The digital revolution has necessitated a re-examination of intellectual property issues by intellectual property holders, users and law makers. The nature of the digital age enables data to be easily copied, published and disseminated. Placing data, images, logos and text, for example, on internet websites, is child's play. This means that trade mark holders have a new frontier to battle. Misuse of their trade mark rights, deliberate or incidental, commercial or personal, arises in relation to cybersquatting and domain names, hyperlinking (particularly deep linking), framing in web pages and the use of meta-tags.

This chapter addresses issues relating to the impact of electronic commerce on the specific intellectual property rights of trade marks, patents and circuit layouts. It is intended to be only a brief overview of the law in these areas. The chapter will discuss the use and design of the internet, including hyperlinks, framing and meta-tags. Patents involving software and hardware are considered, and the specific intellectual property type known as circuit layouts is described. Cybersquatting and related issues are discussed in Chapters 8 and 9.

The nature of trade marks

A trade mark is ‘a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person’. A trade mark is used in the course of trade to show a connection between a particular business and the goods or services it supplies.

Electronic surveillance methods have become the subject of several pieces of federal legislation since the events of September 11, 2001. Anti-terrorism legislation internationally has introduced powers and regulations which (among other things) have an impact on cyberlaw, communications, the internet and security (confidentiality and safe computer systems). The most recent proposal, the Surveillance Devices Act 2004 (Cth), includes significant increases in powers of investigation and surveillance.

Prior to September 11, 2001, there were no federal or state laws relating to terrorism. The Charter of the United Nations (Anti-Terrorism Measures) Regulations 2001 implemented aspects of UN Security Council Resolution 1373 of 28 September 2001, which called on all nation states to prevent and suppress the financing of terrorist acts. However, beginning in March 2002, the Australian government introduced a number anti-terrorism Bills. In 2003, the government announced the creation of an Ambassador for Counter-Terrorism; the government has since signed numerous memorandums of understanding on counter-terrorism.

Many of these measures affect cyberlaw and electronic commerce. The extent to which law enforcement and security agencies can now intercept, search and seize information, electronically and otherwise, has been dramatically enhanced. Some anti-terrorism provisions permit Australian law enforcement and security agencies to intercept unread emails in routine investigations. This chapter briefly examines these electronic surveillance measures.

The USA PATRIOT Act

In response to the attacks of September 11, 2001 the US Congress drafted, debated and passed the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act 2001 (commonly known as the PATRIOT Act), all within seven weeks.

Part one. Electronic commerce in general

Chapter I. General provisions

Article 1. Sphere of application*

This Law** applies to any kind of information in the form of a data message used in the context*** of commercial**** activities.

Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.

Commerce is typically about profit. The history and development of commerce involves the element of risk. Risk assessment in commerce involves consideration of such factors as the law of contracts, the parties, the goods or services and legal forum. Many commercial parties have braved the new electronic commerce world without knowing or understanding the legal implications.

In an attempt to ensure confidence, many international organisations have proposed treaties, model laws and protocols to encourage certainty and stability for these international electronic commercial practices and in relation to laws of contract. The UNCITRAL Model Law of Electronic Commerce (Model Law) has proved the most popular, with significant international acceptance by national legislatures, including Australia and New Zealand.

This chapter addresses the regulation of, and legislative responses to, electronic contracting. It challenges the wisdom of and necessity for legislation based on the Model Law, and the introduction of the concept of consent as a precondition for the application of selected legislative provisions.

UNCITRAL Model Law of Electronic Commerce

In 1996 the UN Commission on International Law Trade (UNCITRAL) released what is now the most popular model for consumer and commercial protection in an electronic environment. The UNCITRAL Model Law on Electronic Commerce (Model Law) was intended to provide national legislatures with a template of internationally acceptable rules that would remove legal obstacles and create a more secure legal environment for electronic commerce.

The signature has been the prime method a person uses as a proof of identity, and as a material expression of intent and execution of documents. A signature on a document indicates the provenance of the document and the intention of the signatory with regard to that document. With the advent of the electronic era, a form of signature is adopted for electronic documents. This chapter examines the regulation, use and security of electronic signatures and the types of electronic signatures, such as digital signatures and SSL technology, being used in electronic commerce.

