================================================================= COMPUTER LAWYER E-NEWS Issue #005 April 15, 1996 News and views on new media, telecommunications and computer law for legal practitioners. ================================================================== CALL FOR SUBMISSIONS I am looking for assistance in collecting content for this publication. Please consider sending in an article, news summary or announcements that might be of interest. AMERICAN FAMILY ASSOCIATION WANTS COMPUSERVE PROSECUTED UNDER CDA In an April 1 letter from the American Family Association written to US Attorney General Janet Reno, the AFA asks that Reno investigate CompuServe for potential violations of the new Communications Decency Act. Under the act, it is a violation "to display in a manner available to a person under 18 years of age ... image that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs ..." The AFA alleges that on March 29, 1996, CompuServe began offering pornographic images to its users from its MacGlamour Forum. CompuServe had sent an online message to its users indicating that adult-oriented material can be blocked for those who wish to do so. However, many parents of children using CompuServe may not have received this online message. GREATER REGULATION OF ONLINE ADVERTISING IS EXPECTED Online advertising is expected to further the growth of the World Wide Web. Greater government involvement is also expected. In the last couple of weeks, the US Food and Drug Administration announced details of several scams that were advertised online. The announcements followed a settlement last October of an FTC lawsuit against the author of a fraudulent advertisement placed on America Online. Expected regulations will likely subject online ads to the same regulations and limits as those that apply to television or magazines. [Washington Technology Online - March 21, 1996] NEWS RULES FOR CYBERSPACE A working group consisting of industry executives is developing rules to guard intellectual property in Cyberspace. The group was formed to work out a growing dispute between major copyright holders and the online industry. [Washington Technology Online - March 21, 1996] ENTERTAINMENT LAW SITE Want to learn the do's and don'ts of cutting a distribution deal? All about recently filed lawsuits affecting the entertainment industry? Is so, surf over to the Hollywood Law Cybercenter at http://www.hollywoodnetwork.com:80/Law/index.html FRAUD ON THE NET A temporary restraining order has been issued against Majorie Phillips, a.k.a. "Dr. Clark", who allegedly placed an advertisement on her Web site claiming she would provide a cure for AIDS to anyone who purchased a $24 book. Her Web site was shut down after the Massachusetts Consumer Protection and Antitrust Division received complaints about the ad. Court date was scheduled for April 11. COPYRIGHT LAWS AND ACADEMIC COURSE PACKS Follett Corporation, the leading US distributor of academic course materials and the largest operator of college bookstores, has a web site that contains extensive background information on copyright laws and how they pertain to custom academic coursepacks. http://www.capco.com FOCUS ON SOFTWARE LICENSING AGREEMENTS: A PROPOSED YEAR 2000 WARRANTY By Chadwick C. Busk, Attorney (ChadB1216@aol.com) MIS departments of corporations worldwide have recently begun to focus on the problems which the turn of the century will engender in computer hardware or software systems which were created with a 2-digit data code. Unless an exhaustive review of computer code is undertaken on a line by line basis and 2-digit data components are changed to 4-digits, these systems may render unreliable results - or fail entirely - on or before January 1, 2000. According to a recent issue of Information Week, the estimated cost of a single large company to fix its "Year 2000 Problem" is $40 Million. The publication also predicts that only half of all companies will devote the necessary resources to remedy the problem by January 1, 2000. This problem strikes me as a fertile area for computer lawyers when drafting and negotiating software license agreements and computer hardware purchase agreements for licensees/buyers from now until the turn of the century. In addition to the more typical warranties which protect a licensee/buyer (e.g., a warranty against software time bombs and viruses), the insightful practitioner may also want to include the following "Year 2000" warranty: 'In addition to the foregoing warranties, Licensor [OR SELLER] also warrants to Licensee [OR BUYER] that the Products shall not, in whole or in part, malfunction or cease to function as a result of time sensitive software code or any other Product component which does not account for the end of the 20th Century and the beginning of year 2000. Notwithstanding any other provision herein, the duration of this warranty shall continue until July 1, 2000.' Note that the term Product should be broadly defined in the software license agreement or hardware purchase