E-Commerce: Current Issues and Trends in Germany
Contents
1. bots or other automated means to derive information from publicly accessible web sites e eBay Inc v Bidder s Edge Inc use of automated means to collect data from auction site for other purposes constitutes cybertrespass Violation of eBay s right to exclude others from its computer systems E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 87 DIOQVECK AdE AIU YOQI ooe Spidering How Much Damage is Required for Cyber Trespass e Oyster Software v Forms Processing Inc Defendant argued that his bots placed a negligible load on Oyster s computer system and therefore the physical harm done to Oyster was also negligible Court nonetheless agreed with Oyster s assertion that use of bots to copy Oyster s metatags was sufficient for Oyster to prevail on its trespass claim and issued injunction gt While the eBay decision could be read to require an interference with property that was more than negligible this Court concludes that eBay in fact imposes no such requirement E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVESSA ally VU July 2 2002 Spidering How Much Damage is Required for Cyber Trespass e Register com Inc v Verio Use of automated bots to search Register com s WHOIS database Although there was no specific physical harm to Register com s web site court issued injunction findi2. Brobeck Hale and Dorr Munich July 2 2002 Brobeck Hale and Dorr Overview e Cross Border Jurisdictional Issues e Enforceability of On Line Agreements e Privacy and Data Protection Issues e Service Provider Liability e Linking Framing and Related Issues e Cyber Trespass e Business Method Patents E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVOS LIAC ALM UYI July 2 2002 Page 17 42 08 73 82 91 Some Recent Figures About E Commerce in Germany EU e Winter 2001 2002 26 5 Million people in Germany purchased goods and services for 2 6 Billion 18 5 Million e customers in the UK only 5 6 Million in Spain and 3 Mio in France Largest EU markets Tourism 24 9 Million customers books 20 7 Million and computer 19 3 Million e EITO prognosis 440 Billion B2B sales in 2003 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVOS LIAC ALM UYI July 2 2002 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US July 2 2002 Cross Border Jurisdictional Issues e These issues are potentially more troublesome for e commerce than for offline commerce Likely to be a far greater number of interstate and international e commerce transactions now that Internet has created a single world market at least for some products gt Resolves many communications problems
3. Defendant Located Outside of the EU cont In particular e Venue of the branch if the claim is related thereto e Venue where assets are located Sec 23 ZPO if assets in Germany and a sufficient relation i e in on line cases e Is the business of the ISP directed to Germany e Is there a significant number of German customers E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 13 DIOQVECK Mdl dalla VOI ooe Defendant Located Outside of the EU cont e In contract disputes venue of the place of fulfilment i e Duties fulfilled off line seat of the ISP regarding Delivery residence of customer regarding Payment Duties fulfilled on line e g download of software Legal seat of the ISP E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 14 DIOQVECK Mdl dalla VOI ooe Applicable Laws ISP Located within the EU Country of Origin Principle e Introduced by the EU e commerce Directive 2000 31 EG and the new German law on e commerce EGG e Since January 01 2002 on line practices of any ISP with its legal seat within an EU member state will be governed by the laws of that member state e But National consumer protection laws remain applicable E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 15 DIOQVECK Mdl dalla VOI ooe e International private law rules apply e German
4. in 1998 expressly endorsed business method patents describing the courts earlier ousiness method exception to patentable subject matter as ill conceived E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 90 DIOVECK AdE dd VO ee What is a Business Method Patent e Not defined in State Street Bank case e Often involve Internet based business models e Often similar to old business models but adjusted for application to the Internet e Frequently include software or hardware components E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 93 DIOQVECK AdE AIU VOT ooe Famous Examples of Business Method Patents e Amazon com s U S Patent No 5 960 411 Method and System for Placing a Purchase Order via a Communications Network 1 click shopping e Priceline s U S Patent No 5 794 207 Method and Apparatus for a Cryptographically Assisted Commercial Network System Designed to Facilitate Buyer Driven Conditional Purchase Offers reverse auctions e Open Market s U S Patent No 5 715 314 Network Sales System payments shopping carts E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 94 DIOQVECK AdE AIU VOT ooe How will Business Method Patents be Interpreted and Treated e Narrow interpretations likely e Lack of enablement or inadequate written description arguments may be more difficult than
5. with a packing slip that clearly and prominently states that gt Shipment of the product is pursuant to the buyer s purchase order and is subject to Seller s terms and gt f the buyer does not accept those terms it should return the product and Seller will refund any amounts that the buyer may have already paid for that product e The product then shipped to that buyer will also have to follow Steps 2 3 and 4 described above E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 29 DIOQVECK AdE AIU YOQI ooe International Enforceability based on current statutes and advice of foreign counsel e Shrink wraps Likely to Be Unlikely to Be Enforced Enforced U S Canada Germany United France Italy Spain Kingdom Australia 7 Netherlands Scandinavia China yet still worth Brazil Saudi Arabia Hong trying Kong e Click through easier to e Likely to Be Enforced enforce buyer sees Subject to Consumer terms before accepts Protection Laws Mexico but still not likely to be Argentina Chile enforced in China e Less Certain Japan and Korea E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 30 July 2 2002 Enforceability of On Line Agreements in Germany e Shrink wrap Although common in some areas e g software still considered ineffective under German law Option in the B2B area Choose another law where shrink wraps are
