Cyber Law: A Legal Arsenal for Online Business
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About this ebook
Cyber Law is a comprehensive guide for navigating all legal aspects of the Internet. This book is a crucial asset for online businesses and entrepreneurs. "Whether you're doing business online as a company or a consumer, you need to understand your rights. Trout successfully places legal complexities into digital perspective with his latest book." -- Chris Pirillo - Founder of Lockergnome "CyberLaw is a must-read for anyone doing business-or just chatting or socializing - on the Internet. Without us realizing it, more and more laws are being passed each year, laws and restrictions that significantly increase the likelihood that you're skirting, or even breaking some laws when you post that restaurant review, write about the bad date you had last week, or complain about a previous employer. Your choices are easy: read CyberLaw or suffer the potential consequences." -- Dave Taylor, Entrepreneur and Strategic Business Consultant, Intuitive.com "Brett Trout has the bottom-line, honest, insightful, straightfowardest, most clear-headed take on intellectual property issues you could want. He's your way out of the maze." -- John Shirley, scriptwriter and author
Now at the New York Public Library!
"This book is a quick read and serves as an introduction to the basic issues involved in Internet marketing. Cyber Law's details provide valuable clues..."
--Martha L. Cecil-Few
The Colorado Lawyer
"One of the biggest misconceptions ... involves fair use. People mistakenly think they can freely use the work of others in their blogs or YouTube videos, for example."
Lynn Hicks & David Elbert, DesMoinesRegister.com
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Cyber Law - Brett J. Trout
World Audience (www.worldaudience.org) is a global consortium of artists and writers, producing the literary journal Audience and The Audience Review. Our periodicals and books are edited by M. Stefan Strozier and assistant editors. Please submit your stories, poems, paintings, photography, or artwork: submissions@worldaudience.org. Inquire about being a reviewer: theatre@worldaudience.org. Thank you.
Cyber Law: A Legal Arsenal for Online Business
by
Brett J. Trout
––––––––
A World Audience Book
(www.worldaudience.org)
––––––––
September, 2007
New York, Newcastle (NSW, Australia)
Dedicated to Lindy and Griffin
Hoppa í polla
With great thanks, I acknowledge the editorial input of my legal assistant Sharon Janes, without whom this project could not have been completed. I would also like to acknowledge the scrupulous editorial efforts of Kyle Torke and Martha Boesen in adding a fine polish to my work. Any errors or omissions, however, are solely my own.
CONTENTS
Introduction...........................................................................................7
Chapter One..........................................................................................9
Chapter Two........................................................................................17
Chapter Three.......................................................................................43
Chapter Four.........................................................................................47
Chapter Five........................................................................................51
Chapter Six...........................................................................................69
Chapter Seven.......................................................................................83
Chapter Eight........................................................................................85
Chapter Nine.........................................................................................89
Chapter Ten.........................................................................................93
Chapter Eleven.....................................................................................97
Chapter Twelve....................................................................................105
Chapter Thirteen..................................................................................111
Chapter Fourteen..................................................................................119
Chapter Fifteen....................................................................................125
Chapter Sixteen....................................................................................131
Chapter Seventeen.................................................................................137
Chapter Eighteen.................................................................................141
Chapter Nineteen.................................................................................147
Appendix A.........................................................................................153
Appendix B........................................................................................159
Appendix C........................................................................................165
Appendix D.......................................................................................169
Appendix E.........................................................................................171
Appendix F........................................................................................173
Glossary............................................................................................179
Index................................................................................................183
INTRODUCTION
––––––––
Internet law grows at least ten times faster than most other areas of law. By the time you read An Internet Arsenal, most of the internet laws I describe will be different or at least subject to new interpretation. Collecting materials for An Internet Arsenal over the last decade, what I find most interesting is not where internet law is, but how different regulations, practices, and standard guidelines emerged. Although most internet laws affecting your company are federal in nature, the relative newness of Internet legislation leaves many gaps in the legislative landscape. States fill these gaps with an overlapping collage of various state and common laws. Given the mix of federal, state, and common laws, determining which laws apply to a particular transaction can be complicated. An online contract between companies in California and New York, executed through a server in Colorado, supplied by a vendor in Nevada to a retailer in Georgia, for example, can offer especially vexing problems.