Traditional signatures

Understanding an electronic signature involves understanding the purpose and use of the traditional signature. The status of traditional signatures has been taken for granted or assumed. The law has developed for centuries with notions of deeds and documents being signed, sealed and delivered, witnessed, notarised and so forth. In some situations a signatory is bound on signing, and in others the signatory is not bound until there is an affirming act. The underlying intention of the signatory may be to be bound only by the subsequent act of delivery. There may be many signatures on a contract: one person may sign intending to be bound by the terms of the contract, while another is merely a witness, with no legal interest in the terms. Their intention is paramount.

Domain names disputes arise for a number of reasons. The uniqueness of each domain name leads to the potential for conflicts with businesses and individuals with similar names. In addition to these relatively accidental conflicts, some parties deliberately register names to hijack businesses, extort money from or disrupt the operations of established organisations. Such an action is known as cyberpiracy, cybersquatting or typosquatting. This chapter analyses the nature of domain name disputes and remedies using national courts. The next chapter deals with the application of the Uniform Dispute Resolution Policy (UDRP) of ICANN and selected national domain name administrators, and with selected dispute resolution policies.

Cybersquatting

Speculating on the resale value of internet domains names has become a profitable pastime for internet devotees. For example, loans.com sold for US$3 million, cinema.com for US$800,000 and HappyBirthday.com for US$55,000. These transactions are part of commerce and offend no legal precepts. ICANN and most National Domain Administrators accept the principle of first come first served. Also, many country code domain administrators prohibit the selling of domain names; those who breach such a rule risk forfeiting the domain name. However, a person who registers a domain name identical to a well-known or famous name for the purpose of subsequently demanding an exorbitant fee for ‘transfer’ (that is, sale) is referred to as a cybersquatter. The value to the cybersquatter lies in the fact that every domain name is unique.

1. 1. Purpose. This Uniform Domain Name Dispute Resolution Policy (the ‘Policy’) has been adopted by the Internet Corporation for Assigned Names and Numbers (‘ICANN’), is incorporated by reference into your Registration Agreement, and sets forth the terms and conditions in connection with a dispute between you and any party other than us (the registrar) over the registration and use of an Internet domain name registered by you. Proceedings under Paragraph 4 of this Policy will be conducted according to the Rules for Uniform Domain Name Dispute Resolution Policy (the ‘Rules of Procedure’), which are available at www.icann.org/udrp/udrp-rules-24oct99.htm, and the selected administrative-dispute-resolution service provider's supplemental rules.

2. 2. Your Representations. By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (a) the statements that you made in your Registration Agreement are complete and accurate; (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights.

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It is said that a verbal contract is worth the paper it is written on. Although the common law recognises oral contracts, this oxymoron reflects the problems associated with proving not only the terms of a verbal contract, but also its very existence. The law of evidence is central to legal systems. Its restraints, rules and procedures aim to provide certainty and reliability within the criminal and civil justice systems. New and unanticipated problems emerge when these historic and sometimes antiquated rules of evidence are applied to electronic documents and records.

This chapter identifies the problems of applying paper-based rules of evidence in the electronic era. It first addresses how electronic information should be retained for the purposes of its potential use as evidence in legal proceedings and examines the relevant case law and statutory provisions. It then tackles the thorny problem of submitting to a court, as evidence, hard ‘copies’, typically printouts of electronic records such as electronic mail, particularly in circumstances where the electronic version has been deleted.

Evidence of electronic records

Courts typically establish facts before determining rights and imposing orders. The rules of evidence were developed to ensure a just basis for the making of such determinations. Evidence should be relevant, reliable and the best that is available. Notwithstanding modern statutes on evidence, case law from the 17th and 18th centuries still dictates the form in which evidence must be presented.

The internet facilitates the swift copying and exchange of digital material. Hyperlinking and framing can result in new and novel possibilities for infringement of copyright. Works protected by copyright, such as music and videos, can be easily transferred in peer-to-peer dealings. Such transfers have become the target of copyright owners. This chapter explores these issues and developments and the contiguity between copyright and electronic commerce. It is not intended to state the law relating to copyright, other than a brief overview. The advent of electronic commerce and the internet have necessitated a rethink of intellectual property issues by the World Intellectual Property Organisation (WIPO), the courts and the legislature. The proliferation of material on the internet – written, aural and graphic – has posed new questions and resulted in the creation of new rights internationally. The next chapter addresses the interplay between electronic commerce and intellectual property rights in trade marks, patents and circuit layouts.