6. Obligations Sec 312 e BGB cont Legal consequences in case of violations e Agreement remains effective but e Time period for revocation right will not start before receipt of information it will end however 6 months after conclusion of the contract e Potential damage claim of customer e Sanctions by consumer protection groups E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 41 DIVOS LIAC ALM UYI July 2 2002 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 42 July 2 2002 Privacy U S Perspective e There is no general privacy legislation in the U S e Ata philosophical level balancing the protection of an individual s privacy against the commercial value of information about that individual e Ata practical level companies need to develop an adequate privacy policy and then stick to it e Manifestations No longer enough just to have a policy Federal Trade Commission ts looking at how that policy addresses the widely recognized privacy principles of gt NOTICE about on line information collection gt CHOICE regarding uses of that information E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 43 DIOQVECK AdE dA U VOT ooe Privacy U S Perspective gt ACCESS to ensure that information is accurate complete and up to date gt SECURITY and integrity of information collected
7. accepted if one party has legal residence there see above Browse wrap Considered ineffective under German law E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 31 DIOQVECK Mdl dalla VOI ooe Enforceability Issues General Terms in the B2C Area e When concluding the agreement Make an express reference to the terms Utilize clear and transparent terms Enable the customer to receive notice ina reasonable way Consent of the customer Inclusion in an order confirmation or invoice will not be effective E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 30 July 2 2002 Enforceability Issues General Terms in the B2C Area cont Follow e Step 1 Method 2 see slide 23 plus download link or website click box or e Step 5 a or b riskier each plus download see slides 28 29 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 33 DIOQVECK AdE AIU VOT ooe Enforceability Issues General Terms in the B2B Area e B2C rules mainly not applicable but in order for the transaction to be legal Clear reference to the terms necessary Chance for other party to receive notice Inclusion by reference in order confirmation is sufficient No objection from other party E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 34 DIOQVECK AdE dalla ZOI ooe Enfo
8. consumer protection laws remain applicable E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 16 DIODECK Madle ana Vorl ooe E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 17 July 2 2002 Why use On Line Agreements e Given the volume of transactions on line it is impractical to have separately negotiated agreements e Given the nature of the Internet both buyers and sellers want the convenience of agreeing to terms on line Can apply to any goods and services ordered on line even if delivered through conventional means e Using on line agreements discourages even large buyers from insisting on separately negotiated terms E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 18 DIOQVECK Mdl dalla VOI ooe ProCD Incorporated v Zeidenberg e Shrink wrap agreements are enforceable provided that Their terms are commercially reasonable and not otherwise unconscionable or subject to any other defense available under contract law User has right to reject terms upon opening package and to receive a full refund e Rejected argument that all of the terms and conditions of a shrink wrap agreement must be printed on the outside of the product packaging e Later extended to on line agreements called click through or click and accept agreements and terms of use of web sites calle
9. copy for delivery to subsequent users applies to both material placed on line by someone other than OSP Originator and material transmitted by Originator through OSP to user Acting as conduit for material traveling between other parties E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 63 DIOQVECK AdE dalla ZOI eoe Notice and Take Down Provisions e OSP must designate to U S Copyright Office and on its service contact information e Notice from copyright owner must be in writing signed include specified info Napster and ALS Scan v RemarQ Communities cases have raised questions as to type of notice required before an OSP can be held liable and level of detail required in that notice e Upon receiving such a notice OSP must act expeditiously to remove block access to allegedly infringing material e OSP exempt from liability for copyright infringement when it in good faith removes or blocks access to material E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 64 DIOVECK AdE dalla VOr eoe Notice and Pullback Provisions OSP must take additional steps to protect content provider which may lead to putting material back in system OSP must take reasonable steps to notify content provider who in turn may send counter notification OSP must provide copy of counter notification to copyright owner that sent original notice Unl