The mercurial nature of the online legal landscape contributes to the confusion. New Internet laws are pending every day. What is the Law of the Internet
today will not be the Law of the Internet tomorrow. A snapshot of the law may be fine for a relatively well-defined, slowly evolving area of the law, but not for internet law. Internet law evolves so quickly, a snapshot is really just a historical record of where internet law settled for a moment before moving forward. A snapshot can only show what internet law is not. Instantly out of date, such a snapshot provides no clue about where internet law is today or where the law is headed tomorrow. The landscape is not barren, however, and An Internet Arsenal provides a unique stratagem for considering and configuring your internet legal needs.
A better approach to grasping and holding on to the intricacy of the legal landscape is to examine how various areas of internet law have evolved over time and how the evolution mirrors and/or deviates from the way other areas of law have developed. A little background not only allows legal advisors to extrapolate where the law likely is today, but where regulations, policies, and rulings might be tomorrow, next month, or even next year.
An Internet Arsenal presents what internet law was like in the past—the recent past, but the past nonetheless. You can use this book in two ways. One way is to use the issues An Internet Arsenal raises to spot concerns and make decisions based upon what the internet law was in the recent past.
Another, better, way to use this book is to find themes and trends in the areas of internet law of particular interest to your company. While the rapid evolution of internet law makes pinpointing difficult, the quick changes make patterns easier to recognize. From these patterns, you can formulate some educated guesses as to where a particular law is headed and plan accordingly. While there is no guarantee your guess will be right, over time the odds are that you will much better positioned than others in your industry who are making decisions based upon analyses of the law already a year or more out of date.
Keep An Internet Arsenal close at hand. Refer to its chapters frequently. Make notes in the margin of changes in your industry and patterns you see developing. Use the language and examples as an informational roadmap for your business. Identify small issues early and enlist your attorney to prevent them from becoming large problems. Stay informed about changes in they law. Add them to your store of knowledge and use them to identify patterns and build a new map for your company’s future.
An Internet Arsenal distills the various federal, state, and common laws to their basic principles. While these principles hold true generally, they may not be applicable in every state or in every situation. Because internet law is parochial and evolving, a good internet business entrepreneur will check local laws and consult with a knowledgeable Internet attorney before making any critical decisions that could adversely affect his or her company. Use An Internet Arsenal to spot issues and identify strategies, but rely on a competent attorney to discuss and implement approaches suitable to your company, your state, and your unique business needs.
––––––––
Brett J. Trout
September, 2007
Chapter One
The Internet—A Connected, Living World
Before a company can grasp internet law, the company must understand the internet as a living, changing organism. understanding the Internet, however, is like trying to understand an explosion milliseconds after detonation. The web is simply too large, and growing too rapidly, to accurately appreciate its metes and bounds. The best one can hope for is to understand a snapshot of the Internet at one particular point in time. From such a snapshot, general strategies for embracing and capitalizing on the Internet’s bounty emerge. Any such strategies, however, must necessarily incorporate a healthy dose of flexibility and willingness to adapt to the inevitability of future changes.
Change is, of course, the most important factor to consider when analyzing the Internet. The resources you accessed last week may not be available today. New resources will develop tomorrow, supplanting resources you considered earlier. Regular use of the Internet, and a healthy quest for new resources, is simply the only way to reign in the Internet’s intrinsically mercurial nature.
What follows is a short history and general primer on the Internet. As such, history is the only portion of An Internet Arsenal that will remain instantaneously current. Sites and statistics referred to in this book, therefore, must be viewed in light of the publication date. The further one moves from this date, the less likely the sites and statistics will be relevant. To obtain the latest information and sites, I encourage users to search for relevant sites themselves. The most useful sites are typically sites users discovered on their own. If, during one of these searches, you find a particularly useful web site, please drop me an email and let me know. I will be glad to incorporate your discovery into the next edition of An Internet Arsenal.
