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International Computer Law Observer
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Date: Thu, 27 Nov 1997 00:59:32 +0200
From: "William S. Galkin"
PREMIER ISSUE ================== =============================== =========================================== INTERNATIONAL COMPUTER LAW OBSERVER December, 1997 -- No.1 =========================================== =============================== ==================
PLEASE FREELY REDISTRIBUTE THIS ISSUE!!!
Welcome to the Premier Issue of the International Computer Law Observer (ICLO). The ICLO is an e-mail report providing monthly coverage of significant legal developments from around the world relating to computers, technology and the Internet. Back issues and a listing of the Editorial Board can be found at http://www.lawcircle.com/observer . The Editor-in-Chief, William S. Galkin, Esq., is located in Ramat Gan, Israel, and can be reached for comments at wgalkin@lawcircle.com .
All current subscribers of the Computer Law Observer are included in the distriubution of the ICLO. To subscribe to the International Computer Law Observer, simply send an e-mail message to listserv@maelstrom.stjohns.edu with the words "subscribe lawobserver" (without the quotation marks) typed into the message area. After subscribing, you will receive a message requesting that you confirm your subscription. You will need to reply "ok" (without the quotation marks) to this message to confirm your subscription. To unsubscribe, follow the same procedure, substituting the word "unsubscribe."
Countries covered in this report:
Australia Austria Belgium Italy Netherlands Philippines South Africa Spain Switzerland United States
--- AUSTRALIA ---
[BOTTOM LINE] NO COPYRIGHT IN THE WORDS OF A COMPUTER LANGUAGE
[WHAT HAPPENED] The Full Federal Court of Australia has ruled that each individual word in a computer program is merely a cipher, that is, a trigger for a set of instructions to be given effect by the computer, and not a computer program in itself. Copyright may subsist in the underlying set of instructions, but not in the trigger word (Powerflex Services Pty Ltd v Data Access Corporation [1997] 490 FCA, 4 June 1997).
[WHY IT HAPPENED] Dr David Bennett set out to create a program for use in the creation and manipulation of databases which would be highly compatible with another application development system called Dataflex. Accordingly, both programs were always going to be functionally similar. The program developed by Dr Bennett, PFXplus, intentionally used the same commands, file structure and function keys as those contained in the Dataflex program to perform the same functions so that persons familiar with the Dataflex program would have no difficulty in transferring to PFXplus.
Of the 296 words in the DataFlex programming language, 192 of them were used in the Powerflex language in a way which instructed the computer ultimately to perform the same functions. However, the set of instructions expressing each of the words in source or object code was completely different for DataFlex and Powerflex. the central issue of the Powerflex case was whether certain commands used in the DataFlex program could be given copyright protection. If the commands were copyrightable, then use of them as commands in the Powerflex program would constitute an infringement of copyright.
[THE SIGNIFICANCE] This case has clarified the essential nature of copyright as it applies to computer software, bringing it more in line with the open systems stance of other countries. It allows Australian software developers to continue to create programs compatible with, or performing similar functions to, products from their competitors without fear of copyright actions.
[INFORMATION SOURCES] http://www.gtlaw.com.au/gt/bin/frameup.cgi/gt/pubs/computerprogramscopyright ...html
[CONTRIBUTING EDITOR] Gilbert & Tobin - Contact: Simon Pollard - e-mail: spollard@gtlaw.com.au
--- AUSTRIA ---
[BOTTOM LINE] MINISTRY OF FINANCE ACCEPTS INTERNET COSTS AS PARTLY DEDUCTIBLE
[WHAT HAPPENED] The Austrian Ministry of Finance published an executive order, dated 30 June 1997 concerning income-tax-law, including various professional expenses. It is of the opinion that the costs to use the Internet will be deductible partly.
[WHY IT HAPPENED] The Ministry acknowledges that an increasing number of tax payers ask for the recognition of the costs to use the Internet as professional expenses deductible from the income subject to tax. It is of the opinion that the rules concerning the recognition of literature as professional expenses shall be applied analogously. According to these an employee is able to deduct costs for technical or specialized literature, but not the costs for works of a general interest, like dictionaries, reference books or encyclopedias. Thus general costs, like the fees paid to providers will not be deductible. However, fees for the use in particular caused by the vocation of the user (e.g.-fees for law data bases incurred by lawyers) are deductible. Corresponding telephone fees will be deductible pro rata of the vocational use. If it is impossible to exactly prove this ratio, the tax authorities have to evaluate these costs by way of estimation.
