape – intellectual property Victorian government web sites must ensure that they conform with the requirements of applicable intellectual property laws. In particular: • Content should not be used unless permission to use it for the purpose of inclusion on the web site has been obtained • Care should be taken to respect the rights of owners of intellectual property • Victorian government web sites should not encourage visitors, directly or indirectly, to infringe intellectual property rights • Each Victorian government web site should clearly state the terms and conditions (if any) on which visitors are permitted to copy or use content that is made available on the site 3.1 Laws that govern the ownership of content and services - intellectual property and related rights Intellectual property consists in a series of rights in intellectual creations and in certain forms of identifiers. Generally speaking, there are two main policy bases that underlie intellectual property rights. The first is the policy of encouraging new intellectual creations. This is the main policy basis of patents, industrial designs, and copyright. A patent, an industrial design or a copyright confers an exclusive right on the owner, for a finite period, to prevent others from exploiting its subject matter – an invention, a design or a literary or artistic work. The exclusive right enables the owner to recover a reward for originality and investment in the creation of originality, and thus serves as an incentive to further investment in the development of new intellectual creations. The second main policy basis is the orderly functioning of the market through the avoidance of confusion and deception. This is the main policy basis of trademarks, rights in geographical indications and protection against unfair competition. A trademark enables consumers to identify the source of a product; to link the product with its manufacturer in widely distributed markets. The exclusive right to the use of the mark, which may be of infinite duration, enables the owner to prevent others from misleading consumers into wrongly associating products with an enterprise from which they do not originate. WIPO, The Management of Internet Names and Addresses: Intellectual Property Issues, Final Report of the WIPO Internet Domain Name Process, April 1999, Intellectual property consists of a number of categories of rights. These are: • Copyright • Trade marks © 2001 State Government of Victoria 11
  12. 12. • Patents • Confidential information • Registered Designs • Plant Breeder’s Rights • Circuit Layouts Each of these categories of rights is almost entirely governed by statute law, the one exception being confidential information. As this manual focuses on the online legal and regulatory environment, the main emphasis of this section is on copyright, trademarks and patents. Copyright, in particular, is the most common intellectual property owned and used by government agencies and is the material that makes up the content used in and communicated over the internet. This section also briefly covers domain names and domain name dispute resolution. Although domain names do not fall within normal definitions of intellectual property, they have an equivalent value and, like a trade mark, are distinctive of the organisations to which they are assigned. Australia’s intellectual property laws are complex. The overview presented in this and the next chapter is intended to provide a general background and guide to the main areas of intellectual property that apply to online activities and to give an overview of the intellectual property framework. However, where any doubts exist about an intellectual property issue, seek specialised advice. 3.2 Copyright In Australia, the Copyright Act 1968 governs copyright. Copyright is a bundle of rights, the most commonly known of which is the right to prevent the copying of works and other subject matter such as films, drawings, etc. It is “the exclusive right to produce the tangible form in which ideas, information and other data is expressed”.2 Apart from the reproduction right, copyright owners are entitled to exercise a number of other exclusive rights. The 2 Rickettson, The Law of Intellectual Property, Copyright, Designs and Confidential Information 1999 [3.0]). © 2001 State Government of Victoria 12
  13. 13. nature of these rights is discussed in greater detail in paragraph 3.1.1. Copyright should be distinguished from owning an object that embodies copyright material. For example, when a sound recording is purchased, the purchaser acquires ownership of the physical disc but does not acquire ownership of any of the copyright comprised in it. Usually, the purchaser of a computer program acquires ownership of the disc on which the program is embodied together with a limited, non-transferable right to use the program and a right to make a back-up copy. Copyright protection applies to works and subject matter other than works. Copyright works consist of: • literary works - written material including computer programs, some databases and tables; • musical works – this category applies to the musical composition itself, not a recording of it; • artistic works – this includes paintings, drawings, maps, plans, photographs, sculptures and will usually apply to any graphical image used on the web; and • dramatic works, such as plays. Subject matter other than works to which copyright applies are: • cinematograph films (including videos, animations in the form of moving images and the moving images generated by some computer programs); • sound recordings – a sound recording is the recorded performance of a musical work; • broadcasts, such as radio and television broadcasts; and • published editions – i.e., the typographic layout of a publication. The labels applied to categories of content in the online environment are not the same as those used in the Copyright Act. “Text” can usually be equated with a literary work. An “image” or a “graphic” is usually an artistic work. “Audio” is usually a sound recording that embodies an underlying musical work. © 2001 State Government of Victoria 13
  14. 14. Copyright protects the expression or form of an idea. It does not protect the idea itself. Therefore it would not be a breach of copyright to stage a play or develop a television series about a police station in the country (the idea behind Blue Heelers) but it would be breach of copyright if a substantial part of the expression of the Blue Heelers’ idea were taken, for example, scenes from the series. What is “substantial” depends on the facts of the case but the test is a qualitative not a quantitative one. Copyright subsists in original works and other subject matter. The concept of originality in copyright law does not connote novelty or uniqueness – the originality test is satisfied where the material in question is not copied. 3.2.1 What rights does copyright confer on the copyright owner? The rights granted to a copyright owner vary depending on the nature of the copyright work or other subject matter. For literary, musical and dramatic works, copyright is the exclusive right to • reproduce the work in a material form; • publish the work; • perform the work in public; • communicate the work to the public; and • adapt the work. In addition, the owner of copyright in a computer program (which is classified as a literary work in the Copyright Act) is granted a right to control or prohibit commercial rental arrangements of the program. The rights conferred on artistic works are not as extensive – only reproduction, publication and communication to the public are covered. For other copyright subject matter, the rights conferred by copyright are set out below. © 2001 State Government of Victoria 14
  15. 15. For sound recordings, copyright is the right to – • make a copy of the sound recording; • cause the sound recording to be heard in public; • communicate the sound recording to the public; and • enter into a commercial rental arrangement in respect of the sound recording. For cinematograph films, copyright is the right to – • make a copy of the film; • cause the film to be seen or heard in public; and • communicate the film to the public. For television and sound broadcasts, copyright is the right to – • make a film of the television broadcast; • to make a sound recording of the broadcast; and • to re-broadcast or communicate the television or sound broadcast to the public otherwise than by broadcasting it. 3.2.2 How is copyright protection obtained? In Australia, copyright protection arises automatically on the creation of a copyright work or other subject matter. There is no system of registration and no fees need to be paid. Although it is common to see the © symbol together with a nominated year and the name of the claimed copyright owner appearing on books, software, CD’s and other copyright items, it is not necessary to attach this notation to copyright material in order to claim or receive copyright protection. However, this is the convention for notifying the existence of copyright and the identity of the copyright owner to the public and it is good practice to include such a notation on a copyright work, including the home page of a web site. It is also good practice to make a note or to keep some record or evidence of when copyright material is created, particularly if the copyright material is to be submitted to a third party for assessment or as part of an application. Many copyright disputes occur where copyright material is submitted on an unsolicited © 2001 State Government of Victoria 15
