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April 2002 Volume 3, Issue 4
Editors Cherie W. Blackburn Robert W. Pearce, Jr. John C. McElwaine
1-800-237-2000 Nelson Mullins has more
than 275 attorneys firm-wide, with over 25 attorneys having
significant representation of e-commerce clients in areas including
patent, copyright and trademark protection; business planning,
securities and venture capital; and licensing, distribution and
contract preparation. Atlanta Contacts Neil Grayson Cherie
Blackburn Robert
Pearce John
McElwaine Charlotte Contact Jason
Sprenkle Myrtle Beach Contact Franklin
Daniels Columbia Contact Mark Dukes Greenville Contact Marvin
Quattlebaum William
Herlong Munich Contact Stefan Lode CyberWatch is an Internet Law Group news digest published as a service to Nelson Mullins’ clients and friends. The articles are summaries of particular developments in the law and are not intended to be a solicitation or to render legal advice. This publication can be considered advertising under applicable laws.
CyberWatch
is a trademark of Nelson Mullins Riley & Scarborough, L.L.P.
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E-Mail Communications May Constitute Binding Contract Despite a property owner’s argument that he never signed a contract to sell his property, a Massachusetts judge has refused to dismiss a lawsuit filed by the prospective buyer of the property. In the suit, the prospective buyer claimmeds that the owner’s e-mail communications constituted a binding contract to sell the property. The plaintiff thought he had a deal to buy the defendant’s house in Marion, Massachusetts for $1.825 million; however, after six months of negotiating with the plaintiff, the defendant backed away from the sale. The prospective buyer sued, claiming that the e-mails between the parties constituted a valid and binding contract. The judge refused to dismiss the case, stating that all of the e-mails exchanged between the two parties ended with the “typewritten” names of the senders. According to the judge, the e-mails, taken together, constituted a legally binding purchase and sell agreement that outlined all the necessary terms of the contract. While the defendant’s wife who co-owned the property with him did not take part in the e-mail communications, the judge found that the communications suggested that the wife was aware of the ongoing negotiations concerning the sale of the property. This case constitutes the first time in Massachusetts that e-mail communication has been found sufficient to form a contract. Boston real estate attorney Beth Mitchell warned “if you exchange e-mails about the terms of a sale--even if you think later you’re going to put it all down on paper so you’re going to have a more thought-out comprehensive document -- you may find you’re bound, even though you haven’t signed anything.” Credit: realestate.boston.com News Organizations Sue Governor for Destroying E-Mail Four news organizations in Salt Lake City have sued Utah Governor Mike Leavitt, contending that he is illegally destroying his e-mail. According to the lawsuit, Governor Leavitt’s deletion of electronic documents amounts to destroying public records. A spokesman for Governor Leavitt said that the Governor’s Office viewed e-mail much like a conversation and believed it was abiding by the law. Credit: SecurityFocus online Alleged e-Bay Hacker Jailed Following Court Appearance Accused e-Bay hacker Jerome Heckenkamp may have asked one too many questions of Judge James Ware in a recent routine hearing to set future court dates. Heckenkamp challenged the indictment against him on the grounds that it spelled his name, Jerome T. Heckenkamp, in all capital letters, while he spells his name with the first letter capitalized and subsequent letters in lower case. Twenty-two year old Heckenkamp, who faces two federal grand jury indictments charging that he cracked computers at e-Bay, Lycos, Exodus Communications and other companies in 1999, recently fired his attorney and decided to personally defend himself against the indictments. Judge Ware suggested that Heckenkamp address his name challenge with the jury when his case goes to trial. Heckenkamp, rather than leave well enough alone, demanded that he immediately be allowed to take the stand and testify. He then asked the Court to identify the plaintiff in the case and was informed by the Court that the United States was the plaintiff and was represented by the Assistant U.S. Attorney. Heckenkamp replied that he wanted to bring “the United States of America” into the courtroom, and Judge Ware ordered that he be taken into custody. Prior to the hearing, Heckenkamp had been free on $50,000 bail and ordered not to use cell phones, the Internet, computers, video games, or fax