[THE SIGNIFICANCE] Although this executive order is not binding vis-`-vis the tax-payer as it only gives internal guidelines for the tax administration, it is likely to be followed by the Administrative Court, eventually ruling on tax questions. As the costs for the access of material of vocational interest are accepted as deductible, it is advisable for the user to state in his tax return in detail which kind of material he accessed.
[INFORMATION SOURCE] Oesterreichische Steuerzeitung 1997, 359
[CONTRIBUTING EDITOR] Dorda, Brugger & Jordis - Contact: Winfried Schwarz - e-mail:dbj@aon.at
--- BELGIUM ---
[BOTTOM LINE] NO PROTECTION FOR COMPANY NAMES vs DOMAIN NAMES
[WHAT HAPPENED] In an decision dd. of June 6, 1997, the President of the Commerce Court of Brussels ruled that a company called Capricom Inc. could not be deprived from its rights on a domain name registered with NSI even if such domain name deliberately included a third party's company name (in this case, a well known Belgian company called Tractebel).
[WHY IT HAPPENED] The judge considered that, under Belgian law:
* - there is no specific protection for commercial names since art. 8 of
the Paris Union Convention is not directly applicable in Belgium;
* - the protection granted to company names pursuant to the Belgian
Coordinated Act on Commercial Companies does only apply to use of a company name for designating another company;
* - the registration of a third party's company name as a domain name is to be considered as a "business opportunity" and does not fall within the
scope of the Belgian Unfair Commercial Practices Act.
[THE SIGNIFICANCE] This decision illustrates the difficulty for some jurisdictions to deal with the whole issue of domain names. Since the claimant lodged an appeal against the quoted decision, more details will be given in the future.
[INFORMATION SOURCE] Non-profit organization Droit et Technologies, http://www.lexnet.be/Droit-Technologies/actualites300897.html#_Toc397854339
[CONTRIBUTING EDITOR] Baker & McKenzie - Contact: Daniel Fesler - e-mail: daniel.fesler@bakernet.com
--- ITALY ---
[BOTTOM LINE] ITALIAN REGULATORY AUTHORITY FOR THE STOCK MARKET AUTHORIZES TECHNICAL ANALYSIS VIA INTERNET
[WHAT HAPPENED] Answering a precise query that had been put to it, the CONSOB (Commissione Nazionale per le Societ` e la Borsa) made the ruling that the broadcasting of a service via Internet offering technical analysis of financial markets to subscribers does not require authorization.
[WHY IT HAPPENED] Daily access to the viewing of charts indicating the performance of indices and financial instruments, accompanied by brief comments of technical type, such as overbought contract or resistance at a price of x, is, in fact, freely permitted. Article 66, section 2, sub-section b) of Legislative Decree 415/96 (code Eurosim) did in fact explicitly repeal article 25 of Law 1/1991, according to which the announcement and marketing of services made possible by computer or video devices required authorization by the CONSOB.
In the present situation, despite encouraging signs of change, consultancy on financial investment appears to be the only service of financial type to be recognized by CONSOB even when it is made available via Internet.
[THE SIGNIFICANCE] Legislation in Italy is therefore far behind that in the United States, which, for instance, allows companies to advertise a public stock offer on Internet without the assistance of intermediaries and with very simple procedures, with brokers on line ready to take orders from investors, putting them directly in touch with markets.
[INFORMATION SOURCES] CONSOB communication No. DAL/RM/97004888 dated 3 June 1997 (in French)
[CONTRIBUTING EDITOR] University of Pisa, Umberto Placanica. Contact: Professor Antonio Martino - e-mail: martino@dsp.unipi.it
--- NETHERLANDS ---
[BOTTOM LINE] SHRINK-WRAP LICENCES HELD INVALID
[WHAT HAPPENED] In a recently published decision, the District Court of Amsterdam ruled on the validity under Dutch law of a shrink-wrap licence agreement.