  16. 16. basis to a book or music publisher and rejected but some time later it is alleged that the unsolicited material has been copied into another person’s work. For government agencies, the best way to deal with this issue is to ensure that the permission of the copyright owner is obtained before any material is used in a web site. 3.2.3 How long does copyright last? The duration of copyright protection depends on the nature of the work and whether or not it has been published. Generally, copyright in a published literary, artistic, musical or dramatic work last for the life of the author plus 50 years. Where the work was not published before the author’s death, copyright lasts for 50 years from the date of first publication. Copyright in films, sound recordings and broadcasts lasts for 50 years from the time they are made but, in the case of a published edition, copyright lasts for 25 years from the date of first publication. 3.2.4 Infringement of copyright A primary infringement of copyright occurs if a substantial reproduction of copyright material is made without the permission of the copyright owner or by exercising any of the rights of the copyright owner in respect of a substantial part of copyright material. Infringement also occurs where an infringing copy is imported, sold, leased, exhibited or distributed. The test that is used to determine substantiality is a qualitative not a quantitative one. This means that there is no fixed amount of a copyright work that can be copied without an infringement occurring. There is no “ten percent” rule. As a general guide only, if the original work could be identified from the copy, an infringement has taken place. Another rule of thumb used to assess infringement is sometimes expressed as “if it’s worth copying, it’s an infringement.” © 2001 State Government of Victoria 16
  17. 17. Copyright can also be infringed where a person authorises another to exercise the copyright owners exclusive rights. Authorisation or secondary infringements of copyright have occurred where a university provided to students a photocopier knowing that it was likely to be used for copyright infringement. In determining whether an authorisation infringement has occurred, the matters that should be considered include the extent of the person’s power to prevent the infringing act, the nature of the relationship between the person alleged to have authorised the infringement and the infringer and whether reasonable steps were taken to prevent or avoid the infringement. The Copyright Act provides a number of defences to infringement claims and also confers certain statutory licences under which the permission of the copyright owner to use a work or other copyright subject matter is dispensed with in certain circumstances provided the person who uses the copyright owner’s work pays an equitable royalty. The Copyright Act also permits, through what are known as the fair dealing provisions of the Act, copyright material to be reproduced for the purposes of research or study and for news reporting. 3.2.5 Moral Rights As from 21 December 2000, the Copyright Act was amended to include a new category of rights - “moral rights.” A moral right differs from copyright in that copyright is a property right whereas a moral right is a personal right vested in the author or creator of copyright material. The Copyright Act confers three categories of moral rights: • An attribution right, being the right of an author to be clearly and prominently identified as the author of a work; • A right to prevent false attribution of authorship, being a right to prevent another person from falsely claiming authorship of copyright material; and © 2001 State Government of Victoria 17
  18. 18. • An integrity right, being the right of an author to object to the derogatory treatment of his or her work if it would prejudice his or her honour or reputation. Moral rights apply to literary, dramatic, musical and artistic works and to films but not to sound recordings, broadcasts or published editions of works. The duration of each of the three moral rights in relation to copyright works is coextensive with the term of copyright – the life of the author plus 50 years. For films, the attribution right and the right not to be falsely attributed is 50 years from the film’s publication. The integrity right lasts only until the death of the author. Moral rights are conferred on individuals only. Thus a composer, author, playwright or the director of a film are granted moral rights. For films, moral rights are given to the ‘authors’ of the film – the principal producer, director and screenwriter but only if they are individuals. For example, if a corporate entity is the principal producer, it receives no moral rights but the film’s principal director and screenwriter do receive moral rights. A moral right cannot be assigned. However, the owner of a moral right is permitted to consent to breaches of his or her moral rights. The way in which the consent provisions operate depends on whether the copyright material to which the moral right attaches was created in the course of employment, whether it is a film or whether it is a copyright work: • For works created in an employment relationship, the author may give consent to the employer covering all acts or omissions for all works made or to be made in the course of the employment relationship. The consent can cover acts or omissions before or after the consent is given. • For all copyright works other than films:  The consent must be written; © 2001 State Government of Victoria 18
  19. 19.  It must be genuinely given by the author or his or her representative; and  The consent must cover the specific acts or omissions or classes of acts or omissions to which it applies and the specific works to which it applies • For films and all other works embodied in films, where the author has not made the film under an employment relationship:  The consent must be written; and  The consent can apply to specific conduct or conduct across the board, retrospectively or prospectively or both and to material not yet commenced, in progress or in existence 3.2 Trademarks Trademarks are devices, brands, headings, labels, tickets, names, signatories, words, letters, numerals or any combination of these which are used or proposed to be used to distinguish the goods and services of one trader from those of another. Trademarks may be registered or unregistered but registration does provide additional protection. Where a registered trademark is sought or obtained, the trademark owners’ rights are governed by the Trade Marks Act 1995. The owner of a registered trademark has the exclusive right to use the trademark in relation to the specific goods or services in respect of which it is registered. There are 42 different categories of goods or services in respect of which a trade mark may be registered and registration is only granted in respect of the categories for which the trade mark is, or is intended to be, used. Therefore, it is possible that two independent businesses could, in good faith, develop goodwill, in the same mark. For example, a bakery could use the word “Penny’s” on the © 2001 State Government of Victoria 19
  20. 20. one hand and by a line of children’s soft toys on the other. If both businesses were successful sooner or later they may wish to build a web site, and it is to be expected that both would probably wish to use the word “Pennys”, as a domain name. Such disputes can be difficult to be resolve and some commentators have suggested developing shared gateways, which could send users off in either or possibly both directions. However, trademark proprietors themselves have not been enthusiastic about this approach and there may be difficulties in avoiding other types of legal liability such as passing off.3 The Trade Marks Act also permits the registration of Certification marks. A certification mark is used when the trade mark owner wishes to permit others to use the certification mark to signify that their goods or services comply with certain standards signified by the certification mark. For example, “Trust-e” is a certification mark that appears on a number of web sites, in particular US sites. The Trust-e mark is licensed for use by sites that subscribe to and comply with certain privacy safeguards and standards as determined by the owner of the Trust-e mark. The trade mark owner is entitled to assign or licence In addition, trademarks may be registered in other jurisdictions. The Australian trademarks legislation provides for registration of marks within specific categories. 3.3 Patents In Australia, patents are governed by the Patents Act 1992. A patent can be granted for inventions that are useful and novel and which are not obvious to skilled people in the relevant area. A patentable invention can be an improvement to an existing product or service or can be a totally new product or service. A patententable invention must be a ‘method of manufacture.’ 3 Passing off is discussed later in this manual in chapter 7 © 2001 State Government of Victoria 20
  21. 21. Thus, business systems and computer software can be patentable but purely mental processes, such as artistic creations or mathematical methods, plans or schemes do not qualify. 3.3.1 Types of patent protection The Australian patent system includes 2 types of patent – standard patents and petty patents. Petty patents are designed to be easier to apply for and obtain, have a shorter duration of protection and confer a more limited suite of rights. As from May 2001, a new form of protection, the innovation patent, is replacing the petty patent system. Innovation patents are designed to protect inventions that are not sufficiently inventive to qualify as a standard patent. They are also designed to be quick, simple and inexpensive to obtain. More information about innovation patents can be found on the IP Australia website.4 3.3.2`Obtaining patent protection To obtain an Australian patent, a patent application is lodged with IP Australia. A provisional patent specification that summarises the invention and the invent step that is claimed must accompany the application. The date of filing of the provisional patent specification is known as the priority date. In order to obtain a patent, the claimed invention must pass a difficult 2-part test. The first is that the invention must contain an inventive step. This means that the inventive step would not be obvious to a person skilled in the relevant field and that it is more than a logical improvement over the status quo in the relevant field. The second is that the invention must be new or novel which means that nobody has done it before. If, for example, an invention has been published in a document or has been disclosed verbally to someone who is not bound by confidentiality obligations, the critical quality of novelty can be lost. It is not uncommon for an inventor to inadvertently lose his or her ability to claim that an invention is novel. Novelty is lost where there is secret use of the invention 4 © 2001 State Government of Victoria 21