10. ctive component Clear effort to do business in jurisdiction Physical presence Problem Tension between commercial objectives and limiting jurisdictional exposure e American Bar Association is trying to propose standardized guidelines E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIMER AAS aU OYI July 2 2002 Toys R Us v Step Two SA e US company sought to sue Spanish company in US court because web site infringed on US trademark e Spanish company had been careful in limiting use of web site to Spain Only took orders for shipment to Spanish addresses Prices in pesetas and Euros only Spanish language site Contact information only by phone without international access code e U S federal district court in New Jersey found no jurisdiction Interactive site alone not enough No proof that Step Two was reaching out to New Jersey E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVUSCA IAT ally VU July 2 2002 Effort to do business or intent to cause harm e Pavlovich out of state web site operator marketed programs designed to defeat copy protection system used to protect DVDs California court exercised jurisdiction because defendant used site to intentionally injure California businesses Did not need to show that defendant tried to do business in California E Commerce Current Issues and Brob
11. d obrowse wrap agreements E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 19 DIOQVECK Mdl dalla VOI eoe Specht v Netscape Communications e Court found that users were not bound by Netscape s arbitration clause in its browse wrap agreement for those users never assented to terms e Free download Terms only visible by scrolling down screen below download button to message and then clicking on link from message Message Please review and agree to the terms of Netscape License before downloading and using the software E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 30 DIOQVECK AdE AIU VOT ooe Specht v Netscape Communications e Court concluded that mere downloading did not equal assent e Court also rejected the idea that user could be bound to a contract without even seeing the message referring to that contract e In addition to the way the message was shown court found that language used was merely an invitation to agree rather than a requirement for use of the software E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US A DIOQVECK AdE dalla VOII ooe Strategy for Enforceability Step 1 Before Submitting Order e Immediately above key where customers submit orders cause customer to accept terms and conditions e Two alternative methods e Method 1 Use of this pr
12. eck Hale and Dorr Trends in Germany the EU and US DIVDVELA Tidle ALM UVI July 2 2002 Cross Border Issues in Germany EU Defendant Located in the EU e Where can we sue the defendant e New EUGVVO applicable since March 01 2002 e In general Individuals must be sued in the courts where they have their legal residence Art 2 para 1 Legal entities must be sued where they have their legal seat Art 60 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVOS LIAC ALM UYI July 2 2002 Cross Border Jurisdiction Issues Defendant Located in the EU cont But e Venue of the branch Art 5 No 5 e In contract disputes venue of the place of fulfilment Art 5 No 1 for sales of tangible goods place of delivery e Consumer venue Art 15 16 in most cases at the legal residence of the consumer E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVDVELA Tidle ALM UVI July 2 2002 Defendant Located Outside of the EU e German international law of civil procedure is applicable provisions of the ZPO are applied mutas mutandis In general e Individuals must be sued at the courts where they have their legal residence Sec 12 13 16 ZPO e Legal entities must be sued where they have their legal seat Sec 17 ZPO E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVDVELA Tidle ALM UVI July 2 2002
13. eir legal seat Exemptions inter alia Local consumer protection laws apply Local copyright industrial property and anti trust law rights apply Local data protection laws apply No different choice of law E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 68 DIOQVECK AdE AIU VOT ooe ISP Liability in Germany TDG Information Duties e Sec 6 detailed information about the provider Name and address legal entities have to name their representatives An e mail contact address which enables quick contact Registration No e g from the Commercial register if applicable VAT No if available E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 69 DIOQVECK AdE AIU VOT ooe ISP Information Duties cont e Any authority or professional regulatory organization to which the provider is subject its correct professional name and professional rules with a link if applicable e All information should be easily visible and accessible and present thus be present on the homepage as an imprint e Fines of up to 50000 per violation E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 70 DIOQVECK AdE AIU VOT ooe ISP Liability in Germany Liability Privileges Sec 8 11 TDG e Sec 9 No ISP liability for mere conduit Durchleitung if Transfer was not caused No selection of addr
14. erms key the installation program aborts and the user will not be able to use the product E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 26 DIOQVECK AdE dalla VOr ooe Strategy for Enforceability Step 4 Splash Screen and Help Menu e Once installed the user would not be asked again to accept the terms e However every time the user enters the product the splash screen for the product will display in addition to the typical copyright and trademark notices the statement after all user may not be installer or downloader Use of this product is subject to the terms and conditions found under this product s Help Menu E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 27 _ July 2 2002 Strategy for Enforceability Step 5 Battle of Forms e If seller receives a purchase order from a prospective buyer then it must either Send that prospective buyer a copy of the terms and state very clearly that gt Sellers acceptance of the purchase order is expressly conditioned upon those terms and gt Seller shall not ship the product until the prospective buyer communicates its acceptance of those terms or E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 28 DIOQVECK AdE AIU YOQI ooe Strategy for Enforceability Step 5 Battle of Forms cont although a bit riskier Ship the product