[WHY IT HAPPENED] A shrink-wrap licence is a set of terms and conditions used by the producer/copyright holder of software, which are included in the package containing the diskettes with mostly standard software. The idea is that the end user is bound by these licensing conditions the moment he opens the package. The Amsterdam court held, however, that the mere unwrapping of the cover does not in itself lead to an agreement being concluded between the end user and the producer/copyright owner. In order to reach agreement, the end user must be made aware, prior to buying the software, that he is entering into a licence agreement this way. He must also know what the conditions of such agreement are beforehand. (Amsterdam District Court, 24 May 1995, Computerrecht 1997/2).
[THE SIGNIFICANCE] The form in which shrink-wrap licences are generally used, does not as a rule comply with the above provisions. These licences are thus not enforceable. Under Dutch copyright law, the lawful acquirer of the software automatically obtains the right to use the software, and this right cannot be taken away from him. Therefore, he has no need for an explicit licence from the producer/copyright owner. If the producer/copyright owner nevertheless wants to enforce his conditions, he should make sure that the above requirements set out by the court are complied with. By obliging the retailers not to sell to end users who do not agree to the conditions of the licence, the producer/copyright owner will have even more certainty.
[CONTRIBUTING EDITOR] Nauta Dutilh [ http://www.nautadutilh ] - Contact:Ruprecht Hermans - e-mail: hermanr@ams.nautadutilh.nl
--- PHILIPPINES ---
[BOTTOM LINE] NTC ISSUES LICENSE TO BELLTEL
[WHAT HAPPENED] After three years, the National Telecommunications Commission (NTC) yesterday finally granted a provisional authority (PA) to Bell Telecommunication Phils., Inc. (BellTel) to operate in some areas in Metro Manila, special economic zones and autonomous regions.
[WHY IT HAPPENED] In a 15 page order signed by Deputy Commissioners Fidelo Q. Dumlao and Consuelo S. Perez, NTC noted that despite the on-going rollout plan of the government, there are still 212 municipali- ties remaining to be unserved, and that a new player is needed to fill up the gap in these areas.
Thus, BellTel was granted a license to operate an international gateway facility (IGF), inter-exchange carrier facility and local exchange service in Metro Manila areas, ecozones and autonomous regions nationwide.
NTC Chief Simeon L. Kintanar, who was the proponent of the service area scheme (SAS) which is now implemented under the government's Basic Telephone Program, issued a dissenting opinion.
He cited the three reasons for dismissing BellTel's application--- the application is contrary to law and the government's policy on telecommunications; it is totally unsupported by the evidence presented or available to the Commission; and it constitutes an undue and unwarranted preference in favor of the applicant in the case, in violation to existing laws.
However, the order noted the Commission felt that the timeliness of the present application jibes with the policies provided under Republic Act 7925 and Executive Order 109 mandating the provisioning of basic telephone services to unserved and underserved areas.
In Metro Manila, BellTel was authorized to operate in the cities of Muntinlupa, Las Pinas, Pasig, Mandaluyong, Makati, Pasay and municipalities of Paranaque, Pateros, Taguig, Marikina, and San Juan.
The areas given to BellTel is seen to conflict with the service areas given to GLOBE Telecom and Smart Communications Inc. GLOBE Telecom is assigned to install telephone lines in Makati, Mandaluyong, San Juan, Pasig, and Marikina; while Smart is assigned Las Pinas, Muntinlupa, Paranaque, Pasay City, Pateros and Taguig.
[THE SIGNIFICANCE] GLOBE and Smart are among the staunch oppositor to BellTel's entry as a third player in the industry, along with other carriers Capitol Wireless Inc. (CAPWIRE), International Communications Corp. (ICC), Isla Communications Co. Inc., Pilipino Telephone Corp. (PILTEL), Philippine Long Distance Telephone Co. (PLDT), Philippine Telegraph and Telephone Corp. (PT&T) and Radio Communications of the Phils. Inc. (RCPI) among others.
