E-Commerce Disputes: Legislation and Litigation Are the Brave New World

By Lunseth, John B., II | Defense Counsel Journal, July 2001 | Go to article overview

E-Commerce Disputes: Legislation and Litigation Are the Brave New World


Lunseth, John B., II, Defense Counsel Journal


"Linking," "meta-tags," "framing"--they're all part of the new world, but are they infringements? That's the question for the next cases

Y2K (otherwise known as the year 2000) turned out to be an interesting one for the digital economy. The dreaded meltdown didn't occur, but many other issues pushed their way to the front pages. In the last quarter of the year, the big news was the bursting of the dot.com bubble, with more than 210 Internet companies closing their doors, taking with them more than $1.5 billion in investment money.

Despite these "growth pains," electronic commerce continued to expand. Consumers increased their online shopping by 46 percent, making purchases of about $56 billion in sales in U.S. dollars for the year. By 2010, ActivMedia Research projects business-to-consumer (B2C) sales will exceed $1.1 trillion. Other sectors of the Internet economy, notably business-to-business (B2B) are growing at an even faster rate, and by 2010, B2C transactions will comprise only a third of the total Internet economy.(1)

This rate of growth has dramatically impacted the law and law firms. Lawyers now operate in ways markedly different from just five years ago. E-mail communication with clients, opposing counsel and even the courts is becoming the norm. The first place prospective clients go to find information about lawyers and law firms is the Internet and the law firm's web site. Insurance carriers are writing insurance policies to cover new types of potential liability that did not exist just a few years ago.

A comment is appropriate about the quality and nature of the authorities cited. There are two unique things about Internet and e-commerce law that make research different.

First, the Internet reaches everywhere, and issues of first impression may arise in the United Kingdom, a European country, China or who knows where. Since the reach of material put on the Internet is truly worldwide, it is no longer possible to ignore legal rules and decisions in other countries because clients' websites are accessible there, or web sites hosted in those countries are accessible in homes and businesses in the United States. On the other hand, it is not always easy to get copies of decisions or easy to understand what they mean in the context of the local legal regime.

Second, the Internet is a place of instant communication, but it has not yet learned the value of documentation. Word of novel complaints or decisions spreads around the Internet instantly, often even before it is published by the court or by a reporting service. A week or a month later the Internet community has moved on to a new issue, and the posted document is deleted or replaced with other material because it is no longer "cutting edge." All that is left is discussion of the cases archived by news sources and a few law firm websites. When a writer provides a citation or hyperlink to the material, the citation means the material was there when the site was visited, but it may not be there when the reader tries to access it.

What are some of the e-commerce issues and disputes currently being litigated? First, a look at the principal new federal legislation aimed at e-commerce and then the legal disputes.

NEW LEGISLATION

The rapid development of new technologies has severely taxed the ability of existing laws to protect intellectual property. A number of statutes have been enacted at the federal level to deal with this problem, notably the Digital Millennium Copyright Act and the No Electronic Theft Act, both of which deal primarily with copyright issues, and the Anticybersquatting Consumer Protection Act, which relates to Internet domain names. These acts are complex, but a summary of them is important.

A. Digital Millennium Copyright Act

The Digital Millennium Copyright Act (DCMA) is five separate acts dealing with separate subjects, ranging from the copyrightability of vessel hulls to computer maintenance. …

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