An Analysis of the Impact of Electronic Commerce On Intellectual Property
By
SIMON N. CHE (Managing Partner, Ngu and co law firm
P. O. BOX 2250 Douala Cameroon, E-mail: simon@nguandco.com
website: www.nguandco.com
Introduction to electronic commerce and intellectual property.
Overview of electronic commerce
The evolutions in Internet technologies and their use by an ever-increasing number of people and businesses in the world has led to the rapid expansion and vulgarisation of electronic commerce. This has forced not only businesses but almost all other areas of human activities to try to adjust to the new exigencies and opportunities brought about by the Internet and the related technologies.
The term electronic commerce is commonly used in common parlance to refer to a broad class of activities, which are generally understood to be associated with the use of a computer and the Internet to buy and sell goods and services in a new, direct and electronic manner. The Internet provides the virtual marketplace for buying and selling, trading, advertising and transactions of all kinds. Like with most other areas this expansion of electronic commerce has had a very significant impact on intellectual property.
The concept of electronic commerce is better explained by addressing separately its two constitute words i.e. “Electronic “ and “Commerce”. The term electronic refers to the global infrastructure of computers and telecommunication technology and networks upon which the processing and transmission of digitised data take place. This could be private and proprietary networks or open networks with non-proprietary protocols such as the Internet. [1]
The Internet unlike the private and proprietary networks allows communication and transactions to take place over an “open network” with no required security apparatus between potentially unlimited numbers of participants who may have had no pre-existing contacts. The open nature of the Internet along with its multifunctional character and the increasingly low cost of accessing it has galvanized the potential for electronic commerce.
The Internet also provides access to a digital medium in which many perfect copies of the text, images, and sound can be easily made and transmitted and therefore making it possible for material that is protected by intellectual property laws such as trademarks, copyright and related rights, patents etc to be easily misused and thus posing new challenges for intellectual property owners and lawmakers concerned with legislating in the area of intellectual property.
The word “commerce” as used in electronic commerce refers to an expanding array of activities taking place on the open networks. Examples include but are not limited to buying, selling, trading, marketing, advertising and transactions of all kinds that lead to an exchange of value between two parties. On-line auctions, sale of software, music, pornography are just a few of the millions of products that are commercialised in the virtual marketplace provided by Internet technology. [1]
Overview of intellectual property
Intellectual property law is the area of the law that deals with legal rights associated with the creative effort or commercial reputation and goodwill. The law deters people from copying or taking unfair advantage of the work or reputation of others and provides remedies should this happen. There are several different forms of rights or areas of law giving rise to rights that together constitute what is jointly referred to as intellectual property. These are as follows: trademarks, patents copyright, rights in performances, the law of confidence, registered designs, design rights passing off, trade libel and rights associated with plant and seed varieties protection. [2] For the purposes of this project, I will treat only the intellectual property rights that are remarkably affected by the explosion of the web in general and electronic commerce in particular. These are trademarks, patents, copyright and related rights. However, although the concept of domain names is protected under a different set of laws, I will for the purposes of this dissertation treat it because of the crucial role it plays in the arena of both electronic commerce and the protection of trademarks. Cybersquatting is the term that has been coined for the ever-increasing confusion and tension that exist between the use of domain names on the internet and the protection against copying or taking undue advantage of the rights of registered trademark holders. [3]
Trademarks
A trademark is defined as any sign capable of being represented graphically, which is capable of distinguishing the goods or services of one undertaking from those of other undertakings. [2] Therefore the main functions of a trademark are protection against confusion or deception in the marketplace; protection against unfair competition, an indicator of the origin of products or services; distinguishing of the function of products or services; protection against the dilution of well-known products and services; product identification; an indicator of quality; advertising; distinguishing social status and for commercial exploitation of products and services. Intellectual Property by David Bainbridge [2] provides a more detailed discussion of trademarks.
Domain names
Domain names are a simple form of an Internet address, designed to serve the function of enabling users to locate sites on the Internet in an easy manner. They may be registered in spaces known as “ generic top-level domains”
(gTLDs) such as .com, .org, .net, or in the “country code top-level domains” (ccTLDs) such as .ch for Switzerland , .fr for France, .cm for Cameroon or .uk for the United Kingdom etc.
The use of the domain name system has grown and is continuing to grow very rapidly. Since domain names are easy to remember and use, the domain name system (DNS), the central system for routing traffic on the Internet has assumed a key role in electronic commerce. On the one hand, it facilitates the ability of consumers to navigate the internet to find websites they are looking for, and on the other hand, it facilitates businesses’ ability to promote and an easy to remember name or word which may, at the same time, serve to identify and distinguish the business itself or it’s goods or services and to specify its corresponding online, Internet location. [2]
Following the increase of commercial activities on the Internet, domain names have acquired increasing significance as business identifiers and consequently have come into conflict with the traditional system of business identifiers that existed prior to the Internet and that are protected by intellectual property rights, namely, trademarks and other rights of business identification, geographical indications and the developing field of personality rights. The tension between domain names and intellectual property rights has led to many problems that raise challenging questions.
On the one hand, the Domain Name System (DNS) is largely privately administered and gives rise to registrations that result in a global presence, accessible from anywhere in the world. On the other hand, the intellectual property rights system is publicly administered on a territorial basis and gives rise to rights that are exercisable and enforceable only within the territory concerned. This lack of harmony between the two systems has been exacerbated by some predatory and parasitical practices that have been adopted by some people to exploit the lack of connection between the purposes for which the domain name system was designed and those for which intellectual property protection exists. Examples of such practices include but are not limited to the deliberate, bad faith registration as domain names of trademarks in the hope of being able to sell the domain names to the owners of the trademarks, or simply to take unfair advantage of the reputation attached to the trademarks in issue. [3]
Copyrights and related rights
Copyright is concerned with the protection of literary and artistic works. Copyright is therefore a property right, which subsists in various works, for example, literary works, artistic works, musical works, sound recordings films and broadcasts. Copyright gives the owner of a work that is protected by copyright the exclusive right to do certain things in relation to the which include but are not limited to making a copy, broadcasting or giving a public performance. Anyone else who does any acts restricted by copyright without the permission of the copyright owner may be subject to legal action taken by the owner of the copyright for copyright infringement. However, ownership of copyright is alienable and it can be transferred to another or a licence may be granted by the owner to another, permitting him to do one or more specified acts with the work in question. [2]
Copyright does not protect an idea; it is the expression of an idea that is protected i.e. a tangible form – painting, book etc.
International protection of copyright works is affected mainly through two international conventions i.e. the Berne Copyright Convention [4] and the Universal Copyright Convention [5]. The United Kingdom is a member of both conventions. Both conventions lay down minimum standards of protection to be attained and reciprocity of protection between member countries. The conventions have been responsible for the high level of harmony that now exists on the world stage. Therefore because of agreements under the conventions, it is possible for a foreign citizen to take legal action in the United Kingdom for copyright infringement occurring there as if he or she was a British citizen. The author of copyright is the person who creates the work in which copyright subsists, however, for some type of works, the author is the person by whom the arrangements necessary for the creation of the work are undertaken i.e. an employer. [2]
Patents
A patent is a monopoly right to the exclusive use of an invention and can last for a maximum of 20 years. A patent is a property, which like any other business commodity, may be bought, sold, hired or licensed.
