IT and Internet Law: The Electronic Communications Act 2000 - Coursework Example

IT and Internet Law [Type of Paper] [Date] [Number of Words] [Name of the Student] [Name of the University] IT and Internet Law Electronic commerce is a major feature of the globalised world, with application in many areas. Several international conventions, treaties, and trade practices govern the issues relating to electronic commerce. In the UK, the government enacted the Electronic Communications Act 2000,1 which was the first piece of legislation to promote electronic commerce in the country.2 Task A The proliferation of the Internet has enabled companies to reach a wide range of consumers. The Internet constitutes a new platform for business expansion. The use of similar names in websites results in confusion among consumers. Consequently, the use of similar names is held to be trademark infringement.3 Section 21 of the Trademarks Act 1994 provides remedies against trade mark infringement. Parties can initiate legal action on the basis of threats of trademark infringement. In several cases, aggrieved parties had invoked this section.4 In our problem, the client commenced a new search engine, namely Metro Search. He had the site registered with the domain name of www.metrosearch.com. He is worried about the objections that may be raised by other firms with the same domain name. The principal objective of a search engine is to provide searchers of the Internet with pertinent results relating to their explorations. Every search engine utilises a specific ranking system, in order to determine the relevance of web pages to the search of the user.5 A unique device, termed a spider, is present in every search engine. These spiders peruse web pages and transfer themselves to other web pages by following the hyperlinks to those pages. These Webpages are incorporated in an index, and the search engine goes through the index, in order to provide the nearest match to a query. Some of the techniques adopted by spiders are to submit a URL link, a paid Inclusion Program or another webpage’s link. The number of times that a web page is to be spidered is determined by the search engine.6 Search engines are widely used to access information available on the vast multitude of web pages. They provide the results of search strings entered in the internet browser, which consist of web pages on which the required content exists. However, search engines merely provide third party information, over which they have scant control, to the users. Search engines cannot edit this information even if it is unlawful or wrong; and they cannot block the content.7 The search engines merely provide the title and description of the hyperlink of the website; hence, they are not responsible for any unlawful content on a website. Therefore, this situation makes it clear that a caching regime, in contrast to a hosting regime, is to be implemented. Thus, in cases of defamation, trademark infringement, or unlawful publication of personal data, the hosting regime will be held liable.8 The third party information provided by the search engines could possibly result in the infringement of copyright. It has been widely contended that search engines should block the source of wrong information. This is because search engines provide all the hyperlinks of the websites that contain information related to a search string. Therefore, search engines are under an obligation to block or remove such information. The source of information is safe until the search engine provides information about it, and the user cannot access the information, until and unless the search engine provides the information.9 The statements made by a search engine, regarding its operations and services have considerable bearing on determining its responsibility for having provided information regarding unlawful references to the users. The objectives of a search engine determine the extent of its liability and its obligation to remove information about unlawful sources. Moreover, the unlawful distribution of information by the search engines causes damage to the copyright holders.10 It is reasonable to render search engines that promote the dissemination of unlawful information, liable for the consequent damage caused. The search engine has a duty of care, in respect of the activities of its selection intermediaries. A search engine is held to be liable to a much greater extent, if its selection intermediaries profit by distributing unlawful references. On the whole, selection intermediaries provide legitimate services. However, in some instances, the selection intermediaries engage in activities that have been deemed to be unambiguously illegal activities.11 Keywords can be registered as trademarks. There are several cases relating to the infringement of trademarked keywords. Trademark laws are territorial, while the Internet is not territorial in nature, as it does not have geographical boundaries.12 There are a several cases against Google, on different grounds, like trademark infringement, unfair competition, false advertising, and dilution for referencing brand owner’s trademarks. In Perfect 10 Inc v Google, the plaintiff beseeched the court to prevent Google from distributing thumbnails of its images in Google Image Search service. The court held that the thumbnails infringed trademark of the plaintiff.13 