1. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-1 A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne Nancy K. Kubasek Bartley A. Brennan M. Neil Browne l

2. ©2006 Prentice Hall Ch. 6-2 CHAPTER 6 Cyberlaw and Business THE LEGAL ENVIRONMENT OF BUSINESS

3. © 2006 Prentice Hall Ch. 6-3 -3 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?

4. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-4 -4 Some 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?

5. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-5 -5 Jurisdiction Mere presence of Web site not sufficient The “Sliding Scale” of Zippo: Sales of goods take place via Web site Information is exchanged via Web site Information is provided, passively, via Web site More Interactivity jurisdiction more likely

6. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-6 -6 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 U.S. Supreme Court finds the Communications Decency Act unconstitutional

7. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-7 -7 Playboy Channel The Right to Choose Upheld Blocking/scrambling technology required Restrictive hours imposed The U.S. Supreme Court finds the Telecommunications Act of 1996 overbroad

8. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-8 -8 State Regulations States’ attempts to regulate sales and practices conducted via Internet are increasingly challenged Orders placed and shipped across state, even national borders State interest in regulation of selected products (alcohol, medicines) becoming irrelevant, impossible?

9. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-9 -9 Intellectual Property Issues Patents Trademarks and Keywording Copyrights and Web Sites

10. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-10 -10 Patents Product, process, invention, machine, or plant 20-year duration Protected via infringement actions

11. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-11 -11 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

12. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-12 -12 Trademarks Not created in bad faith Not illegal, but future legislation expected Warehousing: compilation of prospective business domain names for sale

13. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-13 -13 Copyrights Creates rights in expression of creative ideas Books, music, film, plays, computer programs Copyrights and Web Sites Sharing Data Contributory Copyright Infringement Linking and Framing

14. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-14 -14 Copyright Issues Sharing Software The Napster Case Contributory Copyright Infringement Enterprise liability Intellectual Reserve v. Utah Lighthouse

15. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-15 -15 Infringement Examples  Linking and Deep Linking  Framing  Sticky Web sites  Linking and Deep Linking  Framing  Sticky Web sites

16. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-16 -16 Unfair competition False advertising False representation False designation of origin Trademark dilution and infringement Other Causes of Action

17. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-17 -17 E-Commerce Issues PrivacyPrivacy MarketingMarketing CybersignaturesCybersignatures HarassmentHarassment

18. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-18 -18 Privacy Fear of misuse of personal information Fear of surveillance Responses: Public Sector Private Sector

19. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-19 -19 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  Privacy Act of 1974  Electronic Communications Privacy Act of 1986  Children’s Online Privacy Protection Act of 1988  Financial Services Modernization Act of 1999

20. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-20 -20 State Law Common law rights to privacy Tort Law Contract Law Unfair trade practices and fraud theories

21. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-21 -21 Online Marketing Issues Concerns: Deception and fraud Criminal activity Direct-to-consumer sales—bypassing regulations intended to protect consumers

22. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-22 -22 Cybersignatures Electronic Signatures in Global and National Commerce Act 2000 (E-SIGN) Allows creation of valid and enforceable contracts online

23. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-23 -23 Employment Law Issues Privacy rights of employees Online harassment Vicarious liability of employer for defamation Definition of “workplace” ISP liability for content of messages

24. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-24 -24 The War Against Cybercrime Hacking: Denial of Service Attacks Insider Trading Internet Gambling Spam Identity Theft

25. THE LEGAL ENVIRONMENT OF BUSINESS © 2006 Prentice Hall Ch. 6-25 -25 Summary Technology is leading the law to new areas Intellectual property law is evolving E-commerce issues are emerging Government is combating cybercrime