15. ess copyright owner notifies OSP that it has filed an action to restrain the alleged infringement OSP must replace or unblock the material within 10 14 days of receiving the counter notification E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 65 July 2 2002 ISP Liability German EU Perspective e EU E Commerce Directive ISPs are not liable for infringing third party content unless they know or could have known about the illegal content No obligation to monitor However once ISP learns that particular content is illegal ISP must block access to such content E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 66 DIOQVECK AdE AIU VOT ooe ISP Liability in Germany Tele Services Act e New Tele Services Act Teledienstegesetz TDG in force since Jan 1 2002 Teleservices include inter alia Electronical distribution of advertisements for goods and services M commerce Offers to use the internet Offers of products or services within interactive electronic data banks e Thus ISP s and entities which offer on line agreements are included E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 67 DIOQVECK AdE dA U VOT ooe ISP Liability in Germany Tele Services Act cont e Country of Origin principle Sec 4 TDG German EU providers are subject to the laws where they have th
16. essees No selection or choice of information E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 71 DIOQVECK AdE dalla VOII ooe ISP Liability in Germany Liability Privileges Sec 8 11 TDG cont e Sec 11 No ISP liability for storing information of third parties if No positive knowledge or grossly negligent ignorance of unlawful information or Immediate action to delete or block information after ISP has knowledge Website guest books have to be controlled at least once a week Regional Court Trier 4 O 106 00 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 72 DIOQVECK AdE AIU YOQI ooe E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 73 July 2 2002 Who Owns Linking e British Telecom claims that it owns a 1989 patent that covers hyperlinking and it is currently suing an ISP to enforce that patent e Markman claim interpretation BT s patented invention involves the use of a single computer serving information to multiple terminal devices Some analysts believe that hyperlinking is not covered by the patented invention as so interpreted E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 74 DIOQVECK AdE AIU VOT ooe Who Owns Linking cont e Prior art 1945 Atlantic Monthly article 1968 demonstration e BT claims that administrative imprac
17. gt Resolves time zone differences Likely to be a far greater number of interstate and international transactions involving consumers Less likely to be negotiated contracts gt Parties reacting only remotely gt Emphasis on automated mass market solutions on the Internet E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVDVELA Tidle alu VU July 2 2002 Manifestations of Cross Border Jurisdictional Issues e CRIMINAL If your web site is accessible from a particular country you may be subject to the criminal laws of that country American neo Nazi sitting in jail in Germany Pakistani arrest warrant for Michael Jackson e CONSUMER PROTECTION If problems arise from your goods and services sold through your web site you probably can be sued in the home country of your customer e TAX If you are doing enough business with a particular country you might be subject to income taxes in that country e These are new issues not yet squarely addressed by international treaties or conventions E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVDVUSCA IAT ally VU July 2 2002 Status of U S Law on Internet Jurisdictional e Each U S state and federal district may have different rules e Some initial decisions have found that a website alone justifies jurisdiction although most decisions have required more TESTS Web site plus intera
18. held in Ticketmaster Corp v Tickets com Inc case Not copyright infringement not copying just transferring Not violation of terms of use unless linked site can show that linking party accepted those terms Not unfair competition as long as there is no attempt to mislead users about source of linked information goods services Similar result in Dutch case PCM v Kranten com E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 78 July 2 2002 Linking Framing German EU Perspective e Linking to a page protected by a trademark is considered lawful due to an implied consent of the trademark owner OLG Dusseldorf MMR 1999 729 but see opposite view LG Hamburg CR 2001 265 e Deep linking is unfair trade practice disputed e Framing is unfair trade practice Framing may be considered to be misleading Sec 3 UWG and unlawful Sec 1UWG UK Shetland Times EIPR 1 1996 723 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 79 DIOQVECK AdE AIU VOT ooe Metatags e Html code often used to describe the subject matter of a web site Invisible to visitor of web site Detected by search engine e Eli Lilly amp Co v Natural Answers use of another party s trademark is probative of wrongful intent to confuse consumers and is significant evidence of intent to confuse and mislead a required element of any trademark