In Louis Vuitton Malletier (LVMH) v Google France, the ECJ held that Google was not liable for allowing online bidding for advertisers of trademarked brands.14 Google had been sued for trademark infringement, as it permitted advertisers to bid on trademarked brands. The ECJ stated that advertisers were under a duty to declare that they were not associated with the trademark holder. However, Google was held to be entitled to permit advertisers to select keywords as ad words, under the provisions of the EC laws. 15 The European Data Protection Supervisor (EDPS) had conducted an opinion poll on the proposal for a Council Framework Decision on 27 April 2007. This survey related to the protection of personal data used by the police and judiciary in criminal matters. This third opinion was in response to the recommendations made by the German Presidency on 13 April 2007. According to the EDPS, the revised text was not up to the expectations and the revised wording was patently ineffective.16 The use of personal data in marketing has to comply with the Directive on Data Protection and Electronic Privacy.17 The information provided to a social network service (SNS) by its members, results in their grouping by segmented marketing, which then forwards a specific class of advertisements to them. The processing of personal data by a SNS should comply with articles 12 and 14 of the Data Protection Directive.18 In addition, any individual should be able to exercise his rights of deletion, correction and access. Every SNS should have a complaint handling webpage, and its hyperlink should be prominently displayed on the homepage. Personal data has to be protected, and article 17 of the Data Protection Directive makes it obligatory for the controller to employ suitable measures, in this regard. Some of these measures could be authentication and access control systems.19 In general, the trademark law is based on the principle that there should be concentration on a particular market for specifying the location of a website. The accessibility of the latter from anyplace is insufficient.20 In phone4u.co.uk, the claimants registered a graphical trademark. The Court of Appeal examined the extent to which this trademark could be relied upon. It found that there was passing off, as the domain name was deceptive.21 In order to determine deception, the court considers whether emails had been misdirected.22 In Ritz Casino, the High Court held that the use of a trademark for similar services constituted passing off.23 In Tesco v Elogicom Ltd, the defendant hosted websites bearing the name tesco, which could result in the belief that these websites belonged to the plaintiff. The court held that the defendant had infringed trademark.24 The first domain name case was of 1996, which was undefended. The principal case, in this area was that of One in Million. In this case, the Court of Appeal held that the mere registration of domain name could render that name an instrument of fraud.25 In Citigroup v GPM, the judge stated that the possibility of confusion could result in a domain name being actionable passing off. This passing off had taken place 8 years before, and the registrant had not actively used it, since then.26 In Pitman Training Limited and PTC Oxford Ltd v Nominet UK Ltd and Pearson Professional Ltd, the court ruled that the domain name was to be allotted to Pearsons plc, as the latter had registered this name, first, with Nominet.27 The case law discussed above, indicates that the UK courts have decided cases in favour of the domain name holders who had first registered their websites. Since there are no specific previsions to deal with trade mark infringement on internet, the Trade Mark Law of the country, where the infringement had taken place, would be applicable in such cases. In our problem, if there are other firms that were registered prior to our client, then they may initiate legal proceedings against our client for redressal. Moreover, for obtaining a better position on the Google search site, search engine optimisation techniques have to be implemented. Since every site implements its own optimisation policy, one should follow the specifically recommended procedures. In our problem, the client intends to transmit advertisements by targeting IP addresses. This is a clear infringement of data protection law, unless the SNS implements security measures for access control and authentication, as stipulated in Data Protection Directive. The client had been exploring the possibility of relocating outside the EU; however, he had heard that he would lose the protection of the country of origin provisions of the Electronic Commerce Directive. Since the country of origin provisions had been removed from the Electronic Commerce Directive, there is no benefit in relocating, and the national legislation of the country, where the dispute arises, will apply. Task B The E-Commerce Directive had established an equitable system to restrict the liability of Internet Service Providers.28 Nevertheless, it is beset with several lacunae, which render it incapable of dealing with the future issues relating to e-commerce. This incapacity will be on account of its failure to address advancement of technology, ever-changing Internet industry practices, and the improper implementation of Directives by the Member States. In the US, the Digital