The application of BellTel has provided for a three-tiered implementation schedule within a span of 10 years. Phase I will be implemented in 3 years; second phase in 4 years; and the third phase in 3 years.
Under the first phase, BellTel is required to install a total of 888,500 telephone lines, up to 2.6 million lines by the end of the tenth year.
Its plant locations are expected to be established in all parts of the country and these plants range from satellite stations to microwave stations and cell stations.
Meanwhile, GLOBE and Smart officials said they would contest the NTC decision to the Court of Appeals, noting that the grant of the PA goes against the government-mandated service area scheme, which was now assigned to 1 players, each operating in a limited area.
[INFORMATION SOURCE] MMV of Manila Bulletin, Thurs., Oct. 30, 1997
[CONTRIBUTING EDITOR] University of the Philippines Law Center - Contact: Leo B. Malagar - e-mail: iils@nicole.upd.edu.ph
--- SOUTH AFRICA ---
[BOTTOM LINE] COURT GIVES NO SANCTION FOR ONLINE GAMBLING
[WHAT HAPPENED] Johannesburg, Gauteng Province, South Africa - In South Africa's first Internet related judgment, the Witwatersrand division of the High Court of South Africa ruled in late October 1997 that it would not sanction online gambling in its jurisdiction [Ruben Olivier v The Minister of Safety and Security and the MEC for Safety and Security of the Province of Gauteng]
[WHY IT HAPPENED] The cyber cafe had brought an application to court for the return of certain computer equipment comprising of a number of networked personal computers, the network server and certain peripherals following on the search of the cafe's premises and the seizure of the computer equipment.
In refusing the application, the Court held that it was lawful for the South African Police to impound computer equipment owned by a cyber cafe, which was allegedly being used for online gambling.
In terms of existing legislation, Internet gambling is illegal and the owner of the site is in contravention of national and provincial Gambling Acts, where they exist.
[THE SIGNIFICANCE] Many experts have indicated that this case is indicative of the controversy and complexity surrounding the issue of regulating Internet related transactions. Local gambling experts argue that the proliferation of online gambling threatens to undermine the development of a legal casino industry in South Africa at a time when companies are vying with one another for casino licenses. Many such companies are investing billions of rands in setting up in infrastructure development, but are threatened with competition from Internet gambling site operators who can set up shop online with ease.
[INFORMATION SOURCES] Cape Times Newspaper, 27 October 1997 edition 2.) Michael Silber - Werksmans attorneys
[CONTRIBUTING EDITOR] Hofmeyr Herbstein Gihwala, Inc. - Contact: Lance Michalson - e-mail: lbm@hofmeyr.co.za
--- SPAIN ---
[BOTTOM LINE] SPANISH GOVERNMENT LIBERALISES THE NATIONAL INTRANET SERVICE
[BOTTOM LINE] Spanish Government decided at the beginning of September 1997 to liberalize the Infovia service, a national intranet which also allows telecom providers to communicate their subscribers with any of the 300 Internet Service Providers (ISP) based in Spain.
The Infovia service, so far a monopoly of telecom company Telefonica, has been a big success as it allows any telephone subscriber to connect to the Internet at the same rate in any point of the country. ISP's have been also favored as they do not need to establish local access points in every Spanish city. Internet users in Spain can access their ISP by simply dialing 055 at the cost of a local call in any point of the country. Once liberalized, Telefonica will not be required any more to offer a universal Infovia service, and will be able to establish different rates depending on the place where the Internet user is located.
[WHY IT HAPPENED] The first competitor of Telefonica in this service will be Retevision, the second telecom operator in Spain in which Telecom Italia holds a 20% stake. Telecom operator Euskaltel, owned by the Basque regional Government, is also preparing a similar project which will also have a Basque Intranet as its main attraction.
[THE SIGNIFICANCE] Data telecommunications were liberalized in Spain in 1992, which allows ISPs based in Spain to lease lines with any of the major operators, mainly Telefonica, BT Telecomunicaciones, Sprint and Uunet. The Infovia service was considered similar to voice communications and was a monopoly of Telefonica. BT had threatened last year to go to court because of what it considered an unfair discrimination.