How the Internet Works
Understanding the Internet requires understanding how the Internet came into being. The original impetus for the Internet was, strangely enough, the Soviet Union’s launch of Sputnik I. As a result of Sputnik I’s launch, President Eisenhower set out to recapture the lead in the space race. President Eisenhower enlisted the Department of Defense (DOD) to form the Advanced Research Project Agency (ARPA). As a direct result of ARPA’s efforts, the US was able to launch a satellite only eighteen months after the launch of Sputnik I. With both super powers launching satellites, President Eisenhower became concerned about an intercontinental missile attack. Shortly after the Soviets launched Sputnik II, ARPA began investigating the creation of an interconnected network of governmental research laboratories and military branches in an effort to decentralize the military’s intelligence systems.
In 1962, Paul Baran, of the Rand Corporation, became interested in using telephone lines to develop a communications infrastructure resistant to nuclear attack. The thought was to create a decentralized network with several nodes,
each having multiple connections to various other nodes. A non-linear structure would allow continued operation and file transfer in the event that one or more of the nodes were destroyed. In the late '60s, research nodes were established at four American universities—the University of California at Santa Barbara, the University of Utah, the Stanford Research Institute, and the University of California, Los Angeles. By 1971, there were fifteen nodes.
After a failed effort to relay all messages economically via satellite, ARPA once again looked to the existing telecommunication infrastructure. The upgrading of the telecommunication infrastructure to fiber optic cable at about the same timeframe led the way to faster and more efficient communication over the network. A transmission control protocol (TCP) was developed in 1974 to transfer information uniformly over the new network. By 1975, there were 100 nodes, and, in 1982, the Department of Defense declared TCP Internet Protocol (TCP/IP) as its standard protocol. The Internet was now a connection of affiliated networks all using the same TCP/IP protocol. By 1990, the Internet
was an independently viable entity, allowing ARPA to exit the picture. In 1992, CERN released the Worldwide Web. At that time, the Internet consisted of over five million computers with over one million online hosts. Today, the Internet is used by over one hundred and fifty million people, over half of whom live in the United States.
Who owns the Internet? The short answer is no one—and everyone. The Internet is not independently owned, but is simply a worldwide web (network) of computers interconnected by telephone lines. Individuals access the Internet using a browser. A browser is a software program stored locally either on the hard drive of the computer or on an office intranet. The browser is used to view information over the Internet. Typically, users access the Internet through an Internet Service Provider (ISP) using TCP/IP protocols to allow connection to the Internet.
An ISP can be considered a bandwidth broker. As an analogy, consider the Internet as a network of pipes distributing water to every house in the United States. Instead of self-contained systems, however, assume the pipes are all connected like a spider web. All of the houses are connected to one of thousands of fourth-tier distributors. All of the fourth-tier distributors are connected to hundreds of third-tier distributors. All of the third-tier distributors are connected to dozens of second-tier distributors, and so on. Now assume all of the water travels at the same speed. To get more water, you purchase a larger diameter pipe (more bandwidth) from your distributor (ISP). As the ISP can only provide a limited amount of bandwidth, the more bandwidth you obtain, the higher the cost, but the more information you are able to receive in a given amount of time.
When a user desired to access a particular web site, a Uniform Resource Locator (URL) provides the unique address of the desired site: www.BrettTrout.com is an example of a URL. Any URL is associated with a unique number string, which the computers of the Internet use to route information from the site to your ISP and onto your particular computer. When you request information from a web site, the information is not transmitted together, but rather is divided into packets. These packets travel by very different, but highly efficient routes. As the information arrives at your ISP, the information is recompiled into its original format for your viewing.
Users often engage search engines to find the URL of a desired web site. Nearly every web site uses normally invisible metatags,
or words describing the content on the web site. Search engines, using powerful servers, employ spiders,
which are sophisticated search programs, to obtain a website‘s text and metatag information. The search engines then use their powerful servers to compile and index the information they gathered into a database. Users may then locate the URL of the desired web site using the search engine and descriptive search terms. Meta-search engines are also available that use a Boolean query to search several search engines at once. With such meta-search engines, a user may engage very narrow search queries to obtain a desired URL.
Who, What, Where, How, and Why
Today, the average Internet user is a professional white male United States citizen over thirty-years-old who has earned a college degree and makes an average income of $63,000. Tomorrow, that profile will be much more diverse. While previously skyrocketing, United States Internet usage is beginning to level off while Internet usage around the world is burgeoning. With the inclusion of these new, international users, Internet content will continue to diversify, and access will continue to become available to more and more types of users. More than half of United States businesses offer products or services online, and the number is growing daily. The world-wide marketplace is blossoming, too.
