The Law of Electronic Commerce
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This page intentionally left blank The Law of Electronic Commerce Written specifically for legal practitioners and students, this book examines the concerns, laws and regulations involved in electronic commerce. In just a few years, commerce via the World Wide Web and other online platforms has boomed, and a new field of legal theory and practice has emerged. Legislation has been enacted to keep pace with commercial realities, cyber- criminals and unforeseen social consequences, but the ever-evolving nature of new technologies has challenged the capacity of the courts to respond effectively. This book addresses the legal issues relating to the introduction and adoption of various forms of electronic commerce. From intellectual property, to issues of security and privacy, Alan Davidson looks at the practical challenges for lawyers and commercial parties while providing a rationale for the underlying legal theory. Alan Davidson is Senior Lecturer in the School of Law, University of Queensland. He is also a solicitor and barrister of the Supreme Court of New South Wales and the High Court of Australia. The Law of Electronic Commerce Alan Davidson CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Dubai, Tokyo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521678650 © Alan Davidson 2009 This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published in print format 2009 ISBN-13 978-0-511-69088-4 eBook (NetLibrary) ISBN-13 978-0-521-67865-0 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Reproduction and communication for educational purposes The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10% of the pages of this work, whichever is the greater, to be reproduced and/or communicated by any educational institution for its educational purposes provided that the educational institution (or the body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act. For details of the CAL licence for educational institutions contact: Copyright Agency Limited Level 15, 233 Castlereagh Street Sydney NSW 2000 Telephone: (02) 9394 7600 Facsimile: (02) 9394 7601 E-mail: [email protected] Information regarding prices, travel timetables and other factual information given in this work are correct at the time of first printing but Cambridge University Press does not guarantee the accuracy of such information thereafter. Contents Acknowledgements page xv Table of cases xvii Table of statutes xxv 1 The law of electronic commerce 1 Electronic commerce law 2 Internet use in Australia 5 Judicial consideration in Australia 6 Further reading 10 2 The rule of cyberspace 11 Cultural and environmental juxtaposition with cyberspace 11 Cyberspace 12 The rule of law and the rule of cyberspace 16 The rule of law 17 The rule of cyberspace 18 Spontaneous (or endogenous) order 18 A code of cyberspace 20 Information wants to be free 22 Conclusion 23 Further reading 24 3 Electronic commerce and the law of contract 25 UNCITRAL Model Law of Electronic Commerce 25 Legislation 27 Australia 27 New Zealand 28 Provisions of the Electronic Transactions Acts 29 Electronic contracts 30 Common law 31 Application of the common law 31 Exemptions 33 Exemption does not equate to a paper requirement 34 New Zealand 34 Validity of electronic transactions 35 v vi CONTENTS Writing 36 Australian provisions 37 New Zealand 39 Signatures 39 Australian provisions 40 New Zealand provisions 45 Production of documents 47 Consent 48 Example 50 Other countries’ provisions 51 Comment 52 Retention of information and documents 52 Retention in paper form 53 Retention in electronic form 53 Time and place of dispatch and receipt of electronic communications 54 Time of dispatch 55 Time of receipt 56 Acceptance by electronic communication and the postal acceptance rule 57 Placeofdispatchandplaceofreceipt 61 Attribution of electronic communication 61 Originals 63 Electronic Case Management System 63 Comment 63 Further reading 64 4 Shrinkwrap, clickwrap and browsewrap contracts 66 Shrinkwrap 67 Clickwrap 68 Browsewrap 70 Electronic agents 72 Further reading 73 5 Electronic signatures 74 Traditional signatures 74 Modern signatures 77 Electronic signing 77 Acceptance at face value and risk 79 Functions of signatures 79 Electronic Transactions Acts 80 ‘Electronic signature’ defined 82 Uses 83 Security of electronic signature 83 Digitised signatures 84 Digital signatures 84 CONTENTS vii Australian