agreement to include the software, hardware, and systems which the buyer or licensee is acquiring. Also, one should make certain that the software is defined in the agreement to include both software programs furnished to the licensee on separate media as well as software hardwired into the equipment being purchased. If the vendor consents to this warranty, the buyer/licensee will have some protection against a Year 2000 problem. Likewise, the vendor's refusal to give this warranty will also have the positive effect of causing the buyer/licensee to inquire why the software, hardware, or system being acquired is not Year 2000 compatible and what it would take for the vendor to comply with this requirement. Presumably, a vendor's failure to make the software, hardware or system Year 2000 compatible would justify a substantial decrease in the contract price or license fee. Finally, practitioners should review software and hardware maintenance agreements to determine whether correction of the Year 2000 problem should be included as a part of the licensor/seller's maintenance or support obligation. SIXTH CONFERENCE ON COMPUTERS, FREEDOM AND PRIVACY The Sixth Conference on Computer, Freedom and Privacy was held March 27-30, 1996 at MIT. If your Web browsers supports RealAudio (see http://www.realaudio.com/) then you can listen to some of the sessions across the net. Some of the sessions available in RealAudio format are: Intro and Keynote Address - Hal Abelson & Dr. George Metakides (60 min) Int'l Developments in Cryptography - Dorothy Denning, moderator (90 min) Encryption Before the Court - Cook & Rasch .vs. Good & DuBois (135 min) Mass Communication .vs. Mass Media - John Seigenthaler, moderator (100 min) Communications Decency Act update - Daniel J. Weitzner, moderator (100 min) Copyright and Freedom of Expression - Pamela Samuelson, moderator (105 min) Limiting On-line Speech On Campus - Arthur Miller, moderator (80 min) Electronic Money - Simson Garfinkel, moderator (75 min) Content Control on the Global Net - Daniel J. Weitzner, moderator (100 min) Internet Service Providers - Jeff Ubois, moderator (105 min) Privacy and the Global Info Infrastructure - Marc Rotenberg, moderator (95 min) China and the Internet - Gary Marx, moderator (80 min) We Know Where You Will Live - Tom Maddox, moderator (75 min) The Conference material can be accessed at: http://swissnet.ai.mit.edu/~switz/cfp96/ ERRORS AND OMISSION LIABILITY INSURANCE FOR ONLINE PUBLISHERS More information about errors and omission liability insurance for online publishers, Web sites, Internet access providers, as well as a number of articles that discuss the new liability exposures presented by the Internet are available at: http://www.poulton.com/ PRESS RELEASE PRESS RELEASE PRESS RELEASE PRESS RELEASE For Immediate Release Virtual Magistrate Established for the Internet Voluntary Dispute Resolution for Network Conflicts A newly established Virtual Magistrate Project will assist in the rapid, initial resolution of computer network disputes. The specialized system of online arbitration and fact-finding was announced by Timothy C. Leixner, Chairman of the Board of the National Center for Automated Information Research (NCAIR) which is funding the pilot project. The Fellows of the Cyberspace Law Institute helped in the development of the project. "Millions of people around the world communicate and conduct business on computer networks," said Mr. Leixner in announcing the project. "Disputes are inevitable, and existing courts can be too slow, too cumbersome, and too local to have global effect. We need to explore new forms of dispute resolution, provide timely relief, and develop appropriate sanctions that are suitable for worldwide computer networks. That is the purpose of the Virtual Magistrate Project." A pool of neutral arbitrators with experience in the law and in the use of computer networks will serve as the Virtual Magistrates. The magistrates (who do not have to be lawyers) will be selected jointly by the American Arbitration Association and the Cyberspace Law Institute, and will undergo training in arbitration techniques. Complaints will be accepted through either through electronic mail or through a form on the Virtual Magistrate's World Wide Web site. Internet users, system operators, and others affected by network messages, postings, and files may be the source of complaints. Initially, the Virtual Magistrate will decide whether it would be reasonable for a system operator to delete or otherwise restrict access to a challenged message, posting, or file. Objections may be based on copyright or trademark infringement, misappropriation of trade secrets, defamation, fraud, deceptive trade practices, inappropriate (obscene, lewd, or otherwise violative of local system rules) materials, invasion of privacy, and other wrongful content. At a later date, the Virtual Magistrate may accept complaints about other network- related activities. The need for a fast and accessible resolution of disputes is highlighted