  22. 22. (except for the purposes of very limited testing) or if any disclosure of it is made unless the person to whom the disclosure is made is bound by confidentiality obligations. A fatal disclosure can occur when the invention is demonstrated, discussed or is offered for sale or licence before a patent application is made. 3.4 Domain names The Internet Corporation for Assigned Names and Numbers (ICANN)5, a non- profit company based in the USA has responsibility for the assignment and administration of domain names worldwide. Responsibility for assigning second level domains within the .au domain has been delegated to a number of organisations in Australia, depending on the second level domain. Internet Names WorldWide has responsibility for administering the second level domain6. The registrar for the second level domain is the National Office for the Information Economy.7 The practices of domain name registries across jurisdictions have not been uniform. For example, in the USA, .com domains have been assigned on a first come first served basis, whether or not the applicant has any intellectual property or other right to the domain name they have registered. This has led to many disputes as domain name speculators have registered the names of well-known corporations, products and services as well as the names of well-known individuals. In Australia, these problems have not been as extreme as there has been a requirement that the applicant for a domain must produce a certificate of incorporation or business name registration in order to obtain a corresponding domain registration. Nevertheless, disputes have arisen, particularly where companies having similar names seek to register the same name as a domain. 5 For more information, see 6 See for additional information about the delegation of responsibility for other Australian second level domains. 7 © 2001 State Government of Victoria 22
  23. 23. On 15 May 2001, ICANN announced the introduction of a number of new top level domains. This initiative may assist in minimising the pressure for registration on the existing top level domains and provide new, more appropriate domain registrations for internet users. The new domains are: • .biz – this is intended for use by commercial organizations or for commercial purposes; • .info – this category was designed for use for the provision of information about products or services but the domain is an unrestricted one where registration can be obtained for any purpose; • .name – this category is for personal use by individuals only; • pro – this category is intended for use by certified professionals such as accountants, lawyers etc; • coop – this category is intended for use by bona fide cooperatives; • museum – this category is intended for use by verified museums; and • aero – this category is intended for use by organisations in the air transport industry. At the time of writing, Australian accreditation has only be obtained in respect of the .biz and .info second level domains. 3.4.1 Domain Name Disputes As a result of perceived threats to the international intellectual property system, the World Intellectual Property Organisation (WIPO) formulated recommendations in 1999 designed to resolve domain name intellectual property disputes.8 These recommendations were largely implemented by ICANN and, in essence, permit the owner of a trade mark to lodge an objection if the trade mark is being used as a domain name. The domain name user must show that it also has a trade mark registration (in any country) for the disputed domain name and must post a bond. If this is not done, the domain name is suspended. The 8 WIPO, "The Management of Internet Names and Addresses: Intellectual Property Issues", © 2001 State Government of Victoria 23
  24. 24. ICANN dispute resolution policies can be located at: In Australia, Internet Names WorldWide has detailed dispute resolution rules for domain names. These can be found at: © 2001 State Government of Victoria 24
  25. 25. Chapter 4 – Intellectual Property Ownership 4.1 Copyright Ownership In general, the author of a work owns the copyright in it unless the author makes the work in an employment relationship, in which case the employer owns the copyright. The basic rule is that the author of a copyright work is the owner of the copyright in it. However, where the author creates a work under an employment agreement, the employer is the owner of copyright. Thus, the copyright in works originated by employees of public sector organisations as part of their employment is owned by the public sector organisation that employs them. It is important to note that consultants are not employees. Therefore, where a consultancy will involve the making of copyright works by the consultant and it is important to be able to use those works without being required to pay a further fee to obtain a copyright assignment or licence, the issue of copyright ownership must be addressed in the consultancy agreement. One exception to these general rules are commissioned photographs taken for private and domestic purposes and portraits, in which case the person who commissions the work is the copyright owner. It should be noted that if the person who commissions the photograph or portrait makes known to the author the purpose for which the work is required, the author has a limited right to restrict the use of the copyright work for purposes other than the disclosed purpose. The second exception is journalists’ copyright. A journalist, despite having created a work under an employment agreement with a newspaper, controls the right to include the work in a book or in a paper version of his or her employer’s publication. It is important to note that all of these general rules and exceptions are subject to any agreement to the contrary. For subject matter other than works, copyright is owned as follows: © 2001 State Government of Victoria 25
  26. 26. Sound recordings and films– the maker of the sound recording or film owns the copyright, except where a person makes an agreement with another to make the sound recording or film, in which case the first person owns the copyright. Television and sound broadcasts – the maker of the broadcast owns the copyright Published editions of works – the publisher owns the copyright in the published edition. Under sections 176 – 178 of the Copyright Act, copyright in works and other subject matter made by or under the direction of the Crown is owned by the Crown. There is a degree of uncertainty in the precise meaning of these provisions. In particular, it is likely that where the Crown does not exercise a sufficient degree of “direction” it will not own copyright. It is therefore desirable to ensure that copyright ownership issues are dealt with explicitly in contractual documentation. 4.2 Trade mark ownership The owner of a registered trademark is the person or entity registered with IP Australia as its owner. Normally, the owner of a registered trademark is the organisation to whose products or services the trademark is related. A search of the trademark register will identify the owner of a trademark. It should be noted that where a trademark is a graphic, such as a logo, copyright is likely to subsist in it as an artistic work. 4.3 Patent ownership The general rule is that the creator of the subject matter of the patent is entitled to be registered as its owner. As is the case with copyright, if the creator of the patent subject matter did so in the course of his or her employment, the owner of the patent is the employer. These rules are subject to any contrary agreement. The owner of a patent can be ascertained by searching the register. © 2001 State Government of Victoria 26
  27. 27. 4.4 Transfer and Licensing If intellectual property owned or controlled by a third party is required for use in a Victorian government web site, it is necessary to acquire the right to do so. Intellectual property rights can be acquired by either an assignment – the transfer of outright ownership in part or all of the intellectual property – or by licence – the acquisition of a right to use part or all of the intellectual property. Transfer and licensing of intellectual property can be an extremely complex activity. If the rights obtained are insufficient for their proposed use on a web site, there is a risk of a claim for infringement and possible liability for damages. Accordingly, legal advice should be sought and obtained in relation to licensing issues. The general rule however is to ensure that the rights that are acquired cover the uses that will be required of or permitted by the web site in which they are embodied. For example, if the web site permits users to download material for private, non- commercial purposes, the web site must have permission form the copyright owner to do so. The basic rule is that for all material included on a Victorian government web site, permission of the owner of the intellectual property rights in the material must be obtained and documented. Intellectual property rights, particularly copyright, can be licensed in a vast variety of ways, including geographic (a right to exercise some or all of the copyright owners rights in a particular location), by reference to a purpose or application (the right to use material on a particular web site or for a particular purpose), by time (the permission expires at the end of a specified period of time), or by reference to particular rights (the right to communicate material to the public but not to broadcast it or reproduce it) or a combination of each of these. In negotiating a licence, care should be taken to ensure that the rights obtained cover all potential uses. © 2001 State Government of Victoria 27