Millennium Copyright Act has addressed these lacunae effectively. Moreover, it has provided additional incentives for the companies to establish their businesses in the US. The EU’s Directive failed to achieve legal certainty by ignoring the importance of e-commerce.29 This lies behind its failure to attract major companies to establish their business in the EU. The postal rule is inapplicable to instantaneous methods of communication, like telephone, telex or facsimile.30 Electronic mail communication is much faster than the traditional postal service. The postal rule applies to non – instantaneous modes of communication.31 The non – delivery of electronic mail is intimated to the sender. This complements delivery and read receipts, in such communication. Provision 11(2) (b) of the Electronic Commerce Regulation 2002, has been interpreted to imply that acceptance of an offer is communicated when the electronic mail is available in the inbox of the recipient.32 The EU issued the 199/93/EC Directive on Electronic Signatures, which establishes a common framework for electronic signatures. The Member States of the EU have incorporated the provisions of the Electronic Signatures Directive into their domestic laws. It stipulates four requirements for digital signatures. First, the electronic signature must be linked to the signatory; second, it should identify the signatory; third, the signatory must have exclusive control over the equipment used for making the digital signature; and fourth, the data to which it is linked must not be altered. If such data is subsequently altered, then it should be capable of revealing such alterations. An electronic signature that satisfies all these requirements is termed an Advanced Electronic signature.33 Electronic signatures are crucial in the promotion of electronic commerce. Consequently, the legislation that provides legal recognition to electronic signatures is critical for promoting electronic commerce. However, laws that promote a specific technology, in comparison to other competing technologies, tend to curtail the natural expansion of the market. The Signature Directive may not promote the best available technology and it would be in befitting if the Commission were to discard digital signatures, in favour of electronic signatures.34 The Electronic Commerce Directive establishes the framework for an Internal Market in Electronic Commerce, especially by means of the rule of country of origin. However, there are conflicting elements in this Directive, which render it ambivalent in the application of its principles. It has been anticipated that these conflicting provisions could undermine the objective of establishing a harmonised electronic marketplace in the EU. 35 The Directive provides several exemptions to the application of the country or origin rule for consumer contracts. It also establishes liability limitations for unsolicited commercial communications. It is apprehended that these exemptions have a serious negative impact on the objective of the Directive.36Moreover, these exemptions could affect cross border businesses, as Member States may restructure their national barriers, in order to apply these exemptions. This Directive empowers Member States to enact specific legal requirements, such as the mandatory Electronic signature requirement for contracts. In 2002, the UK incorporated the provisions of the Directive on Electronic Commerce in its domestic law. Whilst doing so, it failed to provide further immunities for providers of hyperlinks and information tools, such as search engines and selection intermediaries. Subsequently, in the year 2006, the Department of Business Enterprise and Regulatory Reform conducted a survey on the intermediary liability regime.37 This survey specifically examined whether the existing liability exemptions were to be extended to the providers of content aggregation services, location tools and hyperlinks. Its questionnaires evinced a mixed response, which led the Department of Business Enterprise and Regulatory Reform to conclude that it was unnecessary to extend liability limitation at the national level. Finally, the UK government came to the conclusion that it would be far better for all the parties concerned, if the issue was taken up at the EU level, by the European Commission, during the second review of the Directive on Electronic Commerce.38 Website operators have the option of offering their services, by charging the end user. Transactions on such websites constitute a part of e-commerce. These operators are responsible for the economic activity on their website. For this purpose, the Electronic Commerce Directive defines the place of establishment as the place where the operator establishes his office and other infrastructure. The location of web servers is not treated as the place of establishment. The European Court of Justice has endorsed this definition, by means of its case law.39 Furthermore, this definition is in concurrence with the provisions of the EC Treaties. The Electronic Commerce Directive stipulates that information society service providers in the EU are subject to laws of the country in which they had been established. Article 3 of the Directive specifies that a Member State should not restrict the freedom of an operator, established in another Member State, from providing Information Society services. One of