19. herefore is entitled to injunctive relief Specifically the court referred to the disruption of Intel s business based on the time spent by Intel employees in reading soammed email messages and blocking further messages E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US A DIOQVECK AdE AIU YOQI ooe Spam German EU Perspective e EU E Commerce Directive requires unsolicited commercial e mail i e soam to be clearly identified as such Providers must regularly consult opt out registers e Sending unsolicited commercial e mail violates German competition law unfair trade practice Sec 1 UWG e After opt in of the user commercial e mails are considered lawful e Each commercial e mail and the sender have to be recognizable for the recipient Sec 7 TDG E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 85 DIOQVECK AdE dU YOQI PERY Spam German EU Perspective cont e Regional Court Frankfurt M CR 2002 220 web de Search engine operator is not liable according to sec 1 Unfair Competition Act UWG for index spamming i e flooding with links to the spammer s own homepage Nor is it reasonable for the operator to block the information acc to Sec 5 IV TDG E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 36 DIOQVECK AdE AIU VOT ooe Spidering e Use of spiders
20. in the biotech context The technology is often relatively simple e But obviousness presents a promising defense Particularly with broad claims E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 95 DIOQVECK AdE AIU VOT ooe Protection Protection of Software Sec 69a et seg German Copyright Act UrhG Directive 91 250 EC Protection of Business Methods Unfair competition law Contractual E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US July 2 2002 Slight 1 Protection e Patents may Lead to a better and more secure position in the market Prohibit others from using the SW BM Be a source of license fees e Patents are assets to attract investors Slight 2 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 97 DIOQVECK AdE AIU VOT ooe Examples e Airline X creates a Frequent Flyer program e E commerce company develops Software which can be used to find the best offer on the Internet e Software company develops a computer device which contains a SW based process for language analysis Slight 3 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 98 DIOQVECK AdE AIU VOT ooe Pro and Contra e Cons Patents lead to a monopoly position and obstruct competition e Pro Patents encourage competition by providing incentives fo
21. infringement claim e Although some cases go the other way use of trademark as a metatag without using the trademark in the visible text of a web site does not necessarily avoid trademark infringement liability E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 80 DIOQVECK AdE AIU VOT ooe Metatags German Perspective e Metatags can create trademark violation OLG Munchen CR 2000 461 e Massive use of metatags can be unfair trade practice Sec 1 UWG e Metatags can violate the name rights if no relation to the site LG Hamburg CR 2002 374 Steinhoefel E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 31 DIOQVECK Mdl dalla VOI ooe E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 82 July 2 2002 Spam e Spam is unsolicited commercial mass E Mail messages e Intel Corp v Hamidi California Superior Court ruled that soam sent to Intel Corporation s employees constituted an illegal trespass of Intel s proprietary computer system E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 83 DIOQVECK AdE AIU YOQI ooe Spam cont e On appeal Hamidi court found that even assuming Intel has not demonstrated sufficient harm to trigger entitlement to nominal damages for past breaches Intel showed Hamidi was disrupting its business by using its property and t
22. ion in Germany and in the EU Legal Sources e EU Directive 95 46 EG regarding personal data protection e German Data Protection Act Bundesdatenschutzgesetz BDSG e Teleservices Data Protection Act Teledienstedatenschutzgesetz TDDSG E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVVUSCA TIdle ally VU July 2 2002 Privacy German EU Perspective e EU Data Protection Directive became effective on October 15 1995 had to be transformed into national law by October 15 1998 has been transformed into German national law by May 18 2001 e Establishes legal principles for privacy protection and free flow of data within the EU e Prohibits the transfer of personal data from EU countries to any countries which do not have adequate data protection laws In other words the United States but see safe harbor principles E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 50 DIOQVECK AdE AIU VOT ooe EU Rights of the Data Subject e Right to be informed of the reasons for data collection intended recipients and data subject s rights at the time of collection e Right to obtain a copy of data about oneself e Right to obtain corrections erasure or blocking of data processed in violation of the Directive e Appropriate security safeguards must be adopted by controllers of data e Data cannot be kept in identified form for lo
23. la ZOI ooe Enforceability Issues Distance Purchases with Consumers cont Legal consequences in case of violations Agreement remains effective but e Time period for revocation right will not start before receipt of information it will end however 6 months after conclusion of the contract e Potential damage claim of consumer proof of damage unlikely e Sanctions by consumer protection groups E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 38 DIOQVECK AdE dalla ZOI ooe Enforceability Issues E Commerce Obligations Sec 312 e BGB e Inform customer about technical steps to complete the contract e Provide the customer with adequate technical means to recognize and correct improper entries before submitting order e Inform customer about whereabouts of copy of agreement and its accessibility e Inform customer about language options if available E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 39 DIOQVECK AdE dalla ZOI ooe Enforceability Issues E Commerce Obligations Sec 312 e BGB cont e Notify the customer if any vendor policies apply e g privacy policies and if so provide on line access thereto e Confirm any submitted order immediately by electronic means E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVOS LIAC ALM UYI July 2 2002 Enforceability Issues E Commerce