  28. 28. Chapter 5 – Electronic Transactions Under the Electronic Transactions (Victoria) Act 2000, electronic transactions are as legally valid as paper-based transactions. Requirements to give a signature, to give written information, to produce a document and to retain a document can be satisfied electronically if the parties consent. With internet commerce in Australia predicted to reach $1.3 billion in 2001 from a base of $61 million in 1997, governments across Australia have been concerned to ensure that any impediments to its growth – real or perceived - are removed. One such impediment has been perceived uncertainty as to whether electronically made contracts are valid and whether other legal requirements that require written documents can be satisfied electronically. In 1998, the federal, state and territory governments agreed, through the Standing Committee of Attorneys General (SCAG) to develop model electronic transactions legislation which would consist of a model Commonwealth electronic transactions law together with complementary state and territory legislation. The reason for the need for a uniform national legislative scheme is based on the fact that federal constitutional power is limited. The federal government does not have power to legislate to cover, for example, contracts entered into within a state or territory. An Electronic Commerce Expert Group (ECEG) was established by the Commonwealth and tasked with investigating the most appropriate form for the model legislation. The ECEG recommended a law based on an international benchmark, the United Nations Committee on International Trade Law’s (UNCITRAL) model law on electronic commerce. The Commonwealth’s model law based on this recommendation, the Electronic Transactions Act 1999, was passed by federal parliament in 1999 and came into operation in March 2000. The complementary state and territory electronic transactions legislation was agreed to during 2000. The legislation is based on © 2001 State Government of Victoria 28
  29. 29. two key principles. The first is known as functional equivalence, which means that paper-based and electronic transactions should be treated equally under the law. The second is technology neutrality, which means that the law should not discriminate between different forms of technology. The legislation is also consent-based. It does not compel persons to undertake transactions electronically. Thus, the parties to a transaction must consent to it be undertaken electronically. During 2000 a number of states, including Victoria, introduced electronic transactions legislation based on the uniform national model. The Electronic Transactions (Victoria) Act 2000 came into operation in September 2000. The Electronic Transactions (Victoria) Act 2000 The key provision of the legislation is s 7, which provides that a transaction is not invalid only because it took place by means of one or more electronic communications. This provision is designed to ensure that all of the existing laws relating to the formation and operation of contracts remain in place but where there is a requirement for writing, this can be satisfied by an electronic communication. The other provisions of the legislation deal with specific, fundamental aspects of electronic transactions. Section 8 deals with laws that require a person to give information in writing and permits that requirement to be met electronically if, at the time the information was given, it was reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference and the person to whom the information is given consents to the information being given electronically. Giving information in writing covers a range of activities, including making an application, lodging a claim, making a request, making a declaration and a number of other activities. © 2001 State Government of Victoria 29
  30. 30. Section 9 gives legal recognition to electronic signatures. A requirement for the giving of a signature can be met with an electronic signature if: • a method is used to identify the person and to indicate the person’s approval of the information communicated; • the method was as reliable as was appropriate for the purposes of the information communicated; and • The person to whom the information is given consents to the requirement for a signature being met by use of that method. Section 10 establishes that where a law requires the production of a document, that requirement can be met electronically where: • the method of generating the electronic form of the document provided a reliable means of assuring the maintenance of the integrity of the information contained in the document; and • at the time the communication was sent, it was reasonable to expect that the information contained in the electronic form of the document would be readily accessible so as to be useable for subsequent reference; and • the person to whom the document is required to be produced consents to the production, by means of an electronic communication, of an electronic form of the document. Section 11 establishes that a requirement to retain a document can be satisfied by retaining an electronic copy where: • at the time of the recording of the information, it was reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference; and • if the regulations require that the information be recorded on a particular kind of data storage device, that requirement has been met. Section 13 establishes rules to determine the time and place of dispatch and receipt of electronic communications. In essence, where an electronic communication enters an information system outside the control of the originator © 2001 State Government of Victoria 30
  31. 31. of the communication then the communication is sent when it enters that information system unless the parties agree otherwise. In general, an electronic communication is received when it comes to the attention of the addressee (this does not mean that in the case of an email for example, the email must be opened. The email has come to the attention of the addressee before it is opened). Section 14 deal with the attribution of electronic communications and establishes the general rule that, unless otherwise agreed, “the purported originator of the electronic communication is bound by that communication only if the communication was sent by the purported originator or with the authority of the purported originator.” There is an important difference between the state and territory electronic transactions legislation and the Commonwealth Electronic Transactions Act. Under the Commonwealth Act there are a variety of provisions that compel Commonwealth agencies to conform to the objectives of the Commonwealth’s online government strategy. Thus the ability of Commonwealth agencies to refuse to consent to accepting electronic communications is restricted after June 2001 unless the agency is exempted through regulations. There are a number of issues that affect the use of electronic communications that are not precisely defined in the Victorian legislation. For example, the method to be used to identify a person and to indicate that person’s approval of the information to which his or her electronic signature is attached is not defined by the legislation. Thus, in practical terms, steps will need to be undertaken by Victorian government agencies to establish standards and benchmarks that define appropriate methods in differing circumstances. For example, the use of public key cryptography may be an appropriate method in circumstances requiring a high degree of security but such a method may not be appropriate in other circumstances. © 2001 State Government of Victoria 31
  32. 32. Chapter 6 – Laws covering use and communication of content and services Web content is regulated by the Commonwealth Online Services Act which establishes a regime under which content is classified using the same classifications used for books and films. Where a complaint is made about web content, the material is classified and a ‘take down’ notice can be issued that compels the internet content host to block the content within 24 hours. 6.1 Censorship and content regulation In Australia, internet content is regulated under the Broadcasting Services Act 1992, specifically, through the Broadcasting Services Amendment (Online Services) Act 1999 (the Online Services Act). The relevant regulatory authority is the Australian Broadcasting Authority. The Online Services Act is designed to achieve three objectives, these being to: • restrict access to certain internet content that is likely to cause offence to a reasonable adult; • provide a means for dealing with complaints about certain internet content; and • protect children from being exposed to internet content that is unsuitable for them. The regulatory scheme imposes obligations on internet service providers and internet content hosts but does not impose any obligations on producers of content or people who upload or access content. It has been left to State and Territory laws to impose obligations on them at the local level, although options for a consistent and complementary state/territory approach to content regulation are currently being canvassed. The Online Services Act also introduces certain non-legislative initiatives directed at monitoring internet content and educating the public about internet content. © 2001 State Government of Victoria 32