Generally, the purpose of a patent is to provide a form of protection for technological advances. The idea is to provide a reward not only for the creation of an invention but also for the development of an invention to the point at which it is technologically feasible and marketable. The protection and reward are also aimed at promoting additional creativity and encourage companies to continue their development of new technology to the point at which it is marketable, useful to the public and desirable for the public good.
To obtain patent protection the applicant must also show proof of the following:
That the invention is new or novel. The invention should be capable of being considered a new solution to a technological problem. However, there is no requirement for the invention to be represented in a physical embodiment.
That it is non – obvious, that is to say, it must involve an inventive step. The invention must be enough of an advancement to be considered non – obvious by a person having ordinary skills in the art over the state of technology before the invention.
That it is useful, that the invention should be capable of industrial application. [2] The invention must be able to be used on a certain scale in practice i.e. exploitable in industry.
Not all inventions are patentable, to be able to obtain a patent, the applicant must prove that the invention concerns the composition, construction or manufacture of a substance, article or apparatus, or with an industrial type of process, as distinct from artistic creations.
Some categories of inventions are specifically excluded from patentability. These include the following:
Things that exist in nature, which are discovered and not invented,
Machines that defy the laws of nature
Scientific theory,
Mathematical methods,
Schemes, rules or methods, such as those for doing business, performing purely mental acts or playing games,
Methods for medical treatment for humans or animals or diagnostics methods, however, products used in making diagnostics are patentable.
The advantages of taking out a patent are the rights granted by the patent owner by law to exclude all others in the territory covered by the patent from making, using, selling or importing the invention. This, however, does not give the inventor or the owner of the patent the right to use the invention if its use is illegal. The inventor of the owner of patent can prevent others from marketing and profiting from the invention for a period of 20 years from the date on which the application is filed. What this right, granted by the law to the owner of the patent does is give the developer of the technology the right to have it to himself for 20 years in exchange for full disclosure to the public of how to use it. When the patent expires, the technology becomes public property, and the public is free to use it. [2]
Patent protection can be obtained and enforceable only on a country-by-country basis with the exception of some regional arrangements that permit regional protection such as the European Patent Organisation. [6]
There is also an International Agreement administered by the World Intellectual Property Organisation (WIPO), called the Patent Cooperation Treaty (PCT) for the filing, searching, publication and examination of international applications. However, the Patent Cooperation Treaty only makes it easier to obtain patents in the Contracting States by providing for the filing of one international application, which may be subsequently prosecuted in the different designated National or Regional Offices of the States party to the Patent Cooperation Treaty. The granting of patent protection in the respective countries designated in the international application is left to the respective designated Offices. They would require the applicant of the international application to enter a regional phase in the designated Offices concerned and to pay the relevant filing and maintenance fees, with the only exceptions being that the date when the international application was made would be considered as the official filing date and the application will not be re-examined for novelty, inventive step and industrial applicability. The designated Offices will take the filing, search, examination and publication of the international application into consideration. [7]
There is unfortunately no single world patent. Filing, examination, granting of protection, maintenance and the payment of the relevant fees, and enforcement of infringement have to be done on a country-by-country basis. This is generally not only very expensive but is also a very difficult thing to do. Mere failure to pay a yearly maintenance fee in one country will cause the patent to lapse in that country, meaning anyone in that country is free to use it as he or she pleases. With the advent of the Internet, patent disclosure could now be done on the Internet; this would mean a global disclosure of the invention, with all its direct and indirect consequences. Therefore a person who is resident in any country in the world in which the owner of the invention has not been able to seek and obtain the protection of the invention can easily have access to a full disclosure through the Internet and proceed to exploit the invention without the consent of the owner of the invention. Worst still he or she may wish to use the knowledge acquired from the disclosure to obtain patent protection in his or her country of residence without the consent or even the knowledge of the rightful owner of the invention. This poses major problems both for intellectual property in general and patent protection in particular.
This project is aimed at attempting an analysis of some of these problems and providing guidelines for companies involved in on-lines businesses and owners of intellectual property rights in general and patents in particular on how to identify and deal with these problems.
Aims of the project
The use of electronic transactions through the Internet which provides a global medium, not in any manner limited by territorial boundaries is increasingly posing serious problems for acquisition, exploitation and enforcement of well-known forms of intellectual property rights which are enshrined in different pieces of national legislation and international conventions.
The main aims of this project are:
Undertake an analysis of the impact of electronic Commerce transactions on some forms of intellectual property rights i.e. trademarks, domain names, copyright and related rights and patents.
Provide guidelines for companies involved or wishing to set up online businesses, on how to identify and handle issues relating to intellectual property.
To critically appraise the problems and conflicts experienced in the online business community as a result of the overlap between the utilisation of the medium provided by the Internet for online businesses to access global markets at minimal cost and the legal and regulatory restrictions imposed on them by national legislation and international conventions that accord protection to owners of intellectual property rights such as trademarks, copyright and related rights and patent law.
To attempt to provide guidelines on the level of legal compliance required of on-line businesses by national legislations and international conventions dealing with intellectual property law. Compliance will be accessed on the lines of remedies and recommendations so far provided by the World Intellectual Property Organisation (WIPO) [8].
Overview of electronic commerce
The evolutions in Internet technologies and their use by an ever-increasing number of people and businesses in the world as led to the rapid expansion and vulgarisation of electronic commerce. This has forced not only businesses but almost all other areas of human activities to try to adjust to the new exigencies and opportunities brought about by the Internet and the related technologies.
The term electronic commerce is commonly used in common parlance to refer to a broad class of activities, which are generally understood to be associated with the use of a computer and the Internet to buy and sell goods and services in a new, direct and electronic manner. The Internet provides the virtual marketplace for buying and selling, trading, advertising and transactions of all kinds. Like with most other areas this expansion of electronic commerce has had a very significant impact on intellectual property.
The concept of electronic commerce is better explained by addressing separately its two constitute words i.e. “Electronic “ and “Commerce”. The term electronic refers to the global infrastructure of computers and telecommunication technology and networks upon which the processing and transmission of digitised data take place. This could be private and proprietary networks or open networks with non-proprietary protocols such as the Internet. [1]
The Internet unlike the private and proprietary networks allows communication and transactions to take place over an “open network” with no required security apparatus between potentially unlimited numbers of participants who may have had no pre-existing contacts. The open nature of the Internet along with its multifunctional character and the increasingly low cost of accessing it has galvanized the potential for electronic commerce.
The Internet also provides access to a digital medium in which many perfect copies of the text, images, and sound can be easily made and transmitted and therefore making it possible for material that is protected by intellectual property laws such as trademarks, copyright and related rights, patents etc to be easily misused and thus posing new challenges for intellectual property owners and lawmakers concerned with legislating in the area of intellectual property.
The word “commerce” as used in electronic commerce refers to an expanding array of activities taking place on the open networks. Examples include but are not limited to buying, selling, trading, marketing, advertising and transactions of all kinds that lead to an exchange of value between two parties. On-line auctions, sale of software, music, pornography are just a few of the millions of products that are commercialised in the virtual marketplace provided by Internet technology. [1]
Overview of intellectual property
Intellectual property law is the area of the law that deals with legal rights associated with the creative effort or commercial reputation and goodwill. The law deters people from copying or taking unfair advantage of the work or reputation of others and provides remedies should this happen. There are several different forms of rights or areas of law giving rise to rights that together constitute what is jointly referred to as intellectual property. These are as follows: trademarks, patents copyright, rights in performances, the law of confidence, registered designs, design rights passing off, trade libel and rights associated with plant and seed varieties protection. [2] For the purposes of this project, I will treat only the intellectual property rights that are remarkably affected by the explosion of the web in general and electronic commerce in particular. These are trademarks, patents, copyright and related rights. However, although the concept of domain names is protected under a different set of laws, I will for the purposes of this dissertation treat it because of the crucial role it plays in the arena of both electronic commerce and the protection of trademarks. Cybersquatting is the term that has been coined for the ever-increasing confusion and tension that exist between the use of domain names on the internet and the protection against copying or taking undue advantage of the rights of registered trademark holders. [3]
Trademarks
A trademark is defined as any sign capable of being represented graphically, which is capable of distinguishing the goods or services of one undertaking from those of other undertakings. [2] Therefore the main functions of a trademark are protection against confusion or deception in the marketplace; protection against unfair competition, an indicator of the origin of products or services; distinguishing of the function of products or services; protection against the dilution of well-known products and services; product identification; an indicator of quality; advertising; distinguishing social status and for commercial exploitation of products and services. Intellectual Property by David Bainbridge [2] provides a more detailed discussion of trademarks.
Domain names
Domain names are a simple form of an Internet address, designed to serve the function of enabling users to locate sites on the Internet in an easy manner. They may be registered in spaces known as “ generic top-level domains”
(gTLDs) such as .com, .org, .net, or in the “country code top-level domains” (ccTLDs) such as .ch for Switzerland , .fr for France, .cm for Cameroon or .uk for the United Kingdom etc.
The use of the domain name system has grown and is continuing to grow very rapidly. Since domain names are easy to remember and use, the domain name system (DNS), the central system for routing traffic on the Internet has assumed a key role in electronic commerce. On the one hand, it facilitates the ability of consumers to navigate the internet to find websites they are looking for, and on the other hand, it facilitates businesses’ ability to promote and an easy to remember name or word which may, at the same time, serve to identify and distinguish the business itself or it’s goods or services and to specify its corresponding online, Internet location. [2]
Following the increase of commercial activities on the Internet, domain names have acquired increasing significance as business identifiers and consequently have come into conflict with the traditional system of business identifiers that existed prior to the Internet and that are protected by intellectual property rights, namely, trademarks and other rights of business identification, geographical indications and the developing field of personality rights. The tension between domain names and intellectual property rights has led to many problems that raise challenging questions.
On the one hand, the Domain Name System (DNS) is largely privately administered and gives rise to registrations that result in a global presence, accessible from anywhere in the world. On the other hand, the intellectual property rights system is publicly administered on a territorial basis and gives rise to rights that are exercisable and enforceable only within the territory concerned. This lack of harmony between the two systems has been exacerbated by some predatory and parasitical practices that have been adopted by some people to exploit the lack of connection between the purposes for which the domain name system was designed and those for which intellectual property protection exists. Examples of such practices include but are not limited to the deliberate, bad faith registration as domain names of trademarks in the hope of being able to sell the domain names to the owners of the trademarks, or simply to take unfair advantage of the reputation attached to the trademarks in issue. [3]
Copyrights and related rights
Copyright is concerned with the protection of literary and artistic works. Copyright is, therefore, a property right, which subsists in various works, for example, literary works, artistic works, musical works, sound recordings films and broadcasts. Copyright gives the owner of a work that is protected by copyright the exclusive right to do certain things in relation to the which include but are not limited to making a copy, broadcasting or giving a public performance. Anyone else who does any acts restricted by copyright without the permission of the copyright owner may be subject to legal action taken by the owner of the copyright for copyright infringement. However, ownership of copyright is alienable and it can be transferred to another or a licence may be granted by the owner to another, permitting him to do one or more specified acts with the work in question. [2]
Copyright does not protect an idea; it is the expression of an idea that is protected i.e. a tangible form – painting, book etc.
International protection of copyright works is affected mainly through two international conventions i.e. the Berne Copyright Convention [4] and the Universal Copyright Convention [5]. The United Kingdom is a member of both conventions. Both conventions lay down minimum standards of protection to be attained and reciprocity of protection between member countries. The conventions have been responsible for the high level of harmony that now exists on the world stage. Therefore because of agreements under the conventions, it is possible for a foreign citizen to take legal action in the United Kingdom for copyright infringement occurring there as if he or she was a British citizen. The author of copyright is the person who creates the work in which copyright subsists, however, for some type of works, the author is the person by whom the arrangements necessary for the creation of the work are undertaken i.e. an employer. [2]
Patents
A patent is a monopoly right to the exclusive use of an invention and can last for a maximum of 20 years. A patent is a property, which like any other business commodity, may be bought, sold, hired or licensed.
Generally, the purpose of a patent is to provide a form of protection for technological advances. The idea is to provide a reward not only for the creation of an invention but also for the development of an invention to the point at which it is technologically feasible and marketable. The protection and reward are also aimed at promoting additional creativity and encourage companies to continue their development of new technology to the point at which it is marketable, useful to the public and desirable for the public good.
To obtain patent protection the applicant must also show proof of the following:
That the invention is new or novel. The invention should be capable of being considered a new solution to a technological problem. However, there is no requirement for the invention to be represented in a physical embodiment.
That it is non – obvious, that is to say, it must involve an inventive step. The invention must be enough of an advancement to be considered non – obvious by a person having ordinary skills in the art over the state of technology before the invention.
That it is useful, that the invention should be capable of industrial application. [2] The invention must be able to be used on a certain scale in practice i.e. exploitable in industry.
Not all inventions are patentable, to be able to obtain a patent, the applicant must prove that the invention concerns the composition, construction or manufacture of a substance, article or apparatus, or with an industrial type of process, as distinct from artistic creations.
Some categories of inventions are specifically excluded from patentability. These include the following:
Things that exist in nature, which are discovered and not invented,
Machines that defy the laws of nature
Scientific theory,
Mathematical methods,
Schemes, rules or methods, such as those for doing business, performing purely mental acts or playing games,
Methods for medical treatment for humans or animals or diagnostics methods, however, products used in making diagnostics are patentable.
The advantages of taking out a patent are the rights granted by the patent owner by law to exclude all others in the territory covered by the patent from making, using, selling or importing the invention. This, however, does not give the inventor or the owner of the patent the right to use the invention if its use is illegal. The inventor of the owner of patent can prevent others from marketing and profiting from the invention for a period of 20 years from the date on which the application is filed. What this right, granted by the law to the owner of the patent does is give the developer of the technology the right to have it to himself for 20 years in exchange for full disclosure to the public of how to use it. When the patent expires, the technology becomes public property, and the public is free to use it. [2]
Patent protection can be obtained and enforceable only on a country-by-country basis with the exception of some regional arrangements that permit regional protection such as the European Patent Organisation. [6]
There is also an International Agreement administered by the World Intellectual Property Organisation (WIPO), called the Patent Cooperation Treaty (PCT) for the filing, searching, publication and examination of international applications. However, the Patent Cooperation Treaty only makes it easier to obtain patents in the Contracting States by providing for the filing of one international application, which may be subsequently prosecuted in the different designated National or Regional Offices of the States party to the Patent Cooperation Treaty. The granting of patent protection in the respective countries designated in the international application is left to the respective designated Offices. They would require the applicant of the international application to enter a regional phase in the designated Offices concerned and to pay the relevant filing and maintenance fees, with the only exceptions being that the date when the international application was made would be considered as the official filing date and the application will not be re-examined for novelty, inventive step and industrial applicability. The designated Offices will take the filing, search, examination and publication of the international application into consideration. [7]
There is unfortunately no single world patent. Filing, examination, granting of protection, maintenance and the payment of the relevant fees, and enforcement of infringement have to be done on a country-by-country basis. This is generally not only very expensive but is also a very difficult thing to do. Mere failure to pay a yearly maintenance fee in one country will cause the patent to lapse in that country, meaning anyone in that country is free to use it as he or she pleases. With the advent of the Internet, patent disclosure could now be done on the Internet; this would mean a global disclosure of the invention, with all its direct and indirect consequences. Therefore a person who is resident in any country in the world in which the owner of the invention has not been able to seek and obtain the protection of the invention can easily have access to a full disclosure through the Internet and proceed to exploit the invention without the consent of the owner of the invention. Worst still he or she may wish to use the knowledge acquired from the disclosure to obtain patent protection in his or her country of residence without the consent or even the knowledge of the rightful owner of the invention. This poses major problems both for intellectual property in general and patent protection in particular.
This project is aimed at attempting an analysis of some of these problems and providing guidelines for companies involved in on-lines businesses and owners of intellectual property rights in general and patents in particular on how to identify and deal with these problems.
Trademarks
A trademark is defined as any sign capable of being represented graphically, which is capable of distinguishing the goods or services of one undertaking from those of other undertakings. [2] Therefore the main functions of a trademark are protection against confusion or deception in the marketplace; protection against unfair competition, an indicator of the origin of products or services; distinguishing of the function of products or services; protection against the dilution of well-known products and services; product identification; an indicator of quality; advertising; distinguishing social status and for commercial exploitation of products and services. Intellectual Property by David Bainbridge [2] provides a more detailed discussion of trademarks.
Domain names
Domain names are a simple form of an Internet address, designed to serve the function of enabling users to locate sites on the Internet in an easy manner. They may be registered in spaces known as “ generic top-level domains”
(gTLDs) such as .com, .org, .net, or in the “country code top-level domains” (ccTLDs) such as .ch for Switzerland , .fr for France, .cm for Cameroon or .uk for the United Kingdom etc.
The use of the domain name system has grown and is continuing to grow very rapidly. Since domain names are easy to remember and use, the domain name system (DNS), the central system for routing traffic on the Internet has assumed a key role in electronic commerce. On the one hand, it facilitates the ability of consumers to navigate the internet to find websites they are looking for, and on the other hand, it facilitates businesses’ ability to promote and an easy to remember name or word which may, at the same time, serve to identify and distinguish the business itself or it’s goods or services and to specify its corresponding online, Internet location. [2]
Following the increase of commercial activities on the Internet, domain names have acquired increasing significance as business identifiers and consequently have come into conflict with the traditional system of business identifiers that existed prior to the Internet and that are protected by intellectual property rights, namely, trademarks and other rights of business identification, geographical indications and the developing field of personality rights. The tension between domain names and intellectual property rights has led to many problems that raise challenging questions.
On the one hand, the Domain Name System (DNS) is largely privately administered and gives rise to registrations that result in a global presence, accessible from anywhere in the world. On the other hand, the intellectual property rights system is publicly administered on a territorial basis and gives rise to rights that are exercisable and enforceable only within the territory concerned. This lack of harmony between the two systems has been exacerbated by some predatory and parasitical practices that have been adopted by some people to exploit the lack of connection between the purposes for which the domain name system was designed and those for which intellectual property protection exists. Examples of such practices include but are not limited to the deliberate, bad faith registration as domain names of trademarks in the hope of being able to sell the domain names to the owners of the trademarks, or simply to take unfair advantage of the reputation attached to the trademarks in issue. [3]
Copyrights and related rights
Copyright is concerned with the protection of literary and artistic works. Copyright is therefore a property right, which subsists in various works, for example, literary works, artistic works, musical works, sound recordings films and broadcasts. Copyright gives the owner of a work that is protected by copyright the exclusive right to do certain things in relation to the which include but are not limited to making a copy, broadcasting or giving a public performance. Anyone else who does any acts restricted by copyright without the permission of the copyright owner may be subject to legal action taken by the owner of the copyright for copyright infringement. However, ownership of copyright is alienable and it can be transferred to another or a licence may be granted by the owner to another, permitting him to do one or more specified acts with the work in question. [2]
Copyright does not protect an idea; it is the expression of an idea that is protected i.e. a tangible form – painting, book etc.
International protection of copyright works is affected mainly through two international conventions i.e. the Berne Copyright Convention [4] and the Universal Copyright Convention [5]. The United Kingdom is a member of both conventions. Both conventions lay down minimum standards of protection to be attained and reciprocity of protection between member countries. The conventions have been responsible for the high level of harmony that now exists on the world stage. Therefore because of agreements under the conventions, it is possible for a foreign citizen to take legal action in the United Kingdom for copyright infringement occurring there as if he or she was a British citizen. The author of copyright is the person who creates the work in which copyright subsists, however, for some type of works, the author is the person by whom the arrangements necessary for the creation of the work are undertaken i.e. an employer. [2]
Patents
A patent is a monopoly right to the exclusive use of an invention and can last for a maximum of 20 years. A patent is a property, which like any other business commodity, may be bought, sold, hired or licensed.
Generally, the purpose of a patent is to provide a form of protection for technological advances. The idea is to provide a reward not only for the creation of an invention but also for the development of an invention to the point at which it is technologically feasible and marketable. The protection and reward are also aimed at promoting additional creativity and encourage companies to continue their development of new technology to the point at which it is marketable, useful to the public and desirable for the public good.
To obtain patent protection the applicant must also show proof of the following:
That the invention is new or novel. The invention should be capable of being considered a new solution to a technological problem. However, there is no requirement for the invention to be represented in a physical embodiment.
That it is non – obvious, that is to say, it must involve an inventive step. The invention must be enough of an advancement to be considered non – obvious by a person having ordinary skills in the art over the state of technology before the invention.
That it is useful, that the invention should be capable of industrial application. [2] The invention must be able to be used on a certain scale in practice i.e. exploitable in industry.
Not all inventions are patentable, to be able to obtain a patent, the applicant must prove that the invention concerns the composition, construction or manufacture of a substance, article or apparatus, or with an industrial type of process, as distinct from artistic creations.
Some categories of inventions are specifically excluded from patentability. These include the following:
Things that exist in nature, which are discovered and not invented,
Machines that defy the laws of nature , scientific theory,
Mathematical methods,
Schemes, rules or methods, such as those for doing business, performing purely mental acts or playing games,
Methods for medical treatment for humans or animals or diagnostics methods, however, products used in making diagnostics are patentable.
The advantages of taking out a patent are the rights granted by the patent owner by law to exclude all others in the territory covered by the patent from making, using, selling or importing the invention. This, however, does not give the inventor or the owner of the patent the right to use the invention if its use is illegal. The inventor or the owner of a patent can prevent others from marketing and profiting from the invention for a period of 20 years from the date on which the application is filed. What this right, granted by the law to the owner of the patent does is give the developer of the technology the right to have it to himself for 20 years in exchange for full disclosure to the public of how to use it. When the patent expires, the technology becomes public property, and the public is free to use it. [2]
Patent protection can be obtained and enforceable only on a country-by-country basis except for some regional arrangements that permit regional protection such the European Patent Organisation. [6]
There is also an International Agreement administered by the World Intellectual Property Organisation (WIPO), called the Patent Cooperation Treaty (PCT) for the filing, searching, publication and examination of international applications. However, the Patent Cooperation Treaty only makes it easier to obtain patents in the Contracting States by providing for the filing of one international application, which may be subsequently prosecuted in the different designated National or Regional Offices of the States party to the Patent Cooperation Treaty. The granting of patent protection in the respective countries designated in the international application is left to the respective designated Offices. They would require the applicant of the international application to enter a regional phase in the designated Offices concerned and to pay the relevant filing and maintenance fees, with the only exceptions being that the date when the international application was made would be considered as the official filing date and the application will not be re-examined for novelty, inventive step and industrial applicability. The designated Offices will take the filing, search, examination and publication of the international application into consideration. [7]
There is unfortunately no single world patent. Filing, examination, granting of protection, maintenance and the payment of the relevant fees, and enforcement of infringement have to be done on a country-by-country basis. This is generally not only very expensive but is also a very difficult thing to do. Mere failure to pay yearly maintenance fee in one country will cause the patent to lapse in that country, meaning any one in that country is free to use it as he or she pleases. With the advent of the Internet, patent disclosure could now be done on the Internet; this would mean a global disclosure of the invention, with all its direct and indirect consequences. Therefore a person who is resident in any country in the world in which the owner of the invention has not been able to seek and obtain protection of the invention can easily have access to a full disclosure through the Internet and proceed to exploit the invention without the consent of the owner of the invention. Worst still he or she may wish to use the knowledge acquired from the disclosure to obtain patent protection in his or her country of residence without the consent or even the knowledge of the rightful owner of the invention. This posses major problems both for intellectual property in general and patent protection in particular.
This project is aimed at attempting an analysis of some of these problems and providing guidelines for companies involved in on-lines businesses and owners of intellectual property rights in general and patents in particular on how to identify and deal with these problems.
Aims of this project
The use of electronic transactions through the Internet which provide a global medium, not in any manner limited by territorial boundaries is increasingly posing serious problems for acquisition, exploitation and enforcement of well known forms of intellectual property rights which are enshrined in different pieces national legislations and international conventions.
The main aims of this project are:
Undertake an analysis of the impact of electronic Commerce transactions on some forms of intellectual property rights i.e. trademarks, domain names, copyright and related rights and patents.
Provide guidelines for companies involved or wishing to set up on-line businesses, on how to identify and handle issue s relating to intellectual property.
To critically appraise the problems and conflicts experienced in the on-line business community as a result of the overlap between the utilisation of the medium provided by the Internet for on-line businesses to access global markets at minimal cost and the legal and regulatory restrictions imposed on them by national legislations and international conventions that accord protection to owners of intellectual property rights such as trademarks, copyright and related rights and patent law.
To attempt to provide guidelines on the level of legal compliance required of on-line businesses by national legislations and international conventions dealing with intellectual property law. Compliance will be accessed on the lines of remedies and recommendations so far provided by the world Intellectual Property Organisation (WIPO) [8].
Problems and difficulties brought about by the coexistence between traditional intellectual property rights and electronic commerce.
BACKGROUND
Electronic Commerce has brought along profound changes in many if not all areas of life. It has had an extraordinary impact on the architectonics of markets and regulatory structures. Some of the highly challenging and hotly debated issues cut across different sectors of legal interest both at national and international levels. Also the international dimensions of electronic commerce complicate the development of solutions to the various legal subjects affected by e-Commerce at national level. This is due to the extra caution of not ignoring potential cross-border impacts. Although the Intellectual Property field is the most affected by electronic commerce, changes brought about by electronic commerce also have far reaching implications for other areas of law and policy. Some of these issues include but are not limited to Paperless Environment Electronic Contracts, The Internet Jurisdictions and Applicable law and Digital Technology Issues of Enforcement and Privacy.
PROBLEMS
E-Commerce and Intellectual Property law
Because of the vast and ever-expanding nature of the impact of electronic commerce on the above-cited areas of law and policy, I will, for the purposes of this project, be limiting myself to the impact of electronic commerce on the intellectual property field. My focus is on examining problems and difficulties brought onto the traditional legal systems in general and intellectual property law in particular by the international and global character of electronic commerce. While traditional legal systems and intellectual property law are based on notions of sovereignty and territoriality, the Internet on contrast largely ignores these notions. This dissertation addresses the impact of the digital economy in general and electronic commerce in particular on the intellectual property system, namely, trademarks, copyright and related rights, patents, and domain names. Each of these intellectual property disciplines is currently confronted with new issues generated by the emergence of the Internet and electronic commerce. Each of them is now bound to coexist with the rapidly expanding practice of electronic commerce. As would normally be expected this coexistence is not without problems.
Coexistence between electronic commerce and trademarks
The use of trademarks in the content of web sites
Although there has been growing tension as to whether or not a trademark should be registered as a domain name by an on-line business, person or company that is not the owner of the trademark, it can be argued that it is the use made of domain names, and the content of Web sites, which can lead to more infringements and not just registration i.e. registration in itself does not prevent infringement. For example once content is well established and referenced properly by search engines, customers or users will usually arrive at Web site containing the alleged infringing material i.e. trademark or even domain name without using or even noticing the existence of the Domain name.
This therefore is a serious problem for owners of intellectual property rights such as trademarks who are trying to avoid or check infringements of their intellectual property rights over the Internet. In some cases this would mean policing the content of all suspected Web sites on the Internet.
Even if any infringement were found the second and most important problem would be how to enforce such a right, not withstanding problems related to territorial jurisdictions, given that the infringing Web site’s location might not even be known by the owner of the infringed intellectual property right and even if known the intellectual property right infringed might not be registered in the jurisdiction in which there is infringement. Worst still it is not certain whether the insertion of the alleged intellectual property right in the content of the Web site would legally be considered as an infringement under the relevant legal system under consideration.
The use of trademarks as links to web sites
The use of trademarks as links on Web sites also posses a serious threat of abuse and infringement of the rights of owners of trademarks i.e. it could lead to confusion and or dilution of the registered trademark or enable the owner of the Web site on which the link is created to take undue advantage of the trademark.
Electronic commerce is closely linked to the Internet. Internet technology is based on hypertext links from one Web site to another, allowing the user to glide smoothly from one set or form of information to another. Usually in creating links the names of companies or trademarks of companies are used on the site on which the link is created. This kind of usage may take many forms i.e. it can be part of the Uniform Resource Locator or may be the actual registered logo or device of a particular business. Owners of intellectual property rights would also be keen in policing the Internet for this kind of usage so as to make sure that whenever, their trademark is used as a link on other Web sites, it is not used in such a way as to render it generic and therefore losing it’s value as a trademark or cause confusion or take undue advantage of the reputation of the trademark.
The use of trademarks as META TAGS
META TAGS provides one of the most used form through which intellectual property rights in general and trademarks in particular are infringed on the Internet.
A Meta tag is hidden information within a Web site that broadly contains a synopsis of the information contained in the Web site, either in the form of single words, or as sentences. It contains for example all the important words that could be used to search for pages. The information in Meta tags is used mostly by search engines to search how highly the search for a particular term matches the content in the page. Search engines work by sending out spiders to crawl over information in the web and index web pages. A database is then created consisting of a list of words and information on where the words are to be found. The hits are usually rated with the highest scoring hits displayed at the top of the list of hits found by the search engine. If a word is found in the Meta tags it is likely to be rated by the search engine as more relevant and so displayed more prominently in the search result.
Because of the popularity of trademarks, some businesses have been known to use trademarks both registered and unregistered belonging to others in their Meta tags in order to generate business.
The use of Meta tags provides a means for possible trademark infringement and even enables the infringing user to hide the trademark so that it does not appear on his Web site but yet is available for identification by search engines. It is however, possible for a diligent trademark owner to identify hidden usage of his trademark. He can for example search for the trademark by using search engines, and then note the Web sites on which the trademark does not visibly appear. Once he finds the pages with the use of the search engine, he can then view the HTML version of the pages by using the view option on his browser in order to see the terms included in the meta tags i.e. the hidden trademark.
The use of trademarks in e-mails messages
Electronic mailing is also being used to infringe intellectual property rights in general and trademarks in particular. Using trademarks to send Spam e-mail, and therefore falsely indicating that the e-mail emanated from the trademark owner is now a very common form of trademark infringement on the Internet. This posses a serious problem for trademark owners given that their trademarks can be used by third parties to their own advantage and also to destroy the reputation of the rightful owner in the public eye by giving recipients of unauthorized junk e-mail (pornography) the impression that it was sent to them by the trademark owner i.e. hotmail.com or American Online etc. when in fact it is not
The sale of trademarks by search engines – advertisement.
One of the most recent developments in the trademark infringement on the Internet relates to the ways, which search engines work and display advertisements. For example when one types a word into the search engine, banner advertisements automatically appear on the site, most of the times advertising a competitor’s products. The search engine sites make advertising revenue from this form of activity i.e. they sell certain search terms to the highest bidder. When such terms are trademarks the owners of such trademarks contest such use and argue that such practices amount to an infringement of their trademark rights.
Coexistence between electronic commerce and domain names
Domain names are often confused with electronic mail addresses or address references on the World Wide Web, commonly known as Universal Resource Locators (URL). Domain names form a key part of both an e-mail address and a Universal Resource Locator. For example “sbu.ac.uk” is the domain name in both the electronic mail address chengus@sbu.ac.uk and in the Uniform Resource Locator www.sbu.ac.uk.
Domain names are registered in a hierarchical system with a limited number of country code and generic Top Level Domains.
These Top Level Domains are then divided into Second Level Domains, which are further divided into Third Level Domains and so on all in a tree-like structure. At each level of the tree, a computer called a name server is operated to maintain a table of all the names registered under the level. The name server operator has as principal responsibility to direct all enquirers to the desired name on the name server.
Therefore when an Internet user in the United States of America makes a request to view the South Bank University website i.e. www.sbu.ac.uk he is first of all rooted on the World Root (name server) to establish the address of the .uk Top Level Domain server. A subsequent request is then made to the .uk server for the address of the .ac.uk server. A further request at the .ac.uk server for the address of the sbu.ac.uk server will then link the user to www.sbu.ac.uk and enable him to view the content of the desired address and then to link on the other pages of the South Bank University by using the links provided in the content of www.sbu.ac.uk
Over the years and with the rapid expansion of electronic commerce, on-line businesses have because of the obvious marketing and business advantages strongly attached a lot of importance on using words that are associated with the goodwill or popularity of their business such as their business names or their trademarks as part of their domain names. They have also for the same reasons taken positive measures to claim ownership of words that are associated with their businesses and to enforce their rights over such words by stopping other people from taking undue advantage through the use of such words as part of their domain names. This has given raise to clashes between on-line business over a series of issues concerning domain names such as; the legal significance of a domain name registration, cybersquatting and the quest for a clear cut legal solution to the clashes between the rights protected under the notions of domain names and trademarks.
Coexistence between electronic commerce and copyright and related rights
The purpose of this section would be to examine the various forms of practices that are disallowed on grounds of infringement of copyright or related rights in the light of the WIPO Copyrights Treaties and the European Copyright and E-Commerce Directives. It will also examine the liability of Internet Service Providers.
The rapid development of the Internet and the prospects of the information super highway, world – wide telecommunication systems which permit the rapid, indeed virtually instantaneous, transmission of information and entertainment in all media – print, pictures (still and moving) sound and combinations thereof now posses the biggest ever threat on the existence of copyrights. The question now being asked by many owners of copyrights, as well as legal critics is whether the ease of perfect reproduction and manipulation of material in the digital form currently being used by advanced communication systems and the continuous improvement of technology in this area will eventually lead to a fundamental change in copyright law. Also given the almost instantaneous flow of copyright protected material across national boundaries, the intensification of international harmonization of copyright laws is now of major concern to all stakeholders in the area of copyright. However, it should be noted that a large amount of copyright material is placed on the Internet by its authors so that it can be accessed and used freely by others. This is common with government, commercial and other organisations and individuals that wish to draw the attention of others to themselves and their products and to freely provide information about the copyright material to the public. The reasons for such free offers are many and varied i.e. on-line marketing with the aim of acquiring and maintaining customers. As a general principle the existence or otherwise of copyright in what is placed on the Internet will be of no or very little relevance to parties that whose aim is to provide free advertisement of their products or services. Such Internet publication may either contain express permission to access, use and reproduce, or such permission can be implied from the circumstances in which the material is made available.
This is unfortunately not true in all cases. Many people or institutions that publish material on the Internet consider the Internet as a medium of publication and expect that the copyright in the material so published would be protected. To these group of people copyright helps to make a market that would otherwise be limited to those who were unaware of their rights or abilities to copy and is in other words, a vital strand in the creation of a legal environment appropriate for electronic commerce, just as it has always been for those whose business is the creation and publication of entertainment and information products in analogue form such as books, records and films. Therefore, author, designers and publishers of digital material such as scripts and codes for web sites are a new class of owners of intellectual property rights i.e. copyrights with the same rights over their works as an author or a publisher will have over a book.
My main concern with copyright as it relates to electronic commerce is to investigate the protection which the creator of a website is accorded under copyright law. I have also considered the position if the creator of a website has infringed someone else’s copyright in assembling or designing his or her website. The laws protecting the copyright of the creator of a website are the same as the laws protecting copyright in any other kinds of works in which copyrights subsists. For the purpose of this section, I will use the laws of the United Kingdom as examples.
The main piece of legislation in the United Kingdom on copyright is the Copyright Designs and Patents Act 1988 as amended (CDPA) [9]. Under section 16(1) of this Act there are now 6 main exclusive rights arising from ownership of copyright in any protected work. These are as follows; copying, issuing copies of the work to the public, renting or lending the work to the public, performing, showing or playing the work in public, broadcasting the work or including it in a cable programme service and making an adaptation of the work. Section 16(2) of the same Act further provides that any person who without right to do so authorises another to do any of the above acts is himself and infringer as well. Section 16 (3) of the Act precise that acts of infringement may be in relation to the whole of the work or to any substantial part of it. Measuring the substance of what has been taken depends much more on the quality than on the quantity. It follows therefore that if the acts are shown to have been in relation to an insubstantial part of a work then, there is no infringement. The question that I find relevant to owners of on-line businesses or persons involve in electronic commerce that is my main concern in this project is to find out the effect of the various forms of exclusive rights attributable to owners of copyright material in relation to activities on the Internet.
COPYING
Section 17 (2) of the Copyright Design and Patent Act 1988 as amended makes it clear that copying in relation to literary, dramatic, musical and artistic works means reproduction of the work in any material form and includes storage of the work in any medium by electronic means as well as making of copies that are transient or incidental to some other use of the work. This is generally accepted as covering the loading of software into a computer’s RAM and therefore readily extended to the user on the Internet who calls up a web page on a computer screen. Theoretically it also covers the reproduction which occurs on the various computers and servers through which the web page travels as it finds it’s way across the networks to the user’s machine, although if this is not allowed it has the remarkable result that the technical basis of the operation of the Internet itself is illegal. The concept of transient reproduction also embraces activities such as proxy server caching, where by deploying appropriate software technology Internet service providers, librarians, archivists and others make and store on their own servers temporary and regularly updated copies of materials contained on other servers with the purpose of making the information more readily available to their own clients by avoiding congestion at the “live” site. These kind of operations may also amount to the infringing act of storage by electronic means [10].
Consequently there seems to be no doubt, that under the present United Kingdom (UK) law browsing and caching are infringements of copyright unless either there is some form of licence for that act or it can be brought under one of the statutory permitted acts. Since downloading material from a website leads to the production of a fixed and not transient copy, i.e. whether in digital form in one’s computer or floppy disk, or as a hard copy by way of a printout, it is more readily recognised in most legal systems as an infringing reproduction.
Issuing copies of the work to the public.
Section 18 of the CDPA 1988 defines issuing to the public as putting copies into circulation for the first time. This right is however, exhausted by initial sale. The “on demand” nature of the Internet does not look much like the issue of copies to the public, although it might be seen as a form of circulation. The reason for this position is based on the fact that Section I8 of the CDPA 1988 which deals with making copies to the public unlike Section 17 which deals with copying does not make any mention or reference to the notion of “transient copy”. Therefore the copies required for the purposes of Section 18 may therefore be limited to those which are non-transient, which would go beyond mere on – demand transmission. It therefore follows that a user who accesses material and passes it on to another user is not guilty of infringement under Section 18 so long as the transmission is electronic.
Rental or Lending of a work to the Public
Section 18 A (2)(a) of the CDPA 1988 defines rental as making a copy of a work available for use, on terms that it will or may be returned for direct or indirect economic or commercial advantage. i.e. videos or games rental stores. Section 18 A (2)(b) of the CDPA 1988 provides a similar definition for the notion of lending except that unlike with rental the restricted act is performed otherwise than for direct or indirect economic or commercial advantage, and is carried out through an establishment which is accessible to the public. A good example is a library that operates a Public Lending Rights scheme. Also it is important to note that according to Section 18 A (3) of the CDPA 1988, rental and lending do not cover making copies available for the purpose of performance, showing, playing or exhibiting in public or for the purpose of on – the – sport reference use.
The question of main concern to the project as regards rental and lending rights is to find out whether they are applicable to Internet activities. Like with copying, there are again difficulties because of the use of the concept of a “copy”, which is what must be made available, and this is further underlined by the expectation that the copy will be returned. This makes it difficult to fit in with the ordinary usages of the Internet. The requirement that for rental some sort of economic or commercial advantage is necessary while for lending there must be an establishment accessible to the public is not easily applicable in the context of normal Internet services. Also the browser or user on the Internet may be said to be making an on-the-sport reference use of the service, which would mean that the provider was not engaging in rental or lending activities. A further discussion of rental and lending restrictions as they apply to the Internet can be found in the, the European Community (EC) Directive on Rental and Lending Rights and on Piracy [11]
Public performance, showing or playing
Section 19 (2)(b) of the CDPA 1988 defines performance to cover any mode of virtual or acoustic presentation, including by means of a cable programme. There is nothing in this definition that prevents an unauthorised display on a computer screen of the texts of a literary work being a “performance” of that work, and thus constituting infringement provided that it takes place in public. In the case of sound recordings, films, broadcasts and cable programmes, the equivalent form of infringement is playing or showing the work in public [12]. What would prevent this form of infringement from being of much relevance to the Internet, at least in it’s present pattern of usage, is merely the fact that most displays of material do not take place in public. Therefore if a display of such material can be proven to constitute a public display then it would constitute copyright infringement if done without the consent of the copyright owner. It should also be noted that the definition of “public” for this particular copyright purpose is very wide [13]. Therefore the decision of the Spanish Supreme Court in the case of Telstra Corporation Ltd. against Australasian Performance Right Association Ltd. [14] that the non-simultaneous transmission of copyright material to different persons in individual hotel bedrooms require copyright licences is likely going to be the position to be adopted by many other jurisdictions. Gathering together is therefore most likely not going to be required in order to proof a public performance.
