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NEW MEDIA LAWYER (Release.43 - 13.03.2000)

1.0 NEW MEDIA LEGAL NEWS + COMMENTARY

1.1 LEGAL NEWS IN BRIEF

  • The BBC has obtained a High Court injunction blocking the attempts of a UK resident to sell the domain names bbc1.com and bbc2.com to third parties and is also seeking to have ownership of the names transferred to the BBC.

  • Monday 13th March saw the first publication of a new novella - "Riding the Bullet" - by the author Stephen King that initially will only be available in a downloadable format from the Internet. King's publishers Simon & Schuster believe this will be the most popular electronic book published to-date. Downloads will cost US2.50 and the e-book will also be available in a Palm Pilot-compatible version.
    www.simonsays.com

  • A US federal court in Alabama has ruled that when an Alabama minor made an online transaction to buy beer from an Illinois corporation, the sale took place in Illinois and constituted insufficient contact to establish personal jurisdiction over the defendant. The case raised the question of whether personal jurisdiction may be asserted by a federal court sitting in diversity over a non-resident defendant in an action arising from a sale made in another state solely in response to an order placed by an in-state resident.

  • The Estee Lauder cosmetics company has won an action in the Hamburg District Court in Germany to stop Excite Inc and iBeauty from using certain trademarks as meta-tag keywords to trigger banner advertising on web sites. The court decided the use of such Estee Lauder trademarks as Clinique amounted to unfair competition under German law. Estee Lauder has filed similar suits against Excite and iBeauty in France and in the US federal court in New York. Rulings are in these cases are expected later this year.

  • McGraw-Hill has filed a US federal lawsuit in Pittsburgh against BuildingTeam.com, a construction industry web site principally owned by Cahners Business Information, a division of Reed Elsevier. The complaint alleges a Cahners employee obtained confidential information relating to pricing and web site data relating to McGraw-Hill's own e-business sites, including the rival Construction.com service, from an McGraw-Hill employee.

  • iCraveTV.com, the North American Internet operator that was relaying the signals of US and Canadian television channels from its web site, has agreed to close down in return for the withdrawal of lawsuits against the company. The legal threats against the company came to a head last month when a federal judge in Pittsburgh issued a preliminary injunction against iCrave barring it from distributing TV signals after the Motion Picture Association of America, US professional football and basketball leagues and a group of Canadian broadcasters sued iCrave for alleged copyright infringement.

  • At the end of last month the UK's Independent Television Commission published its long awaited consultation paper on the regulation of interactive digital television services. Although the paper says a "lighter touch to the regulation of interactive services is essential" there have been complaints from the industry that the ITC is taking too long to resolve the outstanding regulatory issues surrounding the boundaries - for example, should programmes contain links to commercial web sites - between commercialism and content.
    www.itc.org.uk

  • The New York office of the American Civil Liberties Union (ACLU) has hosted a meeting of US Internet free speech groups and lawyers concerned about the rising number of "John Doe" lawsuits being filed by commercial organisations seeking to discover the identity of individuals who have criticised their operations or products in anonymous postings to Internet bulletin boards. What worries the ACLU is message board operators frequently reveal the identities of the individuals automatically upon the receipt of a subpoena - and often before the John Doe in question knows there is a legal problem or has an opportunity to obtain legal assistance.

    According to the ACLU, message board postings are protected by the First Amendment constitutional right to free speech whereas the view of corporate lawyers is that the First Amendment does not give people an unbridled right to anonymously defame companies and the activities of their executives. The ACLU estimates there were over 30 John Doe lawsuits in US courts last year.

  • Expedia has settled a lawsuit filed by Cahners Travel, a US subsidiary of Reed Elsevier, alleging breach of contract and unfair competition over a failed joint venture to develop a hotel and travel directories web site using data provided by Cahners. The full terms of the settlement have not been disclosed however neither company has admitted any wrongdoing.

    1.2 ONLINE BOOKMAKERS LOSE TEST CASE
    The Victor Chandler bookmaking group has failed in its attempt to use an apparent loophole in Section 9(1)(b) of the Betting & Gaming Duties Act 1981 to support Internet and teletext advertising by offshore companies, after the Court of Appeal overturned an earlier ruling by the High Court.

    The Vice-Chancellor Sir Richard Scott said that a bookmaker located abroad, who obtained custom from within the UK by broadcasting advertisements on teletext, committed an offence because it was "an advertisement or other document" that was "issued, circulated or distributed" for the purposes of Section 9(1)(b). This reversed the last summer's ruling by Mr Justice Lightman that the definition of an "advertisement" was limited to advertisements in "documentary form" and thus could not apply to teletext or any later technologies, such as the Internet.

    At first instance the court took the view that because the Section 9(1)(b) measure first saw the light of legislative day in the Finance Act 1952, it could never have been intended to cover the electronic dissemination of information. However the Court of Appeal, in an unanimous decision, said that when you looked at the "mischief" the measure was intended to tackle - to protect gaming taxes and protect domestic bookmakers from unfair offshore competition - it was clear the legislation was intended to take account of any changes in technology.
    Ref: Victor Chandler International -v- Commissioners of Customs & Excise & Another, Court of Appeal, judgment 29th February 2000.

  • Littlewoods, best known for its football pools business, is expected to announce details later this week of a new strategic alliance with British Telecommunications to create a new Internet-based gaming business.

    1.3 INTERNET MONITORING BILL GETS LUKEWARM REACTION
    Last week's second reading of the UK government's Regulation of Investigatory Powers Bill, which will allow security and law enforcement agencies to decrypt encoded e-mail messages, received a less-than enthusiastic response from the ISP industry who will be obliged to ensure they have the capacity to intercept and monitor e-mail traffic.