  33. 33. The Online Services Act is a fairly complex piece of legislative drafting that imports many terms and technical concepts from a range of legislation, including the Telecommunications Act. • A person can complain to the Australian Broadcasting Authority (ABA) about content and the ABA must investigate the complaint • The ABA must decide whether the content is “prohibited content” (already classified X or RC (Refused Classification)) or potential prohibited content (likely to be so classified). Content is also prohibited if it is classified R and not subject to a restricted access system. A restricted access system is a specified access control system for internet content declared as such by the ABA. Classification is by the Office of Film and Literature Classification (OFLC) which currently administers Australia’s film and book classification system. Content classification is based on the regime that applies to films. • Where the content is prohibited and is hosted in Australia, the ABA must issue a “final takedown notice” which will require the ISP or internet content host to block access to the content within 24 hours. • Where the content is potential prohibited content hosted in Australia, the ABA must issue an “interim takedown notice” which will require the ISP or content host to block access to the content within 24 hours pending review by the OFLC. • For content hosted outside Australia, the ABA is to notify police and local service providers so that they can deal with it in conformity with an industry code. If there is no industry code, the ABA must notify every ISP about the content and direct them to take “all reasonable steps” to prevent end users from accessing the content. “Reasonable steps” is to be specified in industry codes and is to be guided by these factors: - The balance between public interest concerns and financial and administrative burdens; - Any likely fetter on technological development and/or change • Failure to comply with an ABA takedown notice can expose an ISP or content host to penalties of up to $27,500.00 per day. © 2001 State Government of Victoria 33
  34. 34. • Where material is substantially similar to other classified material, it will take the same classification. This provision is designed to prevent minor modifications to web pages being used to get around classifications and takedown notices. • If there is no industry code or if a code is deficient, the ABA has a reserve power to make an industry standard • The ABA is given power to make online provider determinations regulating ISPs and internet content hosts. The regulatory scheme has been the subject of substantial criticism, particularly as it is argued that the scheme is futile and can never achieve its objectives. In addition, it imposes substantial obligations on ISPs and internet content hosts. It places them in a position where they may be required to make subjective decisions about internet content and to determine what reasonable steps are sufficient to comply with ABA requirements. It is also important to note that this legislation is designed to operate in conjunction with meshing state and territory legislation that covers people who originate and download internet content. The shape of that legislation is not yet known. Some states, Victoria and Western Australia, and the Northern Territory have already enacted legislation aimed at content providers. It is proposed that a uniform national scheme be developed through the Standing Committee of Attorneys-General. 6.2 Privacy All Victorian government web sites must comply with the privacy requirements set out in the Information Privacy Act 2000 in so far as the site collects and handles personal information. In particular, each site should have a clear privacy policy that can be accessed from the site’s home page. Personal information should be dealt with in accordance with the ten Information Privacy Principles Lack of adequate privacy protection is one of the most frequently expressed reasons why individuals choose not to use online services. Only 6% of Australia's 200 most accessed web sites have an adequate privacy policy."9 9 Macklin, B, 1999, 'Australian Privacy and Security Web Site Survey', Internet Law Bulletin, Vol. 2, No. 8, October © 2001 State Government of Victoria 34
  35. 35. There is little doubt that when individuals use online services that do not give an adequate level of privacy protection, the information they provide to the service is often deliberately incorrect. Often, however, lack of proper privacy protection means that individuals will not use an online service at all. Privacy embraces a number of concepts. These include the expectation that information collected about an individual such as medical or psychiatric history, religious or political affiliations, is kept private, the expectation that a person’s communications will be private and that information a person provides to an organisation about him or herself will not be passed on to a third party. There is no general right to privacy in Australia. Up until recently, there have been no comprehensive privacy laws. There is federal privacy legislation (the Privacy Act 1988) that applies only to the federal public sector and to consumer credit reporting and certain tax details. In New South Wales, the Privacy and Personal Information Protection Act 1998 applies to the NSW public sector. In Victoria, the Information Privacy Act 2000, which will apply to the Victorian public sector, was passed by the Victorian parliament in late 2000 and will come into effect later in 2001. Other states and territories are actively considering their own privacy legislation. So far as privacy protection in the private sector is concerned, amendments to the federal Privacy Act 1988, through the Privacy (Private Sector) Amendment Act 2000, was passed by federal parliament on 21 December 2000 and is due to come into effect one year later, on 21 December 2001. This manual does not cover the federal private sector privacy amendments at this stage but it is worthwhile noting that the legislation is designed to be “light touch” and includes scope for the development of industry-specific self regulatory codes. The legislation has been criticised for containing too many exemptions. For example, it will not generally apply to personal information held by small business, nor will it apply to employee records. © 2001 State Government of Victoria 35
  36. 36. These new privacy initiatives have largely been driven by the development of online services and they are designed to increase the level of confidence and trust in new online initiatives In Victoria, the Information Privacy Act (IPA) will govern the activities of the public sector, including online activities except where health information is involved10. Privacy legislation is unusual in that it is principle-based. In the IPA, these principles are the Information Privacy Principles. The Victorian and the federal private sector privacy principles are based on the National Principles for the Fair Handling of Personal Information (Jan 1999 revision)11. The National Privacy Principles are in turn based on internationally recognised privacy principles derived originally from the work of the OECD. There are ten IPPs in the Victorian legislation. In brief, they are: 1. Data Collection An organisation must not collect personal information unless the information is necessary for one or more of its functions or activities. 2. Use and Disclosure An organisation must not use or disclose personal information about an individual for a purpose (the secondary purpose) other than the primary purpose of collection unless special defined circumstances apply. 3. Data Quality An organisation must take reasonable steps to make sure that the personal information it collects, uses or discloses is accurate, complete and up to date. 4. Data Security An organisation must take reasonable steps to protect the personal information it holds from misuse and loss and from unauthorised access, modification or disclosure. 5. Openness An organisation must set out in a document clearly expressed policies on its management of personal information and must make the document available to anyone who asks for it. 6. Access and Correction If an organisation holds personal information about an individual, it 10 Health-specific privacy legislation, the Health Records Act 2001, was assented to on 10 April 2001. When this legislation commences it will govern the privacy of both health information in both the public and private sectors in Victoria and not the Information Privacy Act. 11 see © 2001 State Government of Victoria 36
  37. 37. must provide the individual with access to the information on request of the individual unless specific defined circumstances apply. 7. Identifiers An organisation must not assign unique identifiers to individuals unless the assignment of unique identifiers is necessary to enable the organisation to carry out any of its functions efficiently. 8. Anonymity Wherever it is lawful and practicable, individuals must have the option of not identifying themselves when entering into transactions with an organisation. 9. Transborder Data Flows An organisation may transfer personal information about an individual to someone (other than the organisation or the individual) who is outside Victoria only if the organisation reasonably believes that the recipient of the information is subject to a law or binding scheme or contract that upholds principles for the fair handling of personal information substantially similar to these IPPs or if the individual consents. 10. Sensitive Information An organisation will limit the collection of highly sensitive information about individuals. It should be noted that this is a short summary of the IPPs only. The full text is set out in Schedule 1 of the Information Privacy Act 2000. 6.3 The Information Privacy Act 2000 The Information Privacy Act (IPA) is due to come into operation from mid-2001 The IPA has three broad aims: • to balance the public interest in the free flow of information with the public interest in protecting the privacy of personal information in the public sector; • to promote awareness of responsible personal information handling practices in the public sector; • to promote the responsible and transparent handling of personal information in the public sector. In general terms, s 15 of the IPA states that after the first anniversary of the Act, “an organisation must not do an act, or engage in a practice, that © 2001 State Government of Victoria 37
