Magazine article Risk Management

Cyberlaw, Computer Programs and the First Amendment

Magazine article Risk Management

Cyberlaw, Computer Programs and the First Amendment

Article excerpt

The law of cyberspace is evolving before our eyes--nearly as quickly as the technology. As the regulatory and judicial systems struggle to define this complex arena, it is critical for all risk management and insurance professionals to follow legal trends. The decisions made today will have long-term ramifications for doing business and managing the exposures on the Internet.

To provide insight into Internet-related legal issues, Ken Bass, a partner in the Washington, D.C., law firm of Venable, Baetcher, Howard & Civeletti, joined me this month to summarize two recent developments from the emerging frontier of cyberlaw.

Two U.S. federal court decisions issued on opposite coasts illustrate the novelty of the legal issues in cyberspace, as well as the vastly different conclusions that judges may reach in these uncharted waters. While both decisions deal with export control over cryptographic source code, at the heart of each decision lies a fundamental conflict in judicial perspectives on the First Amendment as it relates to computer programs.

In a decision issued in the March 1996 case Karn v. Department of State, the plaintiff challenged an administrative decision of the U.S. State Department that had allowed cryptographic source code printed in a book to be freely exported but simultaneously ruled that if the source code listings took the form of magnetic records on mylar (in other words, source code files on a diskette), any export would be a criminal violation. Mr. Karn challenged that decision, urging that the distinction was irrational, capricious and thus a violation of the Constitution's due process clause.

Mr. Karn also argued that the requirement of an export license for cryptographic source code violated the First Amendment because source code was a form of "pure speech" that could not be restrained unless the government demonstrated a compelling threat to an important interest. Mr. Karn had argued for application of the "clear and present danger" test that had been applied previously in The New York Times v. United States case in which the government unsuccessfully sought to prohibit publication of the Pentagon Papers.

In the Karn case, Judge Charles R. Richey upheld the State Department's decision. At the heart of that ruling was his conclusion that restrictions on cryptographic source code were properly analyzed under the United States v. …

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