machines. Following Heckenkamp’s unusual comments during the hearing, Judge Ware no longer felt satisfied that Heckenkamp would make his future court appearances. The trial in this case is set for April 23. Credit: wired.com Judge Questions Whether Microsoft’s Windows is Protectable Trademark Microsoft recently received an unfavorable ruling in a lawsuit it brought against Lindows.com, Inc., a six-month-old San Diego start-up company trying to introduce an operating system called Lindows. Microsoft sought a preliminary injunction against Lindows.com, Inc. to halt the company’s use of the name Lindows. At the hearing, Chief U.S. District Judge John Coughenour wrote that there are “serious questions regarding whether ‘Windows’ is a generic name and thus eligible for the protection of federal trademark law.” The judge denied the preliminary injunction, stating that Microsoft had not demonstrated that it was likely to win at trial. As a result of the ruling, Lindows can continue using the name for now. This case is the first time Microsoft’s claim on the exclusive right to use “Windows” as a product name has been challenged since the company began using it in 1983. Credit: SeattleP-I.com Teen Hacker Arrested on Eleven Felony Counts of Computer Crime A Kansas teenager using the nickname “Artech” is said to have defaced more than 50 Web sites in 2000, including sites operated by the U.S. Department of Transportation, the U.S. Department of Labor, and the Internet home page of the City of Stockton, California. According to Webmaster Kathy Sloan, the Stockton home page was defaced in June 2000. Shortly thereafter, Sloan received an e-mail from someone identifying himself as “Matt” who took credit for the defacement and offered to help her secure the site in exchange for a laptop computer. Sloan contacted the police who, in turn, brought in the FBI. As part of a plan to catch the hacker, Sloan played along with him and exchanged over 90 e-mails with Kroeker. She eventually told him that the City would bring him in as a volunteer to work on the Stockton Website and give him a laptop, provided that he complete an application form. Kroeker completed the application form and sent it to Sloan, thereby providing his name, address, and various other information about himself. Credit: Newsbytes.com Hollywood Blames the Technology Industry Despite courtroom victories against Napster and others who commit or contribute to Internet piracy, millions of people continue to download free digital copies of songs and movies. Hollywood studios and record companies are putting pressure on the makers of personal computers, DVD players and portable music players to come up with technology to prevent the machines themselves from playing copyrighted material if someone illegally downloads it or copies it to a blank compact disc. Technology executives claim that what Hollywood is asking for is not feasible and points to the fact that no one has yet invented practical copy protection that could not be cracked. The technology industry also claims that Hollywood’s proposal would slow innovation and potentially stop customers from making legal copies of CDs and other products they own. Lobbying by Disney and other entertainment companies is fueling support for legislation that would require computer and consumer electronics makers to develop a standard for copyright-protection technology or to adopt one imposed by the government. Michael Eisner, chairman of the Walt Disney Company, told lawmakers at a recent hearing, “I believe if you say to these people, ‘you get us a system by December 31 or we’ll do it for you,’ you’ll be surprised at how innovative they’ll become.” Senator Ernest F. Hollings (D-SC), Chairman of the Commerce Committee, said that without technological safeguards, Hollywood may never offer the kind of high-quality programming for digital television and broadband Internet services that would generate consumer interest and, in turn, economic growth. The Senate Judiciary Committee is exploring the disadvantages to consumers of locking up digital media more securely. The chief executives of AOL TimeWarner and Intel are among those scheduled to testify at the third congressional hearing on copyright piracy to be held in April. Credit: New York Times DID YOU KNOW Þ Oregon is the most e-commerce-friendly state in the United States, according to a new report by the Washington-based Progressive Policy Institute that examined how local lawmakers may be helping -- or hindering -- online consumers. Credit: Newsbytes.com Þ Identity fraud was the top fraud complaint reported by consumers last year, according to the Federal Trade Commission, comprising 42 percent of the more than 200,000 consumer fraud complaints the FTC received. Credit: cnetnews.com Þ People