  38. 38. contravenes an Information Privacy Principle in respect of personal information collected, held, managed, used, disclosed or transferred by it.” Victorian public sector organisations will, therefore, be required to comply with the requirements set out in the IPPs when dealing with personal information. If they do not do so, they may be subject to a complaint to the Privacy Commissioner and, if proved, various orders can be made to protect privacy or to remedy a breach, including the granting of compensation. The “organisations” covered by the IPA include a Minister, a public sector agency, a Council, a court or tribunal, the Victorian police force and contracted service providers who provide services under a State contract. Thus, the IPA applies broadly across the whole of the Victorian public sector and will govern the privacy practices of all Victorian government web sites. Some of the main features of the IPA are: Appointment of Privacy Commissioner: The IPA provides for the appointment of a Privacy Commissioner whose functions include – • to promote an understanding and acceptance of the IPPs and the objects of the IPPs • to recommend the approval of codes of practices and variations of codes of practices • to issue guidelines about the development of codes of practice • to examine the practice of organisations in relation to personal information and to ascertain whether those practices are in accordance with the IPPs or an applicable code • receiving complaints about the contravention of IPPs or interference with an individual’s privacy • to issue compliance notices • to conduct or commission privacy audits • to promote privacy and to undertake educational programs in that regard and a range of other matters.12 12 See IPA s 58 © 2001 State Government of Victoria 38
  39. 39. Codes of practice: The IPA permits organisations to discharge their statutory privacy obligations by complying with a code of practice that binds the organisation. Codes of Practice are designed to provide the legislation with flexibility by permitting the modification of one or more of the IPPs in relation to their application to an organisation but only where the modification is at least as stringent as the standards set out in the relevant IPP. Codes of practice are approved by the Privacy Commissioner and, when approved, govern the privacy practices and procedures of the organisation bound by the Code in place of the IPPs. The Privacy Commissioner is required to keep a register of codes of practice. Complaints: Individuals are given the right to complain to the Privacy Commissioner about acts or practices that may constitute an interference with the privacy of that individual. In dealing with complaints, the emphasis of the legislation is on conciliation before the Privacy Commissioner and conciliation agreements can be registered with the Victorian Commercial and Administrative Tribunal (VCAT) and enforced through VCAT. If conciliation before the Privacy Commissioner fails, the complaint may be referred to VCAT and heard and determined by it. VCAT has a range of powers available to it in the event that it finds, after a hearing, that a complaint or any part of it has been proved. These include the power to make orders or findings: • restraining the organisation that has breached privacy from continuing to interfere with the individual’s privacy • requiring an organisation to perform or carry out “any reasonable act or course of conduct to redress any loss or damage suffered by the complainant, including injury to the complainant’s feeling or humiliation suffered by the complainant”13 caused by the privacy breach • order the payment of compensation up to $100,000 • reimbursing an individual for reasonable expenses incurred in connection with the making of the complaint. 13 see IPA s 43(1)(a)(ii) © 2001 State Government of Victoria 39
  40. 40. The Privacy Commissioner is also able to serve a compliance notice on an organisation if the Privacy Commissioner is satisfied that the organisation has done an act or engaged in a practice in contravention of an IPP or code of practice. Outsourcing: Under s 17 of the IPA, privacy obligations extend to activities undertaken on behalf of organisations by outsourced service providers. In essence, the existence of an outsourcing arrangement does not absolve the outsourcing organisation from liability for an interference with privacy that occurs under the outsourcing arrangement by the outsourced service provider unless – • the outsourcing organisation establishes that it entered into a contract under which the service provider was to be bound by privacy obligations to the same extent and in the same way as if the outsourcing organisation had itself undertaken the outsourced obligations; and • the relevant IPP or code of practice is capable of being enforced against the contract service provider. It follows that all Victorian public sector organisations that outsource activities that involve the use of personal information will be required to include contractual provisions binding the service provider to observe the same privacy obligations as those that the outsourcing organisation must observe and that steps must be taken to ensure that such a contractual provision is enforceable. The overlap between freedom of information and privacy: There is an inevitable tension between freedom of information legislation, which is designed to ensure that information held by the public sector is made widely available and privacy which attempts to give an individual more control over his or her personal information, including, through IPP 6, stating that an individual should have access to his or her personal information. Under s 6 of the IPA, where there is a conflict between the provisions of the IPA and any other Act, such as the Freedom of Information Act 1982 (FOI © 2001 State Government of Victoria 40
  41. 41. ACT), the provisions of the other Act prevail over those of the IPA. The IPA does not confer on individuals any statutory right of access to personal information– the only statutory right of access to information held by Victorian government agencies is in the FOI Act. However, as each public sector organisation will be required to comply with the IPPs, part of that compliance will necessarily involve establishing mechanisms under which individuals can, where possible and appropriate, access their personal information outside the FOI regime. The online environment offers a number of ways of accomplishing this objective, such as through online enquiries. 6.4 Consumer Protection Responsibilities Victorian government web sites should take account of and conform with current consumer protection standards. The site terms and conditions of use should be stated clearly and be accessible from the home page. Users should be provided with information about the web site’s “owner’, including a physical address and contact phone number. If the site provides ecommerce services, the measures that are taken to provide security and prevent credit card fraud should be provided as well as details about how to make complaints and to whom, how disputes are resolved, and the site’s privacy policy. The law applicable to the activities of Victorian government web sites should be nominated in the site terms and conditions as the law of Victoria. Consumer protection issues are increasingly becoming important issues that need to be taken into account in designing and operating online services. Various national and international14 initiatives have been undertaken that are designed to develop regulatory frameworks that have the objective of ensuring that consumers receive the same protection when they do business online as when they do business face to face with a local service provider. In Australia, a number of consumer protection initiatives have been undertaken. At a federal level, the Department of Communications, Information Technology and the Arts, The National Office of the Information Economy (NOIE)15 and the federal treasury have developed consumer protection materials. The treasury consumer protection standards, Building 1414 See, for example, 15 see © 2001 State Government of Victoria 41
  42. 42. Consumer Sovereignty in E-commerce: A Best Practice Model for Business.16 are similar to and draw on the OECD guidelines. The main issues identified in the Treasury standards are: 1. Information 2. Payment 3. Redress 4. Jurisdiction 5. Privacy Information: As online relationships take place without any physical contact, it is necessary to provide explicit information that a consumer would otherwise be able to obtain through the physical sales environment or through physical proximity to the service provider. Information needs to be provided about the identity and physical location of the service provider. This should include a street address and phone numbers. It also means giving details about the terms and conditions on which the service is provided and the rules that are applicable to the use of the service. Payment: Although most online services to which this guide applies will be free services, wherever some form of ecommerce mechanism is provided (eg, bill payment), the provision of a secure payment system is essential. Online payment usually means the use of credit cards. Using credit cards over the internet involves the risk that credit card details can be intercepted en route to the service provider, the service provider improperly using credit card details or credit card details being improperly obtained from the service provider. Details of the measures that are taken to minimise these risks should be made available to clients. 16 see © 2001 State Government of Victoria 42