the exceptions is that a Member State can restrict such freedom if it promotes consumer protection.40 Article 9 of Electronic Commerce Directive requires Member States to allow parties to conclude their contracts electronically. However, this Article excludes certain types of contracts, such as the transfer of land and contracts governed by family law, from being concluded through electronic means. In addition, this Article limits the liability of service provides who provide hosting services or act as intermediaries. It also excludes the liability of service providers if they act as mere conduits. Article 15 stipulates that Member States may not monitor the operations of service providers.41 No Member State should make authorisation compulsory for providers of Information Society services. Service providers are required to provide their complete details to their consumers. This information must contain their geographical and email addresses. The Electronic Commerce Directive included advertising and direct marketing calls in the category of commercial communications. It had imposed certain transparency requirements on all commercial communications, whereby any communication must be clearly identifiable. Moreover, operators are required to make available information relating to the legal entity that makes the communication or on whose behalf the communication has been made.42 The Government of UK did not limit the liability of the providers of hyperlinks, location tools, and content aggregation services. The Electronic Commerce Directive was implemented in July 2002. As the growth in the related legal action had been insignificant, and as the number of out – of – court settlements had been trivial, it was felt by the Government that there was no necessity to extend liability limitation to these providers.43 Moreover, it had been observed that there had been a phenomenal growth in the number of search engine providers, since the implementation of this Directive. In the wake of these developments, the UK decided to consign the issue of extending limitation of liability, to the European Commission (EC). The Government of UK was of the opinion that the EC would engender a consolidated and harmonised implementation of the limited liability concept, uniformly in all the Member States. Whether Articles 12 – 14 of the Electronic Commerce Directive are to be amended and the manner, in which such change is to be brought about, is to be decided by the EC. An interesting development in this area has been the excising of the rule of country of origin from this Directive. This initiative required businesses offering services in other Member States to be bound by the national laws of that Member State.44 The provisions of the Directive have no influence on employment laws of the Member States. In the services sector, only services enjoying a national monopoly, such as gas, electricity, water, and postal services that had been opened up to competition were covered by this Directive. This Directive chiefly concentrates on the barriers that prevent private sector organisations from supplying services in Member States. In this endeavour, it attempts to remove or lower such barriers. To this end, the Directive imposes obligations on the Member States to provide easy access to legal and administrative information that would enable an entity to establish a business that offers services. This Directive is also applicable to services offered to consumers, like health care services, leisure services, and tourism. There are certain exemptions from the provisions of this Directive, and these include financial services and transport services.45 However, electronic communications services are included only to the extent that they are not covered by the regulatory package on electronic communication services. The Electronic Commerce Directive requires the Member States to establish a single contact point. This would make it much simpler for businesses to fulfil the required formalities and procedures. In addition, companies will be allowed to complete the formalities over the internet. Furthermore, this Directive addresses the complex licensing regimes extant, in the Member States. The Member States are required to review the existing regimes and ascertain whether these can be replaced with a system of notification. They are also required to come up with new options that could more effectively comply with this Directive.46 In the UK, the Department of Trade and Industry (DTI) has published the UK Government’s response to the Electronic Commerce Directive 2000/31/EC with regard to the liability of search engines, selection tools, content and service providers. Articles 12 to 14 of the Directive limited the liability of service providers who act in the roles of mere conduits, caching or hosting. The UK has not provided any sort of exemption or protection for search engines, service providers, and selection tools. The UK government issued a consultation paper to the businesses and other organisations in the service sector in June 2005. It called for the opinions of these actors on the limitation of liability under the Directive. It also sought their views on the inclusion of service providers, selection tools, and content aggregation services. 