E-TIPS

© 2002, Deeth Williams Wall LLP. All Rights Reserved. By: Amy-Lynne Williams The growth of e-commerce has drawn particular attention to consumer protection issues over the Internet. To assist provinces in drafting new statutes to deal with these issues, the Internet Sales Contract Harmonization Template ("template") was approved in 2001 by federal, provincial and territorial ministers responsible for consumer affairs.

© 2002, Deeth Williams Wall LLP. All Rights Reserved. By: Amy-Lynne Williams It is a rare company these days that does not allow some form of access to the Internet to their employees.

On December 10, 2002, the High Court of Australia issued its decision in Dow Jones v. Gutnick, affirming the jurisdiction of the courts in the Australian State of Victoria to try a suit brought by Mr. Gutnick against Dow Jones for articles published by the latter on its Internet news service alleging that Mr. Gutnick was a money-launderer and tax evader.

The UK Court of Appeal has issued its decision in Menashe Business Mercantile v. William Hill, a case involving the issue of whether an interactive gaming patent can be enforced against a server located outside the UK. The defendant had operated a gaming system available to computer owners in the UK and supplied customers with a program which allowed their computers to communicate with a host computer outside the UK via the Internet.

Recently, the United States Securities Exchange Commission ("SEC") adopted a new Rule which permits Internet Investment Advisors to register with the SEC. Prior to the new rule, investment advisors who provided advisory services over the Internet were prohibited from registering with the Commission because they did not fall within the provisions of section 203A of the Investment Advisers Act of 1940. Section 203A prohibits an advisor from registering with the Commission unless they are an advisor with a registered investment company or have more than $25 million of assets under management. As a result, Internet Investment Advisors were generally required to register with every State.

In Thompson v. Mastercard, a class action suit brought against Mastercard, Visa and related banks under the Racketeer Influenced and Corrupt Organizations Act (RICO), the U.S. Court of Appeals (5th Cir.) affirmed that it was not illegal for credit card companies and banks to process debts incurred by the plaintiffs when they bought "chips" from Internet gambling sites. The Court ruled that the plaintiffs "have not sufficiently alleged "˜the collection of unlawful debt'", and that "RICO, no matter how liberally construed, is not intended to provide a remedy to this class of plaintiff."

Finland's Supreme Court has ruled that taxi drivers must pay royalty fees if they play music in their car while transporting customers. The decision also extends to the radio. Under the ruling, taxi drivers must pay an annual copyright fee of 22 EUROS (about $35 CDN) for playing music while carrying a fare.

In a recent case brought by the U.S. Securities and Exchange Commission (SEC), the former president and CEO of Internet start-up PacketSwitch.com, Steven A. Ristau was found guilty of fraud, selling unqualified securities and tax evasion. In 1999, Mr. Ristau claimed that his company had developed wireless technology that would allow movies to be viewed up to 12 miles away. No such technology then existed. Mr. Ristau used a nearby hidden off-the-shelf wireless LAN to "demonstrate" the technology to potential investors.

Canada's Justice Minister recently introduced new legislation aimed at cracking down on child pornography and peeping Toms. This legislation responds to public uproar after a Vancouver man who was found not guilty of possessing child pornography on the grounds that his stories had "artistic merit". The law replaces the reference to "artistic merit" with language that requires a demonstration that such material serves the public good and that this public good outweighs the risk of harm. This change is aimed at making it easier to prosecute offenders and more difficult for individuals to claim that their pornography is art.

Recently, the U.S. Court of Appeals (7th Cir) considered the effect of a bankruptcy sale on a contract to provide a financial-market data service in FutureSource LLC v. Reuters Ltd. The provider, Bridge Information Services, had entered into a contract to provide data to FutureSource, but filed for bankruptcy two years later. Although Reuters purchased the bankrupt provider's assets, the right to receive royalties remained with a third party.

On December 5, 2002, the Canadian Supreme Court (SCC) allowed an appeal by the Commissioner of Patents from a decision of the Federal Court of Appeal, which had allowed the patenting of higher life forms. The Respondent had sought to patent a process for producing mice genetically altered to be "susceptible to cancer" (and thus suitable for carcinogenic studies) and the end product of the process (the mice and their offspring). The Commissioner allowed the process claims but refused the product claims; the Respondent in turn sought judicial recourse.

A resident of Fort Frances, Ontario has become the first person convicted in Canada for obscenity on the Internet. The man was fined $100,000.00 and sentenced to three years probation for posting short films on his website that violated the obscenity provisions of Canada's Criminal Code. The fine is reportedly one of the largest penalties for obscenity in Canada.

A California District Court has issued a decision aimed at preventing consumer confusion between Nissan Motor Co., Ltd. ("Nissan Motors") and Nissan Computer Corporation ("Nissan Computers"). The Court granted a preliminary injunction preventing Nissan Computers, the owners of the nissan.com and nissan.net domain names, from using those websites to display automobile-related information, commercial advertising, or web links. In addition, the Court ordered that Nissan Computers display a prominent caption identifying those sites as affiliated with Nissan Computers and not with Nissan Motors.

In an open letter to the federal government dated November 25, 2002, the Privacy Commissioner of Canada has denounced the Canadian government's "Lawful Access" proposal that would require ISPs to develop the ability to intercept, monitor and store all wireless and Internet traffic data related to a user. The data could be ordered for retention and production by law enforcement agencies. The Commissioner suggests a four-part test to analyze the appropriateness of an encroachment of state power into the privacy of Canadians is not met by the proposal.

On November 20, 2002, the New York Mercantile Exchange (NYMEX) sued Intercontinental Exchange (ICE) for alleged infringement of copyrights held by NYMEX in the settlement prices of its natural gas and light sweet crude oil futures contracts. ICE allegedly copied the prices in establishing its own derivatives contracts.

On November 27th, using the U.S. Digital Millennium Copyright Act, Wal-Mart obtained a subpoena from the U.S. District Court (Northern District of Illinois) directing fatwallet.com to disclose the identity of an anonymous user who posted Wal-Mart's Thanksgiving advertising circular. Fatwallet.com operates a web site that allows users to post and discuss information about prices and products.

A battle in a Chinese court between the Chinese titans of Internet portals recently ended in favour of SINA.COM. The Beijing No. 2 Intermediate Court found SOHU.COM liable for infringement of its competitor's copyright by copying text and graphics downloadable from SINA.COM's website for use in mobile phones on a fee-based basis. This is the first ruling by a Chinese court applying Chinese copyright law to online materials.

In the recent case Ruby v. Canada, the Supreme Court of Canada considered whether court proceedings involving national security should happen entirely in secret. The Court considered the issue of whether the in camera (s.51(2)(a)) and ex parte (s.51(3)) hearing provisions of the Privacy Act violated the Charter.

The Network Advertising Initiative (NAI), a coalition of network advertisers based in Cleveland, recently released guidelines aimed at websites that use "web bugs" or "web beacons". These "web bugs" track a user's activity on a website. A "web bug" is often used to collect profile information which is then used for advertising and marketing purposes.

The California Supreme Court has held that the DVD industry cannot sue a Texas man in California since there is no connection between the Texan's conduct and California.