  43. 43. Redress and Dispute Resolution: As many online relationships cross national or international borders the normal dispute resolution mechanisms to which consumers have access are not effective. Where a dispute arises and the parties are located in Australia, existing dispute resolution mechanisms, such as Australian courts, tribunals or regulatory bodies may be effective. Where one or more parties are not located in Australia, there is no effective international online dispute resolution mechanism available. In the absence of such a mechanism, it is suggested that a dispute resolution mechanism is suggested as part of the rules that are stated for the online service, even if the mechanism is one that is located within Australia. Jurisdiction: Internet transactions that cross territorial borders give rise two main jurisdictional issues. First, what law applies to the transaction? Secondly, what is the appropriate forum for the resolution of disputes? For Victorian government web sites, the law that applies to any transaction should be stated as Victorian law in the site terms and conditions. In addition, the parties should agree (through the site terms and conditions) that the parties submit to the non-exclusive jurisdiction of the courts of Victoria for resolution of any disputes. Privacy: Privacy issues are dealt with in earlier in this section. 6.5 Accessibility Under the Disability Discrimination Act 1992, government agencies are required to ensure that online services are accessible to people with disabilities. It is Victorian government policy that web sites should be designed so as to promote equal access for people with disabilities. All Victorian government web sites must comply with the WWW Accessibility (Disability) Policy (IT&T-39). © 2001 State Government of Victoria 43
  44. 44. Chapter 7 – Misleading and deceptive conduct, negligent misrepresentation, defamation and passing off 7.1 Misleading and Deceptive Conduct Section 52 of the Trade Practices Act (Commonwealth), Section 11 of the Fair Trading Act (Victoria) and other similar state legislation prohibit corporations and, in the case of the state legislation, individuals, from engaging in conduct in trade and commerce that is misleading or deceptive or has the tendency to mislead or deceive. Conduct includes making statements. These provisions have been a fertile source of litigation for many years with claimants ranging from consumers to large businesses who believe either that they have been misled or deceived or that some other person is making misleading or deceptive statements about them. In addition, the Australia Consumers and Competition Commission (ACCC) is empowered to seek injunctions restraining misleading or deceptive conduct. Liability for misleading or deceptive conduct is strict, that is, there does not have to be any intention to mislead or deceive; it is the effect of the conduct, not the reason for it, that is reviewed by the Court. Therefore, it is not a defence to argue that one is merely a Channel and that the content was provided by another agency. Under these acts, not only can damages be awarded and publication restrained but also the offending party may be ordered to publish retractions and otherwise correct misstatements. It is not possible to contract out of liability for misleading or deceptive conduct although it may be possible to limit liability to certain specified outcomes in some circumstances. Because of this, the risk of misleading or deceptive conduct claims is better managed through warnings and recommendations that separate © 2001 State Government of Victoria 44
  45. 45. advice be sought, than disclaimers. Then it becomes a question of whether the Court should infer that the claimant did rely on the words. 7.2 Negligent Misrepresentation At this relatively early stage of the development of online services, the Australian courts have provided little guidance on how the law of negligence applies in the online environment. Consequently, the analysis that follows is primarily based on the principles courts have used when dealing with non-internet based relationships and transactions or on decisions that have been made in other jurisdictions. The tort of negligent misrepresentation is much narrower in compass than claims for damages arising out misleading or deceptive conduct. To succeed in a claim for misrepresentation, it is necessary to prove that: • the offending party owed the plaintiff a duty of care; • there has been a breach of duty of care, i.e., negligence; and • the plaintiff has suffered loss and damage that it is not too remote, arising out of that loss and damage. In the case of Websites, a plaintiff could attempt to argue that the Website operator, the author and the supplier of the impugned information owed the plaintiff a duty of care. The likelihood of success of such an argument would depend upon the facts of the case. As claims of negligent misrepresentation are generally claims for pure economic loss (i.e., no personal or property damage has occurred) the Courts have been concerned to limit the duty of care narrowly. Therefore it is necessary to prove that there is a degree of proximity between the plaintiff and the defendant. That is, they have to be in some special relationship such as solicitor/client or it must be shown that the defendant knew and permitted the plaintiff to rely upon the © 2001 State Government of Victoria 45
  46. 46. defendant’s statements. In most circumstances merely building and operating a Website would not give rise to the necessary proximity. However government Websites which purport to provide comprehensive information about regulatory matters may fall into a different category. Where the supplier of the information is a third party, additional questions will arise about proximity. Where negligent misstatement results in personal injury or property damage, the duty of care will be much more broadly defined and, indeed, the claim may be treated as a species of product liability. An example of this would be a recipe that has been posted on a Website but by reason of a mistake in ingredients or procedure described, the resulting product causes injury. It is possible to contract out of claims in negligence through disclaimers. However, because of judicial dislike of disclaimers, very little reliance should be placed on the effectiveness of disclaimers in the case of personal injury or property damage. Expanded disclaimers may be effective depending upon what they say and the nature of any defect. It is also possible that they could be claims pursuant to the product liability provisions of the Trade Practices Act. 7.3 Defamation A web site can be the vehicle through which statements can be made and published widely, particularly through facilities such as bulletin boards that are comprised in the web site. The law of defamation is concerned with providing redress to those whose reputation is damaged through the publication of defamatory material. A statement is defamatory if it has the tendency to lower a person in the estimation of a section of ordinary members of the community or bring them into ridicule or contempt. Businesses, organisations and products can also be defamed but to succeed with such claims, it is necessary that they prove actual financial loss arising out of the defamation. © 2001 State Government of Victoria 46
  47. 47. Any person who republishes the defamation, even innocently, becomes primarily liable to the plaintiff. Therefore, it is not a defence to argue that one is merely a Channel and that another agency was the content provider. It is the effect of the words that the Court looks at, not the purpose behind them although where defamatory words are used with an ulterior motive, exemplary or punitive damages (damages to punish rather than to compensate) may be awarded in addition to compensatory damages. 7.4 Passing Off To succeed in a claim of passing off, it is necessary to show that: • the plaintiff has good will or reputation in the name or get up in issue; • in using the name or get up, the defendant is misrepresenting an affiliation to, or endorsement by, the plaintiff respecting the defendant or the defendant’s goods; and • damage to the value of the plaintiff’s name and reputation by reason of the passing off. To avoid allegations of misrepresentation, many cybersquatters have posted disclaimers rebutting inferences of endorsement. However, the Courts have begun to take a wider view of passing off and even where the registered domain names were not in active use, the Court may grant an injunction on the basis that a deliberate registration of a domain name on account of its similarity to another organization was a threatened passing off. © 2001 State Government of Victoria 47
  48. 48. Chapter 8 – Links, metatags and frames 8.1 Links One of the features of the web is that it allows operators of Web sites to create "hypertext links" - so named because they are links to hypertext, usually located somewhere else on the Web, which is constructed in a computer language called hypertext markup language, or HTML. These typically appear as blue underlined text, but also in other colours and as graphics images. An author who creates a web document using HTML can create links to other web documents by inserting a code into the text or graphics. The code contains the URL of whatever document the author wishes to link to. When a user selects the text or graphics the web browser requests the document represented by the URL. There are 3 different types of links. The first, intra-page links connect different parts of the same document. The second, intra-system links, connect different documents that are located on the same computer. The third, an inter-system link, connects different documents located on different computers. This section’s focus is on inter system links. Links can be created in two basic ways. The first is an HREF link which is activated when it is selected. The second is an IMG command which automatically activates the link when a predetermined event occurs – usually the opening of a web page. It is important to understand that a link can be created without the knowledge or consent of the “owner” of the linked page. In addition, links are a one way process – following a link to a page does not mean that that page is linked back. The means by which you can “go back” is one of the features of web browsers. It is unlikely that establishing a link could be said to constitute a copyright infringement. A link may be regarded as nothing more or less than a footnote © 2001 State Government of Victoria 48
