Bierce & Kenerson, P.C.

Legal Guides: Electronic Commerce

LEGAL GUIDE TO ELECTRONIC COMMERCE

Electronic Commerce as an Infrastructure Service

The telecommunications revolution is accelerating the convergence of markets in services and goods worldwide. We focus on the laws affecting converging "infrastructure services," such as information technology, telecommunications, energy, "leased employees," specialized business processes and other "invisible" support services. Regulated or not, such services provide the backbone for business, finance, publishing, medicine, education, insurance, government and industry. As such an "infrastructure service," electronic commerce supports the key mission of business: to contact customers and vendors and to buy and sell goods and services.

On-line Technical Infrastructure

Remote Access: virtual private networks, FTP, e-mail, EDI
FCC; 1996 Telecommunications Reform Act
World Wide Web consortium and protocols: hypertext transfer; distribution and replication; common gateway interface; extensible markup language and variation; secure electronic transaction; standard general markup language
Security: anti-virus and intrusion detection; encryption (internal vs. external; key recovery; cryptographic API) and firewalls; disaster recovery planning
Digital signatures, authentication authorities, "cyber notaries;" digitally signed "applets" in Java or Active-X
Internal: access control, ethics, policies

On-line Business Transactions

On-line Publishing

Solicitation, public relations
Subscriptions: proprietary research, copyrighted works, public records
Intranets: messaging, group collaboration, policy manuals, newsletters
Repair: technical specifications, procedures
Securities research and prospectuses

Automated Market Transactions

Extranets: supply-chain integration and management
Automated Dealing via Intelligent Agents: searching, selecting, comparing, responding to human inquiries or to data streams (e.g. competitor pricing)
Automated Shopping: electronic payment authorizations via credit card, store credit, bank debit or "cyber-cash"
Automated Services: transfers of data, voice, video, software, software agents ("applets"); software maintenance, data base "vaulting," remote administration of digital systems (computers, environmental controls, security, monitoring equipment, etc.)
Remote Transactions Processing: on-line banking and investing; just-in-time ordering; remote health diagnosis
Portals: "communities" in a common sector (e.g. health, procurement, investments); subscription, advertising, strategic alliances, "take-or-pay" commitments; exclusivity; preferential search criteria and positioning

Automated Market Transactions

Call Centers: customer cared, help desk
Telecommuting
Outsourcing of technological infrastructures and support services

Legal and Tax Issues

Contracting Issues

Website: design, interactivity, access, hosting protection
Contract formation on-line ("click wrap")
Website design and functionality
Integration of information, telecom and other core tendencies with business functions: uptime; interoperability; service levels
Outsourcing of infrastructures: ownership vs. management

Intellectual Property Law

Domain names (InterNIC and WIPO/Internet Council of Registrars/Emergent Corp.): arbitration of disputes
Copyright; fair use, protected "speech"
Trademark, defamation, unfair competition, trade dress and parody
Hyperlinks: "framing" and false designation of origin, piggy backing on others' infrastructures
Patents: patentability, disclosure requirements and doctrine of equivalents
Emerging political challenges: Internet Tax Freedom Act
Database Protection: originality, "sweat of the brow," misappropriation theory; sui generis "property right" theory

Taxation

Taxes: income, sales, intangible property, value-added
Taxable presence or nexus: source vs. residence; forum shopping
Source and character of income
Apportionment and tax credits
"Related" intercompany transactions

Public Policy Issues

U.S. Regulatory Issues

Privacy, Data Protection, and the USA Patriot Act; management of foreigners' privacy for data process in the USA; FTC best practices and unfair trade practices; alternative solutions
"Remote" Jurisdiction: long-arm jurisdiction, choice of applicable law and forum, nexus; disclosures
Regulation of normal transactions: access control for securities offerings collusive pricing in oligopolistic markets (e.g. energy, transportation)
Licensing: DOJ/FTC Antitrust Guidelines; Microsoft browser tying
Rights of privacy: HIPAA, GLB, PIPEDA, California notice rules, EU Data Protection Directive; CAN-SPAM act; unauthorized access to bank data; abuses of "cookies"
Encryption and Export Controls
Telecom: "open access"

International Regulatory Issues

Foreign Legal Issues: taxation, jurisdiction, regulation (e.g. pornography, comparative advertising), contract formation
Foreign Policy: inter-governmental exchange of cryptographic keys
UNCITRAL: draft convention on electronic commerce
European Union: directives on privacy, software protection, data protection and unfair terms in consumer contracts; excluding consumer transactions by disclaimer, "exhaustion of rights" in sale of products that incorporate software; Internet tax; remote distance selling
World Trade Organization: freedoms of access under GATT Uruguay Round Trade in Services; dispute resolution forum