by ongoing litigation involving Netcom On-Line Communications Services and the Church of Scientology. The Church alleged that postings made by a Netcom user infringed on the Church's copyrights. The case is before federal district court, and a lengthy proceeding is expected. Arbitration though the Virtual Magistrate Project might have been able to offer an independent assessment of whether there was infringement. Prompt identification of reasonable responses for system operators would clearly be beneficial to all. Use of the Virtual Magistrate for immediate resolution of disputes would not preclude traditional litigation. An impartial magistrate will be assigned to each complaint. Proceedings will normally take place through electronic mail. The goal is to reach a decision within 72 hours (three business days) whenever possible. Information on cases decided by the Virtual Magistrate will be publicly available at a World Wide Web site maintained by the Villanova Center for Information Law and Policy at . Other documentation for the Project is available at the same Web site. David Johnson, Co-Director of the Cyberspace Law Institute said: "The Virtual Magistrate Project is not a solution to all network problems. Some matters will inevitably end up in traditional courts. If the Virtual Magistrate Project can contribute to the swift, inexpensive, and fair resolution of some disputes, then it will be a success." Paul Evan Peters, Executive Director of the Coalition for Networked Information, a diverse partnership of over two hundred institutions and organizations promoting the scholarly and intellectually productive uses of the Internet commented: "This project promises an extremely important and much needed alternative to legislation, contract negotiation, and litigation for addressing the uncertainties that we should all face together in the rapidly evolving networked resource and service environment." The Virtual Magistrate Project is a pilot project. Adjustments to the rules and procedures will be made based on experience. The Project will be evaluated by the participants at a conference to be convened by NCAIR and CLI in May 1996, and decisions will be made about finding a more permanent structure and funding. NCAIR has made $75,000 available for the operation of the pilot. NCAIR is a non-profit, educational corporation actively engaged in the study and application of technology to the to the legal and accounting professions since 1966. The American Arbitration Association (AAA) is a public-service, not-for-profit organization offering a broad range of dispute resolution services to corporations, attorneys, insurers, individuals, trade associations, unions, consumers, and all levels of government. AAA has been an international focal point for private dispute resolution since arbitration became an acceptable alternative to courts in the 1920s. George Friedman, Senior Vice President of AAA said: "Given the increasing inaccessibility of the court system and the explosive growth of online technology, it is quite appropriate that an effort would be made to develop a means of resolving disputes simply and quickly online. The American Arbitration Association is delighted to be a founding partner of the Virtual Magistrate Project, which will undoubtedly pave new ground in advancing alternative dispute resolution." The Villanova Center for Information Law and Policy will maintain a public online repository of Virtual Magistrate complaints, decisions, and documents. The Villanova Center will also maintain electronic discussion groups for magistrates, participants, and other interested parties, and it will work jointly with AAA to prepare training materials. The Villanova Center is at Villanova University School of Law, near Philadelphia. Contacts: Virtual Magistrate Project, Robert Gellman, Executive Director, 202-543-7923, rgellman@cais.com Cyberspace Law Institute, David R. Johnson, 202-496- 9523, djohns06@counsel.com; David Post, 202-364-5010, dpostn00@counsel.com Villanova Center for Information Law and Policy, Henry H. Perritt, Jr., Professor of Law, 610-519-7078, perritt@law.vill.edu National Center for Automated Information Research: Timothy C. Leixner, Chairman of the Board, 954-462-3300 emoleixner@aol.com American Arbitration Association: George Friedman, Senior Vice President, 212-484-4120, usadrghf@arb.com Electronic Addresses for the Virtual Magistrate Project VM Web Page: http://vmag.law.vill.edu:8080/ AAA Web Page http://www.adr.com Complaints: vmag@mail.law.vill.edu Help: vmag-question@mail.law.vill.edu vmag-help@mail.law.vill.edu VM Operations: vmag-admin@mail.law.vill.edu vmag-owner@mail.law.vill.edu AAA Administrator: vmag-aaa@mail.law.vill.edu VM Executive Director: rgellman@cais.com ----------------------------------- Upcoming Conferences ----------------------------------- No new information. ------------------- Administrivia ------------------- (c) 1996 by Alan Gahtan (http://www.io.org/~agahtan). 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