    What concerns the ISPs is who will pay for this interception technology - the Home Office or the ISPs? The civil liberties lawyers group Justice has also warned that in its present form the Bill needs amending on several points to comply with the Human Rights Act. And there remains a nagging fear that the measure will prove merely another headache for the legitimate users of encryption in e-commerce applications, while the criminals and terrorists the measure is aimed at will continue with their unlawful activities.

    2.0 NEW MEDIA LAWYERS, DEALS + INDUSTRY NEWS

    2.1 PROFESSIONAL NEWS IN BRIEF

  • Gateley Wareing has launched an e-services unit to handle Internet-related legal issues, including data protection, domain name disputes and online contracting. The team is headed by senior associate Andrew Evans

  • Field Fisher Waterhouse is in the process of developing a European network of law firms - known as Ecomlex - that can co-operate on e-commerce work. Field Fisher IT partner Nigel Wildish says the idea is to provide e-commerce clients operating on a pan-European basis with local legal advice in individual countries. Harper Macleod in Scotland and Advokatfirman Fylgia in Sweden are two of the first firms to have joined Ecomlex.

  • Dibb Lupton Alsop is creating a one-stop shop service for e-commerce clients called DLA.Net that brings together specialists from different departments within the firm - including IT, IP, corporate tax and venture capital - so that it can help both new dot-com ventures launch their services and more established business move on to the Internet.

  • The Monitor Press has published the second edition of "The Internet @nd IP" special report by Jonathan Cornthwaite, the head of IP and IT law at Wedlake Bell. The report costs £99.00 for UK sales and US$218 for overseas sales.

    2.2 LATEST DEALS

  • Linklaters & Alliance is handling both the London Stock Exchange and New York NASDAQ IPOs for Lastminute.com, one of the most highly rated Internet companies to be floated to-date. The Linklaters team is led by corporate partners Bill Hobbes and Bridgid Retoul. Bird & Bird, Lastminute's original lawyers, remain the company's preferred lawyers for other work. Freshfields and Davis Polk are representing investment bankers Morgan Stanley interests in the float in, respectively, the UK and the United States.

  • S J Berwin & Co acted as legal advisers to the e-commerce automotive company OneSwoop.com from the pre-financing stage through to the establishment of first round funding and latest Euro round of financing. The firm's team, which includes partners Graham White, Martin Bowen, Tom Usher and Andrew Shindler, also worked on EU regulatory issues and contractual negotiations with OneSwoop.com's commercial partners.

  • Paisner & Co advised Beenz.com on its joint venture with the Italian portal Kataweb on the launch of a new web-based marketing operation in Italy. The international team was coordinated by Eduardo Ustaran of Paisner & Co. Kataweb was advised by Studio Ripa di Meana and Latham & Watkins.

    2.3 EPOCH RELAUNCHES DIRECT LAW
    Epoch Software, the company behind the Freeserve Legal Desktop service, has relaunched its DirectLaw system, which is intended to provide High Street solicitors practices with an out-of-the-box solution to developing their own legal e-business services.

    DirectLaw was originally launched in the spring of 1998 when it encountered a less-than-overwhelming response due to its relatively high price and the fact it was clearly ahead of its time. Epoch subsequently put the project on the back-burner to concentrate on the Legal Desktop service.

    In its new (and much cheaper) guise, DirectLaw provides the framework, including the security, document downloading and online credit card transaction/e-commerce facilities, to support High Street firms wanting to offer their own versions of the Legal Desktop service. Firms can sell downloads of both their own template documents as well as those developed by Epoch's own team of lawyers and legal draftsmen. To-date 38 firms have already signed up for the service. New Media Lawyer understands these include the practice run by Robert Sayer, the current Law Society president.
    www.directlaw.co.uk

    2.4 THREE MORE FIRMS SIGN UP WITH FIRSTLAW
    Three more law firms - Osborne Clarke, the e-business unit of Laytons and Thomas Eggar Church Adams - have signed up to become channels for the FirstLAW Internet-only law firm, which launched in February of this year. In addition to Davies Arnold Cooper, the first firm to join the service, the Insider understands a number of other practices are also in negotiation with FirstLAW.

    To-date, the projects already taken on by FirstLAW firms include: providing strategic legal advice to an Internet start-up, a rights issue, routine conveyancing work, an acquisition and refurbishment deal on an office block and a complex medical negligence claim.
    www.firstlaw.co.uk

    2.5 NEW DATA PROTECTION SERVICE
    Paisner & Co has launched a one stop package to help businesses trading online comply with the Data Protection Act 1998 rules which came into force on 1st March. Called ComplyToday, the package comprises five stand-alone modules that can be purchased online for £100 (+VAT) each.
    www.complytoday.com

    2.6 FIRST ISSUE OF ITALIAN CYBERLAW JOURNAL OUT NOW
    The first issue of "Ciberspazio e Diritto - Cyberspace and Law" (January - March 2000), a new international scientific review in hard copy format, in Italian and English, about the Internet and legal practice has just been published. The journal will be published four times a year by Mucchi Editore, Via Emilia Est, 1527 - 41100 Modena. The cost of annual subscription is 70.000 Italian liras for Italy (Euro 36,15) and 90.000 (Euro 46,48) Italian liras for other countries, postage included. Orders can be placed with bookshops, or directly with Mucchi Editore s.r.l. P.O. Box 329 Centro, I-41100 Modena (Italy), or by the form on the web site.
    www.ciberspazioediritto.com

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