47 This lies behind its failure to attract major companies to establish their business in the EU. The courts generally take up disputes that take place in their jurisdiction. In the Bonnier Media case, the respondent was a resident of Greece and his company operated from Mauritius. As the injury would take place in Scotland, the Court of Session of Scotland contemplated action against the respondent.48 In Euromarket Designs, a US company accused an Irish company of trademark infringement. The plaintiff alleged that the infringement had taken place as the defendant had advertised in magazines circulated in the UK and the Republic of Ireland, and as the defendant company had a website. The court dismissed this case, as it involved a very wide jurisdiction.49 In the 800-Flowers case, a US florist attempted to register a trademark in the UK, which was opposed by a local company that had registered a similar phone number. The US company failed to prove that it had traded in the UK, just because its callers were in the UK, when they had contacted it over the phone. The Trademark laws require an applicant to establish that it has a market at the place of registering the trademark.50 This principle is also applicable to websites. Article 6 of EC Regulations 593/2008 stipulates that the law of the nation, where the consumer normally resides, will apply to the contract, if the applicable law is not specified. The Data Protection Directive follows the same direction. A consumer contract is administered by the law of the nation, where the consumer normally resides. Moreover, the seller must direct his activities to the country of consumer.51 This Electronic Commerce Directive introduces limitation on the liability of Information Society service providers. This limitation applies only when the service providers act as a mere conduit or provide caching and hosting. The limitation of liability is uniformly applicable to the various services provided by third parties. 52 Thus, these liability limitations become applicable to illegal activities, like copyright infringement, trademark violation, defamatory statements, and pornography. Cyber laws are becoming more and more complicated, and the assumption that this results in better compliance has proved to be false. Complex laws result in serious disadvantages, like normative effects that are substantially weakened. Moreover, complex laws require frequent amendment, and involve contradictions.53 Thus, there is necessity to substitute these laws with legislation that guarantees legal certainty. Conclusion The introductory wording of the Electronic Commerce Directive consists of some lacunae. However, the actual text of this Directive attempts to prohibit Member States from maintaining specific requirements for electronic contracts. This safeguard can be circumvented by the lacunae inherent in the introductory language, which enables Member States to establish specific legal requirements for all electronic contracts. This Directive provides exemptions to Member States, in the context of the measures employed to promote cultural and linguistic diversity in the free market. The proliferation of multi – cultural content on the Internet, renders this exemption redundant. As such, this exemption engenders a significant amount of ambiguity. As stated by Chris Reed in his article ’How to Make Bad Law: Lessons from Cyberspace’, inconsistency and variation in the laws of different states will render internet disputes chaotic. For example, there has been considerable legal uncertainty, on account of contradictory rulings in other Member States, with respect to hyperlinks and location tool services. Another reason for this legal uncertainty is the variation in the implementation of Electronic Commerce Directive in the Member States. Moreover, technology that lends support to information society services has developed considerably, since the formulation of of this Directive. This makes it difficult to distinguish between the different categories of service providers. In the service sector, a number of services come under the scope of the Electronic Commerce Directive. This Directive applies to services that are offered for profit and services that generate economic activity. It applies to services that are offered to businesses, such as IT consultancies, management consultancies, advertising, and recruitment services. The limited liability under the Directive is pertinent to civil and criminal liability. In addition, the Directive’s limitations can only limit damage liability. Consequently, this Directive does not preclude action against online intermediaries. The subsequent amendments permit Member States to impose all types of injunctions upon online intermediaries, in addition to prohibitory injunctions. In some instances, complaints had been lodged against websites, in order to have them closed down. Such closure was based on illegal objectives, such as the hindering of lawful competition and the prevention of debate. As such, liability limitations will be applicable to illegal activities, like copyright infringement, trademark violation, defamatory statements, and pornography. Since Cyber litigation is very extensive, the laws that pertain to disputes in cyber space should be unambiguous. Uniform law will prevent problems associated with the effective implementation of cyber laws. Bibliography 1-800 Flowers Inc v Phonenames Ltd [2000] FSR 697. 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