People use the Internet for countless activities from pleasant conversation to multi-million dollar sales, and we discover new uses every day. Individuals use the Internet for research, communication, file transfer, entertainment, and eCommerce. Businesses also use the Internet for purchasing, logistical planning, ordering, cycle time planning, communication, training, and sales and marketing. As the power and acceptance of the Internet continues to grow, people and businesses will continue to discover, and then demand, more and more from this limitless technology.
While the United States currently leads the world in Internet usage and development, the trend of America’s dominance is changing. Even now, Japan is better wired
than the United States, providing greater bandwidth much more economically. Although the United States pioneered the technology underlying the Internet, most American municipalities fail to understand that the Internet has still realized only a small fraction of its potential. By failing to adapt the necessary fiber optic infrastructure, most American cities will be unprepared for the demands of the Internet materializing over the next decade. As a result, countries such as Japan and China will far outpace the United States in Internet growth. International growth will quickly change the face of the Internet from the anglocentric facade we currently see to one with a worldwide flavor.
Currently generating trillions of dollars in sales, the Internet continues to drive businesses all over the world to offer faster, more economical, and better products and services. On demand video entertainment and VOIP (voice over Internet protocol telephone service) will soon become commonplace. Portable telephones will continue to transform from mere telephony devices to data centers for the receipt and transfer of any type of data available online. Far from leveling off, new uses for the Internet will continue to grow over the next decade, generating new demand for products, technology, and information consumers never knew to expect: the horizon for internet usage is limitless.
The main factors behind the Internet‘s popularity are its low cost, the large amount of information available, and the high speed of information transfer. Consumer Internet access continues to increase in speed and efficiency. Countries all over the world are building infrastructure to accommodate higher bandwidth demanded by consumers. As worldwide networks adapt to the Web’s increased speed and efficiency, more net hosts and providers will be drawn to the Internet. More hosts will translate into more websites, which translates to even more information and more options available to users. More information and options will draw more users, which will draw even more hosts and providers.
Navigating the Internet
In my law practice, I have found the following web sites to be of particular value:
Legal Research
General Law
http://www.ih2000.net/ira/legal.html
http://www.findlaw.com
http://www.legalengine.com
http://www.lawsource.com/also
http://www.washlaw.edu
http://www.catalaw.com
Free Case Law
http://www.lexisone.com
Internet Law
http://www.lawguru.com/ilawlib/
http://www.gigalaw.com/
Overview of Particular Areas of the Law
http://www.law.cornell.edu/topics/topic2.html#intellectualproperty
Find a Lawyer
http://www.martindale.com
Supreme Court cases
http://www.findlaw.com/casecode/supreme.html
Court Websites
http://www.ncsconline.org/D_KIS/info_court_web_sites.html
Code of Federal Regulations
http://www.findlaw.com/casecode/cfr.html
Westlaw
http://www.westlaw.com
Lexis-Nexis
http://www.lexis-nexis.com
Federal Law
http://www.findlaw.com/casecode/uscodes/
State Law
http://www.findlaw.com/casecode/
Secretaries of State
http://www.nass.org/sos/sos.html
2.Search Engines
http://www.google.com
Clusty
http://www.clusty.com
3.General Research
American Bar Association
http://www.abanet.org
Verizon Yellow Pages
http://www.dexonline.com
Infospace
http://www.infospace.com
Maps
http://mapquest.com
Old Webpages
http://www.waybackmachine.org
Free Software
http://www.downloads.com
The Future of the Internet
The following is a list of Internet issues and my projection of trends:
Internet Security. Information is the internet’s stock, trade, and most valuable commodity. Because of information’s enormous value, there will always be those trying to steal your information and sell the knowledge to someone else. While not closing the gap entirely, systems technology and courts will make gains on the hackers and disgruntled trying to steal your data. While the overall cost of security will increase, given the rate at which companies collect and store data, the per byte
price of protection will continue to fall rapidly.