24. mentation on data processing media alone is not sufficient Slight 7 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 102 DIOQVECK Mdl dalla VOI ooe Legal Background US e 35 USC 101 Whoever invents any new and useful process machine manufacture or composition matter may obtain a patent e State Street Decision 1998 any subject matter may be patentable which is new and useful regardless of any technical contribution Slight 8 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 103 DIVOS LIAC ALM UYI July 2 2002 Legal Background Europe e EPO An invention is a technical response to a technical problem Vicom Decision 1987 IBM Decisions and Il 1999 Slight 9 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 104 DIOQVECK Mdl dalla VOI ooe Legal Background Europe Il e Draft Directive on Patentability of Computer Implemented Inventions 2002 Technical contribution No patents for computer programs only because they are implemented on a carrier Business Methods are not patentable Slight 10 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 105 DIOQVECK Mdl dalla VOI ooe Legal Background Summary Germany e Technical effect e f implemented on a computer device e No patentability of b
25. ng that Register com s loss of control over its web site was possessory interference which was sufficient harm to constitute trespass E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 89 DIVOS LIAC ALM UYI July 2 2002 Web Crawling e Monitoring of web sites for various reasons Confirming compliance with contractual commitments e g affiliate networks Checking pricing of competitors gt Unlike spidering not collecting data and displaying that data publicly for other purposes e Unclear area of law so take precautions Obtain consent of monitored party Only monitor sites whose terms of use do not prohibit such use gt Under Ticketmaster case when are those terms binding click and accept simple posting Seek indemnification from company offering web crawling services E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 90 DIOQVECK AdE AU VOT ooe E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 91 July 2 2002 The State Street Bank Patent e U S Patent No 5 193 056 entitled Data Processing system for Hub and Spoke Financial Services Configuration e Claims were for an apparatus including a computer storage and arithmetic logic circuits for providing processing for managing a particular financial services configuration e The U S Court of Appeals for the Federal Circuit
26. nger than necessary for those purposes E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 54 DIOQVECK AdE dalla VOII ooe Privacy and Data Protection in Germany Initiate On Line Agreements e Obligation to inform the customer about collection and use of personal related data at the beginning of the process e Active and conscious informed consent of the user e Provide clear information about data protection law before any data regarding the data subject can be entered e Instruction has to be separate from general terms or distance purchase law instructions E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 50 DIOQVECK AdE AIU VOT ooe Privacy and Data Protection in Germany Tele Services Data Protection Act e New Tele Services Data Protection Act Teledienstedatenschutzgesetz TDDSG in force since January 1 2002 e Obligations of the ISP Data subject must be informed at the beginning of each process about method purpose scope of collecting processing and use of personal data and whether data is processed outside of EU E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 53 DIOQVECK AdE AIU VOT ooe Privacy and Data Protection in Germany Tele Services Data Protection Act cont e QOn line consent of the data subject is only valid if the collector ensures that The consent is given by an unequi
27. oduct is subject to your acceptance of Licensor s terms and conditions of sale E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 59 DIOQVECK AdE AIU VOT ooe Strategy for Enforceability Step 1 Before Submitting Order e Method 2 Terms and Conditions visible through scroll field e Below scroll field By submitting this order accept the terms and conditions set forth above Submit Order or I accept button E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 23 DIOQVECK AdE AIU YOQI ooe e POE Help Bookmarks Location http www zinezone com info fullcopyright shtml File Edit View Go A EA Terms of Service Terms of Service This Agreement sets forth the terms and conditions which apply to the use by you of ZineZone s zines and any other service offered by ZineZone or Password Internet Publishing Corporation The right to use ZineZone s zines and ZineZone and any other service offered by ZineZone is personal to you and is not transferable 1 Definitions ZineZone s zines are the customizable online news and information directories operated by PASSWORD INTERNET PUBLISHING CORPORATION on the World Wide Web of the Internet the Service ZINEZONE is the interactive online service operated by PASSWORD INTERNET PUBLISHING CORPORATION on the World Wide Web of the Internet consisting of informa
28. on line and gt ENFORCEMENT to provide effective recourse for improper breaches of personal privacy Federal Trade Commission or state consumer protection agencies may go after a web site operator gt If it does not follow the privacy policy which it has adopted OR gt If it violates the privacy policy of another web site from which it has data mined E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 44 DIOQVECK AdE AIU YOQI ooe U S Sectoral Privacy Mandates e Internet privacy mandates supplement these principles on a sectoral basis e Children s privacy Children s on line Privacy Protection Act COPPA e Health data privacy Health Insurance Portability and Accountability Act of 1996 HIPAA e Financial data privacy Gramm Leach Bliley Act e Location data privacy Wireless Communications and Public Safety Act of 1999 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 45 DIOQVECK AdE AIU YOQI ooe Enforcement Self regulated DOES NOT MEAN unregulated FTC can act without new Internet privacy laws GeoCities 1998 Registration data released to third parties contrary to stated restrictions First Internet privacy settlement based on FIC charges of unfair and deceptive use of on line data ToysMart 2000 Proposed bankruptcy sale of customer data would violate stated privacy policy f
