THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 6-1 The Legal Environment of Business A Critical Thinking Approach 5 th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch CHAPTER 6 Cyberlaw and Business THE LEGAL ENVIRONMENT OF BUSINESS

© 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Cyberlaw and Business How is the law changing to meet the demands of new business and social issues generated by the use of computer technology?

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Unresolved Issues  Free speech vs. intellectual property rights  Computer security vs. system efficiency  Are jurisdictional boundaries obsolete?  Will cyberspace facilitate free trade?  How should the legal system respond?

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Jurisdiction  Mere presence of website not sufficient  The “Sliding Scale” of Zippo:  Sales of goods take place via website  Information is exchanged via website  Information is provided, passively, via website More Interactivity jurisdiction more likely

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch ACLU v. CDA  The Court applied the “Strict Scrutiny” standard  “Dial-a-porn” case used as precedent  Statute not “narrowly tailored” to accomplish legitimate purposes Ruling: U.S. Supreme Court finds the Communications Decency Act unconstitutional

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch The Right to Choose Upheld Playboy Channel –  Blocking/scrambling technology required  Restrictive hours imposed The U.S. Supreme Court finds the Telecommunications Act of 1996 overbroad

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch State Regulations  States’ attempts to regulate sales and practices conducted via Internet are increasingly challenged.  Orders are placed and shipped across state, even national borders.  State interest in regulation of selected products (alcohol, medicines) becoming irrelevant, impossible?

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Intellectual Property Issues  Patents  Trademarks and Keywording  Copyrights and Websites

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Patents  Product, process, invention, machine, or plant  20-year duration  Protected via infringement actions

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Trademarks  Usual Ruling: Courts find a way to rule in favor of trademark holder  Basis: there is bad faith in these cases  New Law: Anticybersquatting Consumer Protection Act 1999 Cybersquatting: The squatter registers the domain name before the trademark owner can—then attempts to sell the domain name to the owner of the trademark

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Trademarks  Not created in bad faith  Not illegal, but future legislation expected Warehousing: compilation of prospective business domain names for sale

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Copyrights  Creates rights in expression of creative ideas  Books, music, film, plays, computer programs  Copyrights and Websites  Sharing Data  Contributory Copyright Infringement  Linking and Framing

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Copyright Issues Sharing Software  The Napster Case  Contributory Copyright Infringement  Enterprise liability  Intellectual Reserve v. Utah Lighthouse

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Infringement Examples  Linking and Deep Linking  Framing  Sticky Websites

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch  Unfair competition  False advertising  False representation  False designation of origin  Trademark dilution and infringement Other Causes of Action

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch E-Commerce Issues PrivacyPrivacy MarketingMarketing CybersignaturesCybersignatures HarassmentHarassment

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Privacy  Fear of misuse of personal information  Fear of surveillance Responses:  Public Sector  Private Sector

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Federal Statutes  Privacy Act of 1974  Electronic Communications Privacy Act of 1986  Children’s Online Privacy Protection Act of 1988  Financial Services Modernization Act of 1999

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch State Law  Tort Law  Contract Law  Unfair trade practices and fraud theories Common law rights to privacy

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Online Marketing Issues Concerns:  Deception and fraud  Criminal activity  Direct-to-consumer sales— bypassing regulations intended to protect consumers

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Cybersignatures  Electronic  Electronic Signatures in Global and National Commerce Act 2000 (E-SIGN)  Allows  Allows creation of valid and enforceable contracts online

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Employment Law Issues  Privacy rights of employees  Online harassment  Vicarious liability of employer for defamation  Definition of “workplace”  ISP liability for content of messages

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch The War Against Cybercrime Hacking: Denial of Service Attacks Insider Trading Internet Gambling SpamSpam Identity Theft

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Summary  Technology is leading the law to new areas  Intellectual property law is evolving  E-commerce issues are emerging  Government is combating cybercrime

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall