E-Business Legal Handbook
, by Michael Rustad & Cyrus Daftary (Aspen Law & Business, 2003 ed.), xli, 826 pages.
Ben Franklin's Web Site: Privacy and Curiosity from Plymouth Rock to the Internet, by Robert Ellis Smith (Privacy Journal, 2000), 407 pages.
Digital Copyright, by Jessica Litman (Prometheus Books, 2001), 208 pages.
New technologies and new paradigms of commerce often outrun the law in the short term, but the law catches up. Catching up involves a common law reconsideration of classic legal constructs and legislative adjustments. The net result is a new branch of law with a more or less settled framework allowing for further growth of the new technology and new commercial paradigm. In retrospect, it appears that development of the new framework was inevitable. Often the sense of inevitability can be reinforced by studying precursors of current conflicts. Three diverse books reviewed here, taken together, show these trends for Internet-related businesses and social institutions.
In E-Business Legal Handbook, Michael Rustad and Cyrus Daftary describe the new legal framework governing electronic commerce, including elements of identity maintenance, Internet security, intellectual property and tort liability in cyberspace, the law of e-commerce transactions, exposure to lawsuits in distant forums, risk management and e-mail/Internet usage policies. Living up to its title as "handbook," this comprehensive volume provides preventive law pointers, how-to directories of procedure, checklists, sample contract clauses, a sample business plan and a bibliography of Internet resources for lawyers. Technical terms of computers and telecommunications are explained concisely, making the subjects accessible to all attorneys.
The authors' advice is backed by a clear explanation of how old legal doctrines have been adapted to new ones. For example, the intellectual property chapter sets forth the basics of copyright, trademark, patent, and trade secret laws.1 This background establishes an understanding of modern decisions and statutory developments in such areas as peer-to-peer network sharing, immunity for Internet service providers, keys linking, domain name protections, business method patents and content licensing for Internet usage. Similarly, the book shows how traditional tort principles have been used to derive today's law regarding cyber-trespass, virus resistance, cyberstalking, spamming and cyberpiracy.2
Development of new legal frameworks is not limited to courts and legislatures. Industry (and Internet community) standards also play a role. These non-governmental standards include the ANSI X12 standards for electronic data interchange (EDI) developed by the American National Standards Institute3 and the United Nations Standards on Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT).4 The significance of each of these standards to the world of e-business is clearly discussed.5
In addition, the book describes how individual retailers of goods and services have staked out competing modes of business to consumer (B2C) communications including Priceline, e-Bay, Bidder's Edge, and the like and considers how these have been reconciled with the Uniform Commercial Code (UCC), Magnuson-Moss Act, children protection laws, Federal Trade Commission telemarketing sales rules, European Union Distance Selling and Financial Service directives and privacy law.6 Another effort to specifically regulate such commerce, however, has stalled. This is the Uniform Computer Information Transactions Act (UCITA)7, the strengths and weaknesses of which are well displayed in the book.8 UCITA is a special form of UCC Articles 2 and 2A (sales and leases, respectively) intended to apply to licensing the use of information products. Promulgated by the National Conference of Commissioners on Uniform State Laws in 1999, it has only been adopted in Virginia and Maryland.9 Under UCITA, licensors of information products have substantially greater rights vis-à-vis licensees than sellers and lessors of tangible goods have with respect to buyers and lessees under UCC Articles 2 and 2A.10
The authors are well qualified. Michael Rustad is a professor and director of the Suffolk University Law School High Technology Law Program, while Cyrus Daftary is director of Tax Technology at Price Waterhouse Coopers. They have put together a worthwhile handbook for anyone interested in the laws governing American and foreign electronic commerce.
Ben Franklin's Web Site takes a reader away from the frontiers of new technology back to colonial times when a quest for privacy was set against watchfulness of Crown and clergy and a popular taste for gossip. Social norms put privacy under constant attack. Early postal services were insecure,11 clergy would snoop for signs of immoral lifestyle12 and fellow travelers made rude inquiries.13 As Franklin said in his Poor Richard's Almanack, "Three may keep a secret, if two of them are dead."14 We learn that John Adams not only claimed a right not to respond to inquiries concerning his personal life but to conceal it by dissimulation.15 This and many other anecdotes reinforce a case that privacy concepts animated the Bill of Rights16 (original intent constructionists should take note) and added to the allure of the frontier wilderness.
From these beginnings, the book traces the on-going tension between Americans' curiosity and desire for privacy. Congress adopted Franklin's early advice to assure confidentiality of the mails.17 Nevertheless, privacy for communications soon faced new pressures from technological innovation posed by the telegraph and telephone. Strikingly, challenges to early telegraphy and telephony were similar to those now being faced in a later Internet age.18 Fast forward to the 1890 Harvard Law Review article of Brandeis and Warren and its passionate declaration of a right to be let alone by a scandal mongering press.19 Thereafter, state privacy statutes developed.20 The 20th Century added laws dealing with wiretaps (apart from the party line telephone). Telephone companies and then radio companies joined privacy-sensitive individuals to enact anti-interception statutes.21 However, wiretapping had a resurgence in crime-control legislation and executive orders of the 1960s and 1970s.22 Nixonian overreaching turned the tide back towards privacy sensibility23 but law enforcement interests were nevertheless advanced.24 Similarly, social security identifier usage for collateral purposes25 waxed and waned in popularity.26
This brings us to modern times and a fresh look at privacy with a European Union led thrust in its Data Privacy Directive,27 now of course offset by the security measures of the U.S.A. Patriot Act.28 The book shows how the Internet has multiplied all the traditional dangers to privacy.29 It concludes with checklists for corporations and individuals of steps for privacy protection.30
Roger Ellis Smith has published the Privacy Journal for some 20 years and has always been ahead of the curve on privacy issues. This slim volume published well before September 11, 2001, presents a historical perspective that informs the present and the future of privacy on the Internet, showing that the desire for privacy grows not only as a revolution of rising expectations when privacy interests are advancing but also asserts itself when privacy is being subordinated to public safety concerns.
Digital Copyright by Professor Jessica Litman of Wayne State University Law School tracks the development of copyright law and documents how it provided an hospitable environment for development of the Internet and how it has been refined to further accommodate the new technology. Indeed, in both the distant past and the Internet era, a compliant Congress often has modified copyright law to implement accords worked out by affected business interests in connection with piano rolls, jukeboxes, cable TV, videotape, digital audio and software making tools.31 But that mechanism of private bargain and public ratification will not be practical in the business to consumer realm involving hundreds of millions of end users and an international dimension.
The Digital Millennium Copyright Act of 199832 (DMCA) resulted from such a bargaining process carried out with few and inadequate representatives of consumer interests at the bargaining table.33 A belated effort by the House Commerce Committee to right the balance was too little, too late. DMCA provides civil and criminal remedies against making and distributing, and even talking or writing, in public about tools to circumvent copyright proprietors' controls on access to copyrighted content. The balances of the Copyright Act34 itself as to limits on copyright and fair use are circumvented by DMCA. The effect of DMCA has been, predictably, a climate of populist evasion, not seen since the Volstead Act35 banned liquor trafficking. Litman's polemical, albeit correct, take on the situation is this:
Nor was the record companies' moral position appealing. [Their] insistence that unless musicians were fairly paid, there would be no music rang particularly hollow with fans given the industry's years of demonstrating that when musicians are not fairly paid, they continue to play, write songs, perform at concerts, and cut records. Record companies had collected the lion's share of record revenues for years, arguing that their part of the process of creating and selling records was the expensive part. They controlled the recording studios, record pressing and CD burning plants, and the distribution network…. The Internet makes much of that infrastructure optional. Yet not one major label proposed reallocating the share of revenue as between the record company and the artist…. Not one… has announced that the money it won't spend burning, packaging, and shipping CDs would be shared with consumers in the form of lower prices. Instead, [the industry says] that when it did make its catalog available online, the consumer should pay the same $17.99 for an encrypted, downloaded, digital file (protected from copying, sharing, lending or resale) that she pays for an unencrypted, loanable, copyable, resalable CD. No wonder consumers aren't going along.36
The author also calls for an outside-the-box approach to recognize the opportunities afforded by networked digital technology.
The most exciting possibilities offered by networked digital technology aren't its potential to allow the instant distribution of books, music, and movies, but, rather, its capacity to generate new classes of unbooks, unmusic, and unmovies. If we try to restructure this market to impose the pattern that has worked so well for the purveyors of current books, music, and movies, we risk driving the new unbooks out. That would be a terrible loss.37
The problems and opportunities of the Internet Era are not the province of new specialists. Lawyering in this era is open to traditional practitioners of all ages and backgrounds. It takes some study, historical perspective and a tool chest of references, a good beginning of which is provided by the Rustad-Daftary, Ellis Smith and Litman books.
1. See generally, Michael Rustad & Cyrus Daftary, E-Business Legal Handbook §§ 4.01 to 4.06 (2003).[back]
2. See id. at §§ 5.01 to 5.11.[back]
3. Id. at 6-11. A similar standard of the International Standards Organization (ISO) was ultimately adopted by the European Union in its Guidelines on Trade Data Interchange. Id. at 6-12.[back]
4. Id. at 6-12.[back]
5. See Rustad, supra note 1, at § 6.02.[back]
6. See generally, id. at §§ 6.02-6.05.[back]
7. Unif. Computer Info. Transactions Act (1999).[back]
8. See Rustad, supra note 1, at § 6.05.[back]
9. Va. Code Ann. §§ 59.1-501.1 to 59.1-509.2; Md Code Ann. §§ 22-101 to 22-816.[back]
10. For example, compare UCITA pt. 8 with UCC ch. 2, pt. 7 and ch. 2A, pt. 5.[back]
11. See Robert Ellis Smith, Ben Franklin's Web Site 23-25 (2000).[back]
12. See id. at 8-10.[back]
13. See id. at 34-36.[back]
14. Benjamin Franklin, Poor Richard's Almanac (1735), July, quoted in Bartlett's Familiar Quotations 309 (16th ed. 1992).[back]
15. Ellis Smith, supra note 11, at 29.[back]
16. See id. at 46-47.[back]
17. Id. at 50.[back]
18. See e.g., id. at 66-72.[back]
19. Samuel D. Warren and Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890).[back]
20. See Ellis Smith, supra note 11, at 139-40.[back]
21. See id. at 157-58; 176-78.[back]
22. See id. at 179-82.[back]
23. See id. at 180, 182, 184, 187-88.[back]
24. Berger v. New York, 388 U.S. 41 (1967) and Katz v. United States, 389 U.S. 347 (1967) invalidated over-broad authorizations of wiretap scope and sent shock waves through law enforcement communities. The 1968 Federal Wiretap Law, Pub. L. No. 90-351, 82 Stat. 212-25 (codified as amended at 18 U.S.C. § 2510, Title III of the Omnibus Crime Control and Safe Streets Act of 1968) restored some tools to law enforcement. The Foreign Intelligence Surveillance Act of 1978, 50 U.S.C. §§ 1801-1862, established a panel of seven judges to approve applications for foreign intelligence eavesdropping. President Carter issued an executive order forbidding electronic surveillance within the United States. The Electronic Communications Privacy Act of 1986, Pub. L. No. 99-508, 100 Stat. 1848-73 (amending 18 U.S.C. 2510), extended traditional protection for voice messages over telephone lines to data streams as well as voice messages transmitted via landlines, cellular phones, e-mail and pagers. The Communications Assistance for Law Enforcement Act, Pub. L. 103-414, Title I, 108 Stat. 4279 (1994) (codified as amended at 47 U.S.C. §§