accessing the Internet through a high-speed connection accounted for more than half of all time spent online in January, according to a Nielsen/NetRatings report. This is the first time broadband access by-passed dial-up Internet access. Credit: msnbc.com Wrestlers Lose Another Battle in the Effort to Keep WWF.com A U.K. appeals court recently upheld a High Court order directing World Wrestling Federation Entertainment to give up its WWF.com address and to curtail the use of its WWF logo outside the United States. In August 2001, High Court Justice Robin Jacob agreed with the World Wildlife Fund that a 1994 pact over the use of the initials “WWF” outside the United States had been broken by the World Wrestling Federation. Although the Wrestling Federation holds the U.S. trademarks containing the initials “WWF,” the Wildlife Fund complained that the wrestlers were using the initials internationally and dominating with the WWF.com Web site. The Wrestling Federation and the Wildlife Fund first began fighting over the “WFF” initials in 1989. In 1993, the Wildlife Fund filed a lawsuit in Switzerland that ended in an agreement in early 1994 in which the World Wrestling Federation agreed to cancel pending applications for additional WWF trademarks and curtail use of the initials in broadcasting and print outside the United States. In its appeal of Justice Jacob’s order upholding the agreement, the Wrestling Federation argued that the restrictions in the agreement did not encompass the Internet efforts it launched following the agreement and that losing the address of its booming online business would be an over-severe penalty. Nevertheless, the appeals court ruled that the intention of the agreement was to lower the Wrestling Federation’s profile outside the United States and that its popular Web site was more than just a “technical infringement” of the agreement. Credit: Newsbytes.com Online Identity Theft: A Growing Problem In February 2002, Bank of America and e-bay issued warnings to their customers to be careful about giving out confidential information online or over the phone and cautioned that some customers had received fraudulent e-mails claiming to come from the respective companies. In March, several PayPal customers reported receiving fraudulent e-mails that at first appeared to come from the online payment company. In one of the latest examples of identity fraud, scam artists sent e-mails to Wells Fargo’s online customers. The e-mails purported to come from the company. Wells Fargo received reports from dozens of customers saying they received the bogus e-mail. In the most recent version of the scam, customers receive what they think is a message from their bank or Internet service provider, but the links within the e-mail take customers to unaffiliated sites. Such scams continue to be a growing concern. Credit: cnetnews.com Judge Orders Three Websites Closed at Request of FTC Chicago’s U.S. District Court for the Northern District of Illinois, Eastern Division has ordered the Web sites of three companies to be closed on the grounds that the companies used e-mail messages to sell an estimated $1 million worth of nonexistent Web addresses. The Court issued an injunction that suspended the registration of the Web sites www.dotusa.com, www.dotsex.com, and www.dotstore.com. The injunction results from a lawsuit filed by the Federal Trade Commission alleging that the sites have been selling other Web sites using addresses ended in fictional suffixes like “.usa,” “.sex,” and “.store” for $59 each. The FTC complaint named three British companies, TLD Network, Quantum Management, and TBS Industries. Although the companies are based in England, the Web site addresses were registered in the United States, giving the federal court the jurisdiction to order the suspension. This case represents the first legal action filed by the FTC. Over the last several years, the FTC has collected more than 8 million e-mail messages, at a rate of about 10,000 per day. The FTC is currently pursuing more deceptive e-mail cases and may take additional legal action in the future. Credit: New York Times Germany Wins Back Its Internet Name After a two-year fight with a German Internet consulting company, the German government has obtained the right to the Web address www.deutschland.de. According to the manager of Media Net, his company simply gave up the fight for the address to avoid a long and costly legal battle. Media Net had used the deutschland.de address since 1995. Because Internet entrepreneurs often acted more quickly than governments in registering Web addresses, many country Internet addresses have no official connection with the respective country. Credit: uk.news.yahoo.com
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