29. orbidding release to third parties FIC Settlement authorized sale only to qualified purchaser Bankruptcy court rejects settlement E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 46 DIOQVECK AdE AU YOQI PEY Enforcement cont ReverseAuction 2000 Collected addresses of eBay users and sent spam misrepresenting that eBay IDs were about to expire in violation of eBay s terms of use B eyond self regulation those who violate consumers privacy should be promptly called to task FTC action is an effort to buttress not supplant or detract from initiatives of private parties who develop and implement their own privacy arrangements E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 47 DIVOS LIAC ALM UYI July 2 2002 On Line Profiling e On line profiling is seen as particularly invasive even if the profile is not personally identifiable Tracks Internet usage of user and develops profile Sells targeted advertising which matches user s profile with specific products and services e Network Advertising Initiative NAI a coalition of several leading on line profiling companies formulated a set of self regulatory privacy guidelines e Those guidelines have been endorsed by the FTC E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 48 July 2 2002 Privacy and Data Protect
30. r developing technology e See also Open Source Discussion Slight 4 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 99 DIOQVECK AdE AIU VOT ooe Legal Background Germany e Sec 1 of the Patent Act PatG Para 1 Patents shall be granted for any inventions which are gt New gt Based on an inventive step gt Commercially applicable Para 2 No 3 Programs for computers among other things are not regarded as inventions Para 3 However Para 3 excludes patentability only to the extent that the inventor as such seeks patent protection for the computer program Slight 5 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 100 DIVOS LIAC ALM UYI July 2 2002 Legal Background Germany II e Technical nature of an invention e Federal Court decisions old Antiblockiersystem 1980 core doctrine Seitenpuffer Tauchcomputer 1992 overall view whether technical or not Chinesische Schriftzeichen 1992 not technical but language science Slight 6 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 104 DIOQVECK Mdl dalla VOI ooe Legal Background Germany III e Recent Federal Court decisions Logikverfahren 1999 extensive technical engineering skills oprachanalyse Einrichtung 1999 installed ona computer device Zeichenketten 2000 imple
31. rceability Issues General Terms in the B2B Area cont Follow e Step 1 Method 1 or 2 see slides 22 23 or e Step 5 a or b riskier see slides 28 29 Each method also requires the ability to download the terms link click box on website E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 35 DIOQVECK AdE AIU VOT ooe Enforceability Issues Distance Purchases with Consumers e Information obligations of the seller see the new Sec 312 c BGB German Civil Code and the corresponding information directive e Before conclusion of the agreement provide information about inter alia identity of the seller address essential features of the product or service limitations upon obligation to make delivery price including taxes shipping cost right of revocation E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 36 DIOQVECK AdE dalla ZOI ooe Enforceability Issues Distance Purchases with Consumers cont e Without delay and no later than upon fulfilment of the agreement vendor must provide the following information in written form email sufficient to the customer Sec 312 c see previous slide Details of revocation return right Details of seller Details of services and warranties If applicable details of termination E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 37 DIOQVECK AdE dal
32. s Sec 862 BGB some as an unlawful tort Sec 826 BGB E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 57 DIOQVECK AdE AIU VOT ooe E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 58 July 2 2002 US Communications Decency Act of 1996 e Old rule carrier may become a publisher by editing content and thus could be liable for Knowingly or negligently distributing defamatory material Newspaper is liable while telephone company is not e Communications Decency Act No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider 47 USC 230 c 1 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 59 DIOQVECK AdE AIU VOT ooe US Communications Decency Act of 1996 cont e Policy rationale Impossible for ISP to screen all postings Dont discourage ISPs from self policing immunize them as a publisher so that they can self police without assuming additional liability continue tradition of minimal government regulation of Internet E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 60 DIOQVECK AdE AIU VOT ooe Extension of Communications Decency Act into Other Areas e Stoner v eBay CDA shields ISPs from suits for unfair business practices