Data Management. No longer will you see companies with one hundred 5.25 inch floppy disks stuck in a box in the basement. Companies always knew there would be a day when they would have to spring clean their information systems, and that day is today. The Federal Rules of Civil Procedure now mandate that you be able to access ALL of your electronically stored information across ALL of your systems and storage devices. Companies are charging their own electronic document management committees with the task of destroying corrupted, outdated, and inaccessible electronic data BEFORE they get sued and have to figure out a way to read information they assumed was unnecessary. System-wide change will be difficult at first, but best practices will emerge, offering benefits far beyond courtroom cost savings and efficiencies.
Privacy. More industry specific laws will arise as well as laws governing the transfer of information between industries. Consumers will select tiers
of information they wish to provide companies, which must develop systems for handling many different types of information under many different privacy parameters.
Spending. Online consumer and business spending will continue to increase with the rate of increase slowing only somewhat. The internet will see over a billion new consumers by 2018 with much of the new spending directed toward technology needed for faster, more mobile access to the internet.
Bandwidth. While businesses and consumers will pay more for bandwidth, they will see significant increases in bandwidth in return for minor increases in cost.
Censorship. Parochial and end-user implemented censorship will continue; there will be no world-wide internet-wide mandate on censorship, but corporate or entity specific censorship will increase.
Spam. Spam will become increasingly aggressive in an effort to overcome existing filters. Congress has chosen sides on this issue and not on the side of consumers. Accordingly, spam will continue to increase at a rate far outpacing legitimate email.
Intellectual property. Business method and technology patent applications will continue to give the Patent Office fits. The number of applications will far outpace the hiring of new patent examiners, pushing the backlog of patent applications to over one million. Businesses will increase their trademark and patent filings, ramping up enforcement and licensing efforts to maximize revenue streams. The Supreme Court has stepped in to limit the ability of small inventors to hold large corporations hostage, but there are still some industry defining intellectual property rulings to come.
Advertising. Advertising will merge with entertainment, becoming less blatant, but finding its way into nearly every aspect of our daily lives.
Taxation. There will be no taxation of internet transactions in the foreseeable future.
Internet Governance. There will be no international internet egovernance in the foreseeable future.
EGovernment. Governments will continue to leverage technology in the delivery of services, but will continue to lag private industry by several years in terms of usability and efficiency.
Mobile Usage. Mobile access to the internet will be the primary area of expansion over the next several years. Mobile access technology will continue to get smaller, faster and less expensive and will introduce both consumers and businesses to uses we will not know how we ever got along without.
Summary
Users will continue to flock to the internet, both demanding and creating new content. Delivery of entertainment online will eclipse any other single method of delivery. Mobile internet access will shift from a luxury to a necessity. Smaller, cheaper devices will make more users mobile, driving businesses to shift focus toward this highly desirable, yet largely untapped market.
Current online businesses will expand their non-English speaking offerings as non-English speaking countries increase their presence; data management will be big business, creating entire industries around very narrow areas of data wrangling.
While the internet expands in these broad, general areas, individual users will seek to customize their online experience. Nimble companies will secure huge areas of the market by offering users unique experiences and suggesting experiences based upon demographics and individual history. This customization will exploit the previously untapped long tail
of the internet, creating more and more varied opportunities for users and businesses.
First adopters and viral marketing will become more important to companies seeking to launch more offerings, more quickly, for less money. Savvy consumers will, for the most part, welcome well-tailored suggestions, but will be wary of companies attempting to supplant freewill with the will of the corporation. The most valuable consumers will never surrender new experiences and the most current information just to save a little time. Businesses would, therefore, be well-advised to always allow a sufficient amount of user input into online experiences to ensure that the internet servant never becomes the master.
Chapter Two
Business Blog Basics—Get Your Words Out
Discussing the legal aspects of blogging without going into some detail about blogging itself is putting the cart a little before the horse. Bloggers and blog readers play by a different set of rules. They have their own set of ethics and their own ways to punish bad behavior. Asking strangers to link to your blog is considered bad form. And stealing content from another blog leads not to an outcry, but to a lack of links, relegating the content stealer to the vast wasteland of un-findable online content. While it is important to understand and follow the law when it comes to blogging, it is even more important to understand the unwritten rules of blogging. Understanding the law can help you win a case in court. Understanding and following the unwritten rules can help keep you out of court in the first place.
What is A Blog?
A blog is a periodically updated website. Unlike a typical website, a blog lists updates in blocks, in reverse chronological order. The word blog has been around only since