Business Number Digital Signature Certificates 86 Secure Socket Layer – Transport Layer Security 87 Applications 88 Further Reading 88 6 Copyright issues in electronic commerce 89 Thenatureofcopyright 89 Exclusive rights 91 Infringement 92 Substantial part 93 Objective similarity and causal connection 95 Software 96 Right of communication 97 Exemptions 98 Libraries and archives 98 Educational statutory licences 99 Temporary reproductions 99 Enforcement measures 99 Time-shifting, format-shifting and space-shifting 101 Piracy and enforcement 102 Peer-to-peer file sharing 102 Authorisation 105 Carrier protection 108 Hyperlinking 108 Further reading 109 7 Electronic commerce – trade marks, patents and circuit layouts 110 The nature of trade marks 110 Infringement 112 Hyperlinking 113 Framing 115 Meta-tags 117 Patents for software and internet processes 119 Developments in the United States 119 Developments in Europe 120 Developments in Australia 120 Patents and hardware 122 Circuit layout rights 123 Further reading 125 8 Domain names 126 Mapping cyberspace 126 Business identifiers 127 The nature of domain names 128 Top Level Domains names (TLDs) 129 viii CONTENTS Generic Top Level Domain Names (gTLDs) 129 Country Code Top Level Domain names (ccTLDs) 131 .au 131 .nz 132 .us 132 .uk 133 .in 133 TLD rationale 134 ICANN 135 InterNIC 136 Whois 137 ICANN Ombudsman 137 Nexus requirements 138 gTLD nexus requirements 138 .au nexus requirements 139 .nz nexus requirements 140 .us nexus requirements 140 .uk nexus requirements 141 .in nexus requirements 141 9 Domain name disputes 142 Cybersquatting 142 Dispute resolution 143 Remedies using the court process 144 Cause of action 144 US experience 146 International approaches 148 Domain name passing off 151 Oggi Advertising Ltd v McKenzie 152 Marks & Spencer v One in a Million 153 Developments 156 Trade Practices Act relief 157 Fraud 160 Conclusion 162 Further reading 162 10 Uniform domain name dispute resolution policies 163 WIPO internet domain name reports 164 UDRP rules 165 Identical or confusingly similar 166 Trademark or service mark 168 Registrant has no rights or legitimate interests 171 Registration and use in bad faith 172 UDRP process 175 ccTLD dispute resolution policies 176 auDRP 176 .nz DRSP 177 CONTENTS ix usTLD Dispute Resolution Policy 178 .uk DRSP 178 INDRP 179 Additional policies 179 Practical ramifications 181 Conclusion 181 Further reading 182 11 Jurisdiction in cyberspace 183 Rules of private international law 183 Forum non conveniens 184 Dow Jones v Gutnick 185 Adventitious and opportunistic 189 Effects test 190 Australian cases 191 Early US experience 194 Universal rights 196 Alternative approaches 198 Single publication rule 200 Substantial publication 201 Uniform defamation legislation – choice of law 201 Conclusion 202 Further reading 203 12 Defamation in cyberspace 204 Defamation principles 205 Defamation reform 206 Defamation in cyberspace – actions and issues 206 Statute of limitations 210 Single publication rule 210 Single controversy principle 213 Single cause rule 213 Adventitious or opportunistic conduct 213 Jurisdiction for defamatory statement 214 Conclusion 214 Further reading 215 13 Privacy and data protection in cyberspace 216 Information wants to be free 217 Privacy and regulation 218 Information privacy 218 Australia 221 National Privacy Principles (NPP) 223 Data protection 225 Victoria 225 New South Wales 226 x CONTENTS Queensland 226 Western Australia 226 South Australia 227 Tasmania 227 Northern Territory 227 Australian Capital Territory 228 Abuses 228 Cookies 228 Web bugs 231 International Covenant on Civil and Political Rights (ICCPR) 232 Data protection 232 Review 233 Personal privacy 235 New Zealand 240 United States 241 Final comment 242 Further reading 242 14 Electronic mail and online presence 243 Email 243 Attachments 244 Authentication 244 Language 245 Viruses 246 Disclaimers 246 Risk assessment 248 Service of documents by email 248 Time and place of dispatch and receipt 249 Web page presence 250 Liability for online material 250 Disclaimers – conditions of use 251 Information to be placed on pages for practical and legal purposes 252 Newsgroups and mailing lists 253 The professional office and email 253 Backup copies 253 Maintain supervisory checks 253 Records and costing 254 Confidentiality 254 Internal trial 254 Confirmation of sending 254 Access to files 255 A new form of expression 255 Conclusion 255 15 National electronic