33. ticality would prevent it from suing individual Internet users But royalties which ISPs might have to pay to BT could be passed on to users in the form of higher fees E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVDVELA Tidle ALM UVI July 2 2002 Clearly Prohibited Linking Practices e Linking to material which you know to be infringing on the copyrights of a third party can subject the linker to liability for copyright infringement Utah Lighthouse Ministry case e Linking to a web site engaging in criminal activities can subject the linking party to criminal liability for aiding and abetting those activities Japanese pornography case E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 76 DIOQVECK AdE AIU VOT ooe Clearly Prohibited Linking Practices cont e Framing another site s content within your own site detracts from persona of the linked site and constitutes an unfair trade practice US Total News UK Shetland Times Kelly v Aribba Soft Corp Clicking on thumbnail image and displaying it within search engine s screen is framing and distinguishable from pure hyperlinking E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 77 DIOQVECK AdE AIU YOQI ooe Deep Linking Linking to pages deep within the linked site bypassing home page and advertising Deep linking was up
34. tion services and content provided by PASSWORD INTERNET PUBLISHING CORPORATION affiliates of PASSWORD INTERNET PUBLISHING CORPORATION and third parties The Service and ZINEZONE are referred to collectively as the Online Services Library refers to the collection of ZineZone zines Member means each person who establishes an account for access to the Service and or uses any services made available on x Document Done E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 24 DLJIVESS Tic Ie aly vy July 2 2002 Strategy for Enforceability Step 2 Accessibility of Terms e Make terms easily accessible both before and after acceptance e Available on web site or by fax e Set out in full within delivered product Behind About Product box under Help menu Printed version in brochure within package or in user manual if there is one E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVUESAT IAI aU OJI July 2 2002 Strategy for Enforceability Step 3 Installation e As part of the installation program for any downloaded product show those terms and conditions again after all installer may not be downloader The user must be able to scroll down through the agreement if he so chooses The user must hit an Accept Terms key TWICE before he can complete installation and then use the product If he hits the Reject T
35. under a California statute Also applied to bar suits based on negligent dissemination of e mail intentional infliction of emotional distress and posting of allegedly inaccurate stock price information e BUT in Gucci America Inc v Hall amp Assoc nota shield against trademark infringement actions CDA states that it may not be construed to limit or expand any law pertaining to intellectual property E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 61 DIVOS LIAC ALM UYI July 2 2002 U S Digital Millennium Copyright Act of 1998 e imposes criminal sanctions for removing security features Russian programmer visiting U S was arrested in 2001 for tampering with Adobe eBooks software s security features e On line service provider or OSP defined broadly a provider of on line services or network access or the operators of facilities therefor Do not need to be in the business of providing on line services E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US DIVOS LIAC ALM UYI July 2 2002 U S Digital Millennium Copyright Act of 1998 cont e Creates 4 safe harbors for OSPs from copyright infringement actions in addition to other defenses under copyright and other laws Storing material at request of user Referring users to material at another location System caching where OSP makes temporary
36. usiness methods US e New and useful including business methods EU Future Technical contribution e No patentability of business methods Slight 11 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 106 DIOQVECK Mdl dalla VOI ooe IP Strategy e Patents may be Expensive Disclose trade secrets Not efficient product dependent e Alternatives Trademark strategy Non disclosure agreements Non competition clause Non solicitation clause Non disclosure of the source code escrow agreements Slight 12 E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 107 DIOQVECK Mdl dalla VOI ooe For further information e Hale and Dorr Internet Alerts at http www haledorr com internet_law e_alerts html e Ken Slade at 1 617 526 6184 or kenneth slade haledorr com e Dr Christian Breuer at 49 89 24 213 107 or breuer bhd com e Dr Florian von Baum at 49 89 24 213 101 or baum bhd com E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 108 DIOQVECK Mdl dalla VOI PE
37. vocal and deliberate act The consent is logged The content of the consent can be retrieved by the data subject at any time E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 54 DIVOS LIAC ALM UYI July 2 2002 Privacy and Data Protection in Germany Tele Services Data Protection Act cont e Instruction to the data subject about right to revoke consent with effect for the future e Provider has to ensure with adequate means that User can disconnect the line at any time Personal user data can be immediately deleted or blocked after the process The process for entering data about the user is secure E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 55 DIOQVECK AdE AIU VOT ooe Privacy and Data Protection in Germany Tele Services Data Protection Act cont Data about each personal user can be processed separately Personal user data is only used for billing purposes Anonymous user profiles for marketing purposes etc are not combined with personal data about the user E Commerce Current Issues and Brobeck Hale and Dorr Trends in Germany the EU and US 56 DIOQVECK AdE AIU VOT ooe Privacy and Data Protection in Germany Cookies e Not generally unlawful e If they contain personal related data use is problematic due to restrictive data protection laws Sec 3 TDDSG e Some consider use of cookies as violation of possession law
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