[CONTRIBUTING EDITOR] Contact: Jose Antonio del Moral - e-mail: berrinet@bigfoot.com
--- SWITZERLAND ---
[BOTTOM LINE] NEW TELECOMMUNICATIONS LAW TO TAKE EFFECT JANUARY 1, 1998
[WHAT HAPPENED]The Swiss Federal Council decided that the new Telecommunications Law (LTC2) of April 30, 1997 (http://www.admin.ch/bakom/tc/fmg2/e/fmg2_30.4.97.htm), will enter into force on January 1, 1998. In addition, it enacted a packet of five new ordinances to the LTC2.
According to article one, the aim of the law is to ensure that a range of cost-effective, high quality and nationally and internationally competitive telecommunications services is available to private individuals and the business community. Furthermore, it shall in particular ensure that a reliable universal service is provided, at affordable prices, for all sections of the population in all parts of the country and allow effective competition in the provision of telecommunications services. Among other things the LTC2 contains rules concerning
[WHY IT HAPPENED]The Federal telecommunications undertaking is required to provide the universal service within the meaning of Article 16(1) over the whole national territory for five years from the entry into force of this Law.
[THE SIGNIFICANCE] The new law represents a major step towards the liberalization of the Swiss telecommunications market. It will enter into force simultaneous with the new regulations of the European Union and will bring in line the Swiss law with the provisions of the WTO.
[INFORMATION SOURCES] See http://www.admin.ch/bakom (Federal Office for communications) for further details.
[CONTRIBUTING EDITOR] - Contact: Fridolin M.R. Walther - e-mail: fridolin.walther@yale.edu - http://www.cx.unibe.ch/civpro./short.html.
--- UNITED STATES---
[BOTTOM LINE] SUN MICROSYSTEMS FILED SUIT ALLEGING MICROSOFT MISUSING JAVA
[WHAT HAPPENED] Sun Microsystems filed suit on October 7 against Microsoft alleging that Microsoft is misusing Sun's Java programming language and execution environment. Sun alleged breach of contract, trademark infringement, false advertising, and unfair competition and is asking for injunctions and $35 million in damages. (Sun Microsystems, Inc. v. Microsoft Corporation, DC NDCA No. C-97-20884 PVT).
[WHY IT HAPPENED] Sun alleges that, among other license violations, Microsoft's Internet Explorer 4.0 ("IE")contains modifications of Sun's application programming interfaces ("API's") in the Java Class Libraries that render programs written by third parties for the Java API's in IE inoperable on any non-Microsoft platform. This undermines Sun's "write once, read anywhere" commitment for Java. Sun's Java technology license requires channel partners to confirm the compatibility of their Java programs with Sun's Java by running Sun's test suite and also to implement Sun's Java virtual machine (a software layer that runs on top of the user's operating system and that interprets Java "applets"). Sun claims that while all channel partners, including Microsoft, agreed to these terms, Microsoft's IE version of Java fails the test suite and Microsoft did not include in IE several key elements of the Java virtual machine.
[THE SIGNIFICANCE] If Java becomes a true 'lingua franca' language as Sun intends, it will severely reduce Microsoft's hold on key software market segments and make it much harder for Microsoft to achieve dominance in the business systems and applications markets. However, if Microsoft can create an alternative version of Java, it would reduce Java's significance as an application platform and even eliminate Sun's proprietary version. Sun claims that the purpose of the suit is only to "bring Microsoft into compliance." For now, IE 4.0 is still being distributed with the Microsoft version of Java. It is interesting to read the licenses and imagine what the parties were thinking during negotiations.
[INFORMATION SOURCES] For Sun's amended complaint, the Sun-Microsoft Technology License and Distribution Agreement, and the Sun-Microsoft Trademark License for Java Compatible Logo: www.java.sun.com/aboutjava/info/complaint.html For Microsoft's answer to Sun's complaint: www.microsoft.com/corpinfo/java/java2.htm For other statements, see the above as well as: www.sun.com/announcement/legal.html
[CONTRIBUTING EDITOR] Chadbourne & Park - - Contact: Barry Nemmers- e-mail:barry.nemmers@chadbourne.com . ```
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