  49. 49. or bibliographic reference pointing the user to related materials of interest while also transporting the user there. However, another way to look at linking is that it can be a form of free rider misappropriation of property or unfair competition by constituting a representation that the linked site is affiliated to, connected with or a sponsor of the originating site. The originating web site obtains a benefit but it may do so at the expense of the linked Web site. In order to manage the legal issues and risks associated with linking, linking agreements are a useful tool to employ. Such agreements are prudent but not always practically attainable. When used, they can be used to obtain other benefits (e.g., warranties, indemnities and other allocations of risks and responsibilities as to content). Linking agreements are often negotiated when cross links are established because both parties are similarly motivated to link to each other and, in the case of commercial linked sites, share revenue from advertising or product sales on the linked sites. Linking agreements are considerably more difficult to negotiate if there is no benefit to the linked site or if there is some possible detriment. Under these circumstances, links should be confined to minimum text only (URL or domain name) and should link through the main page or index. Deep links, i.e. links directed to a high value location deep within a site should not be used in these circumstances even if they are technically possible. 8.2 Frames Caution should be exercised before agreeing to permit Victorian government content to be framed because of the risk of creating the impression that the content was provided by others or that Victorian government approves, sponsors or endorses the framing site. It is also possible on the Internet to set up a Web site so that the viewer will click on a hyperlink and find a second Web site displayed within a "frame" which is on the first Web site. Frames can be used in such a way as to present content from one web site “as if” it is the content of another web site. It follows that framing is a relatively high risk activity because it readily gives rise to a perception of there being some sort of connection, endorsement or © 2001 State Government of Victoria 49
  50. 50. sponsorship involved in the relationship. It is not appropriate for Victorian government web sites to permit their content to be linked through the use of frames in circumstances where users could be misled into believing that the Victorian government content was content provided by another site. Equally, it is generally unadvisable for Victorian government web sites to frame material obtained from others in the absence of a negotiated framing agreement that establishes the rules under which framing is to take place. It should also be noted that technology exists to prevent unauthorised framing. 8.3 Metatags As noted above, the text and graphics on web sites are written in HTML. The HTML version of a document contains not only what the user sees, but also a number of tags and markers that are not seen. Some of these tags, known as meta-tags, can be used to designate words that are identifiable to search engines, such as the AltaVista search engine. In the absence of any other information, AltaVista will index certain selected words appearing in a Web site HTML document and use the first few words of the document as a short abstract. However, the operator of the site can use meta-tags to control the indexing of the site by the search engine, specifying both additional keywords to index, and a short description. It has become a popular practice for, say, Brand-X company to bury the trademarks of a better known competitor (such as Brand-Y) in these meta- tags, so that a viewer searching for Brand-Y by name will find Brand-X as well. Because the mark does not appear on the visible part of the page, this is sometimes referred to as "invisible trademark infringement," but it is probably more accurate to call it misleading and deceptive conduct or some other category of unfair competition. In the case of government web sites, the same technique can be used whereby a search for a government site will also return results for the other © 2001 State Government of Victoria 50
  51. 51. sits. For example, a search for the business channel would also return search result hits for a commercial business advisory service. One way ascertain whether a competitor is using meta-tags to harm another site is to enter the client's trademark or name as a search term in a search engine (as is typically done to detect an infringement) and then to note the web sites upon which the mark does not visibly appear. One can then view the HTML version of those pages, which will reveal the terms included in the meta-tag. © 2001 State Government of Victoria 51
  52. 52. Chapter 9 – Liability and risk management 9.1 Managing Risk Developing and operating web sites can expose public sector organisations to serious potential liability. A public sector organisation needs to manage these activities in a manner that does not expose it or other public sector organisations to unnecessary or excessive risk. Managing legal risks involves identifying and analysing potential risks, planning how to respond and how to control and monitor them. Risk identification and analysis involves: • identifying the sources or types of risk • defining whether a risk is necessary or unnecessary • assessing the probability of risk occurring • assessing whether the risk will have a high or low impact • understanding whether the risk can or cannot be managed There are a number of techniques that can be used to assist in identifying and analysing risk. In general terms, these can be divided into qualitative and quantitative techniques. Quantitative techniques involve the use of sophisticated modelling and analysis tools that are beyond the scope of this guide. However, qualitative techniques of risk analysis are an extremely effective way in which to define and isolate the legal risks that apply to government web sites. Qualitative techniques involve: • looking at experiences in similar or comparable projects • analysing the risks that have arisen in the past • using checklists • brainstorming © 2001 State Government of Victoria 52
  53. 53. The level of risk to which each government web site is exposed depends on the activities it carries out. For example, the level of risk for a site that provides information and advice about health and medical issues exceeds the level of risk for a site that provides information about locations that tourists to Victoria might find of interest. The types of risk that are involved with ecommerce or interactive facilities are different to those where the site is static. It follows that the risk associated with any individual government web site will not be the same as for another government web site. Each web site should undertake an assessment of the legal risks to which it is exposed before going live and as a regular maintenance exercise while the site continues to operate. In a general guide such as this it is impossible (and inappropriate) to define and assess all of the risks that can arise in the process of developing and operating a web site. However, it is possible to outline the most commonly encountered risks and liabilities and to suggest possible courses of action to manage them. These are set out in Attachment 1. 9.2 Legal tools for risk management 9.2.1 Preliminary Just as the law establishes categories of legal liability, it also provides some techniques that permit liability to be managed and minimised. However, it is important to note that while these techniques are useful for managing risk and any associated liability, risk and liability cannot be entirely eliminated. The most effective technique for minimising risk is professional and thorough web site management. Relying on disclaimers and other terms and conditions should not be considered as a substitute for poor web site design or management practices. Thus, the following discussion of the techniques that can be used to minimise risk are simply one aspect of proper web site management and should not be regarded as a ‘one size fits all’ solution. 9.2.2 Site terms and conditions © 2001 State Government of Victoria 53
  54. 54. Each web site should set out the terms and conditions on which the content and services it offers are provided to users. These terms and conditions should, at the least, be available from the site’s home page accompanied by a statement that content and services provided are subject to them. The content of the terms and conditions should cover all aspects of the scope and operation of the site. The following are some of the matters that should be considered. An example of site terms and conditions is set out in Attachment 2. 9.2.3 Disclaimers The most commonly used risk management tool is the disclaimer. In the online environment, a “disclaimer” is a written statement that attempts to avoid or disclaim liability that could otherwise arise by operation of law. From a legal perspective, a disclaimer is a form of contract, the analysis being that in return for, say, being permitted to enter a shop or patronise an establishment, the shopper or patron agrees that the shop keeper or establishment proprietor will not be liable to the shopper or patron in the event that injury or loss and damage is suffered by reason of being in the shop or patronising the establishment. A disclaimer may also be used to limit or ‘cap’ liability to a maximum amount. Traditionally, disclaimers have been unpopular with the courts as they are often considered to operate unfairly upon consumers. Through various legal devices, the courts have restricted their effectiveness. The current law is that for disclaimers to be effective, the words used: • must be clear (the courts have been quick to find ambiguities in disclaimers and construe them narrowly); and • have been brought to the attention of the individual concerned prior to that person embarking upon the conduct the disclaimer is expressed to cover. © 2001 State Government of Victoria 54