The nature of copyright

Intellectual property comprises state-sanctioned rights entitling the holder of such rights to a limited monopoly on exploiting and controlling the property for a predetermined period of time. The state gains the benefit of, for example, literary and musical works, new inventions, medicines, research, designs and innovation. Inventors, writers, composers and designers have the incentive of potential rewards for their efforts. Their works, patents and designs will form part of the public domain when the predetermined period expires.

Part 1—Preliminary

Purposes

The purposes of this Act are—

1. (a) to recognise that transactions effected electronically are not by that reason alone invalid;

2. (b) to provide for the meeting of certain legal requirements as to writing and signatures by electronic communication;

3. (c) to permit documents to be produced to another person by electronic communication;

4. (d) to permit the recording and retention of information and documents in electronic form;

5. (e) to provide for the determination of time and place of dispatch and receipt of electronic communications;

6. (f) to stipulate when an electronic communication will bind its purported originator.

Commencement

This Act comes into operation on 1 September 2000.

Definitions

(1) In this Act—

consent includes consent that can reasonably be inferred from the conduct of the person concerned, but does not include consent given subject to conditions unless the conditions are complied with;

data includes the whole or part of a computer program within the meaning of the Copyright Act 1968 of the Commonwealth;

data storage device means any article or material (for example, a disk) from which information is capable of being reproduced, with or without the aid of any other article or device;

electronic communication means—

1. (a) a communication of information in the form of data, text or images by means of guided or unguided electromagnetic energy, or both; or

2. (b) a communication of information in the form of sound by means of guided or unguided electromagnetic energy, or both, where the sound is processed at its destination by an automated voice recognition system;

The availability of electronic mail (email) goes beyond the introduction of postal systems, the telephone, telexes and facsimile. In the near future verbal communication will take place with greater ease and clarity than the telephone. Additionally, users will have the advantage of digitally saving conversations in a similar way to the way in which they can already save email messages. The tools to access and navigate between systems are steadily becoming cheaper, more powerful and easier to use. The internet provides tools to maximise the use of time to engage in discourse, study and recreation in a manner previously unimaginable. Email adds a further dimension to communication. Email will be required by many government departments and courts for the lodging of materials and to facilitate correspondence. Email is a fast and efficient worldwide communication portal. This chapter deals with legal and practical issues relating to the use of electronic mail and maintaining an online presence.

Email

Email is one of the most popular applications of the internet. It allows users to send messages created on the computer to any other internet computer in a matter of seconds. Data files such as photographs, sound clips and, more usually, word-processed document files, can be attached to an email message. In fact any file which may be stored digitally may be transferred by email. It is usually cheaper and quicker than a telex or facsimile and more reliable than the ordinary post.

Mapping cyberspace

Cyberspace is chaos. More than a billion users trawl unreal space for the gold, titbits and junk released by a multitude of undisciplined hosts. Cyberspace contains a massive amount of valuable and useless information. There are several billion web pages at users' disposal. Some are freely available and easy to locate. Others are hidden and security protected. The domain name system forms a map in cyberspace, indexing and listing material. Domain names have unwittingly become significant business identifiers and valuable assets. This chapter examines the nature of domain names, property rights, structure and regulations. Chapters 9 and 10 deal with domain name disputes and their resolution through the courts and through the use of domain name dispute resolution policies.

Information in cyberspace is so vast it cannot be properly catalogued. It is metamorphic in nature, growing, twisting and changing continuously. A semblance of order emerges in part by using meaningful identifiers for human interaction. Domain names permit millions of possibilities for cataloguing, indexing and searching. Their value in terms of both knowledge and commercial interests is unprecedented. The internet recognises no boundaries, yet existing laws are territorially based. The use and misuse of domain names have raised conflicts previously unknown in law. Existing legal remedies have proven inadequate, expensive and inconvenient, and often they have been unenforceable. Compulsory arbitration clauses have been placed into domain name licence agreements in an attempt to address these deficiencies. But new problems continue to arise, resulting in inconsistent determinations.

Online commerce, local and global, has become commonplace in the past two decades. Numerous traders have embraced the new opportunities by creating global meeting places and auction houses such as eBay and amazon. The sale of software, cars, travel, books, music and videos are just some of the many commercial transactions carried out in cyberspace. More than a trillion dollars in trade is transacted online annually. The online contracts are typically entered into without paper, without the use of a pen and without the use of the spoken word. This chapter examines cases known as the shrinkwrap, clickwrap and browsewrap cases, which have explored how contracts may be entered into and how conditions may be incorporated into the transaction. This chapter also mentions contracts entered into by electronic agents.

