1. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. Twomey & Jennings BUSINESS LAW Chapter 11 Cyberlaw Chapter 11 Cyberlaw

2. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 2 Introduction to Cyberlaw Cyberlaw is not a new body of laws. Cyberlaw is the application of existing laws and legal precedent to new problems presented with the technology of the Internet. Cyberlaw issues include: Cyberlaw is not a new body of laws. Cyberlaw is the application of existing laws and legal precedent to new problems presented with the technology of the Internet. Cyberlaw issues include: TortsContracts Intellectual Property Criminal Law Constitutional Restraints and Protections Securities Law

3. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 3 Tort Issues in Cyberspace Privacy: –E-mail sent over an employer’s network is not guaranteed private. –E-mail sent over a home-use network may be intercepted; this issue is still developing. Privacy: –E-mail sent over an employer’s network is not guaranteed private. –E-mail sent over a home-use network may be intercepted; this issue is still developing. Smyth v Pillsbury Co. (1996) Did the Employee have a Right to Privacy?

4. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 4 Tort Issues in Cyberspace Privacy: –Web sites routinely collect information about their customers; this information may be sold to other businesses. –Identity theft, or the use of someone else’s identity to purchase or obtain credit, is a growing problem. Most web merchants minimize this problem by providing a secure mode of transmitting personal information. Privacy: –Web sites routinely collect information about their customers; this information may be sold to other businesses. –Identity theft, or the use of someone else’s identity to purchase or obtain credit, is a growing problem. Most web merchants minimize this problem by providing a secure mode of transmitting personal information.

5. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 5 Tort Issues in Cyberlaw Appropriation (the unauthorized use of someone’s image) is illegal both on the Internet and elsewhere. Defamation. Appropriation (the unauthorized use of someone’s image) is illegal both on the Internet and elsewhere. Defamation. Doe v 2TheMart.com Inc. (2001) You’ve Got Mail, but Only the ISP Knows Who It’s From.

6. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 6 Contract Issues in Cyberlaw Though most contract issues have not changed with the Internet, a few new questions have arisen. –At what point is the contract formed? –Is an electronic signature valid? Misrepresentation and Fraud. –Fraud is the most reported crime committed via the Internet. This is in part due to the high volume of sales transactions over the Internet. Though most contract issues have not changed with the Internet, a few new questions have arisen. –At what point is the contract formed? –Is an electronic signature valid? Misrepresentation and Fraud. –Fraud is the most reported crime committed via the Internet. This is in part due to the high volume of sales transactions over the Internet.

7. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 7 Intellectual Property Issues The Internet has not actually changed intellectual property rights, but has facilitated the illegal copying of copyrighted material. –The best known case dealing with intellectual property via the Internet is the suit against Napster, the web site which facilitated the free downloading of copyrighted songs. The Internet has not actually changed intellectual property rights, but has facilitated the illegal copying of copyrighted material. –The best known case dealing with intellectual property via the Internet is the suit against Napster, the web site which facilitated the free downloading of copyrighted songs.

8. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 8 Criminal Law Issues A computer may be the target of the crime, as when someone “hacks” into a bank’s computer records. Sometimes the computer is the tool of the crime, as in the transporting of pornography across state lines. A computer may be the target of the crime, as when someone “hacks” into a bank’s computer records. Sometimes the computer is the tool of the crime, as in the transporting of pornography across state lines. United States v Czubinski (1997) Surfing the Net for Tax Info: Criminal or Curious?

9. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 9 Criminal Procedure and Rights Kyllo v United States (2001) Is thermal imaging a “search” under the Fourth Amendment? The fourth amendment protects against unlawful search and seizures. Applies to search of homes, offices and computers. The fourth amendment protects against unlawful search and seizures. Applies to search of homes, offices and computers.

10. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 10 Constitutional Restraints First Amendment Rights –Internet free speech is protected as it is anywhere. –Violations outside the First Amendment protection are common on the Internet due to ease of communication and anonymity. Commerce Clause issues. –Nexus for Taxes. Where is the office? First Amendment Rights –Internet free speech is protected as it is anywhere. –Violations outside the First Amendment protection are common on the Internet due to ease of communication and anonymity. Commerce Clause issues. –Nexus for Taxes. Where is the office?

11. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 11 Constitutional Restraints Due Process Issues. –What about fairness and minimum contacts in interstate commerce? –When should an internet company be required to defend itself in another state? Due Process Issues. –What about fairness and minimum contacts in interstate commerce? –When should an internet company be required to defend itself in another state? Bensusan Restaurant Corp. v King (1997) Jurisdiction Hits a Blue Note.

12. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 12 Securities Law Issues The Internet has facilitated new methods of securities trading, including day trading and minute-by-minute tracking of stock performances. Abuses have arisen from the use of the Internet; most notably the practice of “pump and dump.” This is where a trader spreads false information about a stock to quickly raise its price, then selling existing shares at an inflated price. The Internet has facilitated new methods of securities trading, including day trading and minute-by-minute tracking of stock performances. Abuses have arisen from the use of the Internet; most notably the practice of “pump and dump.” This is where a trader spreads false information about a stock to quickly raise its price, then selling existing shares at an inflated price.