Accepting terms and conditions by conduct, notice or click of the mouse has raised questions reminiscent of the contract cases known as the ticket cases. The typical ticket case scenario arises where a person is handed a ticket – for example, for train travel, parking or dry cleaning. The ticket may state that the holder is subject to terms which the holder may have had little or no chance to read, negotiate or agree. The courts have been required to determine the point of time at which these contracts are entered into and their terms and conditions. The starting point has been determining which terms are to be incorporated into the contract.

Electronic commerce refers to all commercial transactions based on the electronic processing and transmission of data, including text, sound and images. This involves transactions over the internet, plus electronic funds transfers and Electronic Data Interchange (EDI).

On one level, electronic commerce began in the mid-1800s, when the first contract was entered into using the telegraph or telephone. However, the expression ‘electronic commerce’ is typically used in connection with the expansion of commerce using computers and modern communications, most notably the internet and cyberspace. The development of security protocols has aided the rapid expansion of electronic commerce by substantially reducing commercial risk factors.

The advantages of electronic commerce to commercial parties include ease of access, anonymous browsing of products, larger choice, the convenience of shopping from the computer and enormous efficiencies. The disadvantages include the potential for invasion of privacy and security risks. There are also questions regarding jurisdiction, standards, protection of intellectual property, taxation, trade law and many other issues. Nevertheless, acceptance of electronic products and services has grown substantially.

Security is of paramount importance in electronic commerce. Public key cryptology was invented in response to security concerns and has revolutionised electronic commerce. Communications are now relatively secure: digital signatures or certificates permit the authentication of the sender of a message or of an electronic commerce product.

This book addresses legal issues relating to the introduction and adoption of various forms of electronic commerce.

‘Privacy’ has numerous meanings, and its importance varies greatly among individuals, communities, organisations and governments. It is an aspect of freedom and human rights. Civil libertarians may believe that our actions and behaviour should not be subject to public or governmental scrutiny; protectionists may accept such erosions for the greater good in the name of law and order. The development of technology, together with social, economic and political factors, has raised the antennas of those concerned with interference from governments, enterprises and others on personal freedoms.

Historically, governments seem to have pursued increasing and systemic invasions of privacy in the name of law and order, fighting crime and terrorism. However, their role is in fact to ensure and balance security issues and the proper protection of the privacy rights of the individual. In the 1990s the Clipper Chip was proposed by the US government, ostensibly for the purpose of allowing the government to override individual encryption to protect society from ‘gangsters, terrorists and drug users’. Such a process would have allowed the government to access and decipher all encrypted files. The proposal was unsuccessful. In Australia in 1984, an attempt to pass a Privacy Act failed because it set in place an anti-privacy provision: a central national identification card.

Search engines such as Google use sophisticated programs called spiders, robots and wanderers to trawl the internet gathering data on several billion websites, creating an index that handles several million enquiries per day.

Section 10 Interpretation

(1) In this Act, unless the contrary intention appears:

‘access control technological protection measure’ means a device, product, technology or component (including a computer program) that:

1. (a) is used in Australia or a qualifying country:

1. (i) by, with the permission of, or on behalf of, the owner or the exclusive licensee of the copyright in a work or other subject-matter; and

2. (ii) in connection with the exercise of the copyright; and

1. (b) in the normal course of its operation, controls access to the work or other subject-matter;

but does not include such a device, product, technology or component to the extent that it:

1. (c) if the work or other subject-matter is a cinematograph film or computer program (including a computer game)—controls geographic market segmentation by preventing the playback in Australia of a non-infringing copy of the work or other subject-matter acquired outside Australia; or

2. (d) if the work is a computer program that is embodied in a machine or device—restricts the use of goods (other than the work) or services in relation to the machine or device.

For the purposes of this definition, computer program has the same meaning as in section 47AB.

1. ‘adaptation’ means:

1. (a) in relation to a literary work in a non-dramatic form a version of the work (whether in its original language or in a different language) in a dramatic form;

2. (b) in relation to a literary work in a dramatic form a version of the work (whether in its original language or in a different language) in a non-dramatic form;

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