Broadcasting or inclusion in a cable programme service
Neither accessing a website nor incorporation of other people’s copyright material thereon can constitute broadcasting, since broadcasting is a wireless technology. However, a question which is of direct relevance is whether enabling a user of one website to link to another site means that the second website is included within the first site or whether the two are simply connected but otherwise independent sites. If they are not independent sites then infringement can be established. For example in has been suggested that the concept of inclusion is apt to catch the situation where one website is linked to another but the first site continues in view on screen by way of a “frame” around the image from the second site [15].
Authorisation to infringe – Internet Service Provider’s liability
Section 16(2) of the CDPA 1988 as amended provides that authorisation of another to infringe any form of copyright is itself infringement. Authorisation is understood to mean sanctioning, approving or countenancing where there is authority or control over those who actually infringe. This form of liability is of obvious relevance to undertakings of businesses such as Internet service providers, universities and other bodies including companies, which set up the facilities on which infringing Internet activity take place. The questions whether such bodies are liable will depend mainly on whether they give express warning to users or customers against use of the equipment for infringing copyright. Therefore in the cases of CBS Inc. v Ames Records & Tapes Ltd. and SBS Songs Ltd v Amstrad Consumer Electronics Plc. it was held that commercial libraries renting out sound recordings and manufacturers of double-headed audio tape decks were not liable despite the fact that their services and products rendered infringement easy and probable [16]. In contrast, in Moorehouse v University of New South Wales, the university which provided photocopying facilities for staff and students in it’s library was found to have authorized infringement of copyright because it had taken no steps to deter such activity. [17]
The appropriate measure of liability for those who provide Internet facilities such as the Napster indices, or machinery such as Rio MPMan player, which enable members of the public to use and enjoy material obtained from the Internet, therefore appears to be whether or not they took measures to keep users aware of the existence of copyright and warned against its abuse either by putting material on the service or downloading it.
Coexistence between electronic commerce and patents
The patent system has played a vital role in promoting the development of the underling technical infrastructure for electronic commerce. Electronic commerce relies principally on the various computer and network technologies, both hardware and software. The market exclusivity provided by the patent protection system has provided a reward for investment and has justified the expenditure in research and development to achieve further technological progress.
However, the new technologies notably the Internet now pose challenges to the conventional legal scheme for patent protection. This will be illustrated by examining some of the many issues associated with digital media and electronic commerce in the context of patent protection.
As noted in chapter 1, patents are granted only to inventions that are novel, involve an inventive step and are useful or industrially applicable. The general rule is that to determine if the requirements of novelty and inventive step are met, the claimed invention is compared with the existing state of the art. The existing state of the art is also referred to as prior art. Prior art or existing art, in electronic form, which exists in cyberspace i.e., published only on the Internet, raises serious questions as to its availability as “prior art” and thus whether it can be applied against an invention for which a patent is sought in determining novelty or inventive step. The questions include, whether that kind of information has become prior art even if it was disclosed on the Internet for only a limited time. Although similar questions have been addressed with respect to prior art published on papers, publication on the Internet may have different implications. Authenticity, veracity and integrity are the critical issues for prior art in cyberspace, because cyber art is considered to be more vulnerable to alterations and modification. The determination of the timing of the disclosure and accessibility of the cyber art to the public, given the networks ‘s capacity for instantaneous dissemination on the international scale, is another major concern. Furthermore, national laws may extend the concept of the prior art to include prior uses. Under such national laws the concept of use of prior art in electronic form will pose problems. Also the above-mentioned questions can also be extended to cover the context of a grace period for public disclosure of an invention before filing a patent application.
Many countries as well as Organisations will have to make modifications to their patent laws in order to cover the problems pose by electronic commerce. For example Japan recently amended its patent law to expressly provide that an invention which was made publicly available online, for example via the Internet, prior to the filing of an application for a patent would constitute a novelty defeating bar. The amendment was also extended to cover, the problem posed by the six months grace period by expressly providing that an invention that was publicly disclosed online would fall within the six-month grace period providing an exception to novelty-destroying disclosures. These amendments to Japan’s patent law became enforceable in January 1, 2000 [18]. Japan’s example is likely going to be followed by many other jurisdictions.
The Internet also raises complex jurisdictional issues as regards patent protection. Conventionally patent protection is provided on a country-by-country basis and the therefore the patent laws of each country or region are enforceable only within the borders covered by the laws in question. However, electronic commerce now provides a means by which patented software for example can be sold and delivered over the Internet internationally. Any infringement action for such a patent would therefore be confronted with serious jurisdictional and choice of law issues. Worst still the first practical issue may be that of even detecting or identifying the infringement of such a patent, given that the unauthorized importation of such a software by means of the Internet, unlike the importation of tangible goods, cannot be detected and stopped by the custom or trading standards authorities.
Other questions particular to patent protection on the Internet may arise in the case where a patented product invention consists of elements that are physically located in different territories. For example in the case of process patents, for a method or process, distinct elements in the claimed process could be performed in different territories. If an alleged infringer operates a system containing all the claimed elements within the territory in which the invention is protected i.e. in the United Kingdom, there would be a straightforward claim/case for infringement. However, the questions of infringement and jurisdiction would be more difficult where a patented invention involves activities in several countries by several individuals. Given this situation, it may not be clear in which jurisdiction the accused infringers are actually using the patented invention. [19]
Coexistence between electronic commerce and trademarks
The use of trademarks in the content of web sites
Although there has been growing tension as to whether or not a trademark should be registered as a domain name by an on-line business, person or company that is not the owner of the trademark, it can be argued that it is the use made of domain names, and the content of Web sites, which can lead to more infringements and not just registration i.e. registration in itself does not prevent infringement. For example once content is well established and referenced properly by search engines, customers or users will usually arrive at Web site containing the alleged infringing material i.e. trademark or even domain name without using or even noticing the existence of the Domain name.
This therefore is a serious problem for owners of intellectual property rights such as trademarks who are trying to avoid or check infringements of their intellectual property rights over the Internet. In some cases this would mean policing the content of all suspected Web sites on the Internet.
Even if any infringement were found the second and most important problem would be how to enforce such a right, not withstanding problems related to territorial jurisdictions, given that the infringing Web site’s location might not even be known by the owner of the infringed intellectual property right and even if known the intellectual property right infringed might not be registered in the jurisdiction in which there is infringement. Worst still it is not certain whether the insertion of the alleged intellectual property right in the content of the Web site would legally be considered as an infringement under the relevant legal system under consideration.
The use of trademarks as links to web sites
The use of trademarks as links on Web sites also posses a serious threat of abuse and infringement of the rights of owners of trademarks i.e. it could lead to confusion and or dilution of the registered trademark or enable the owner of the Web site on which the link is created to take undue advantage of the trademark.
Electronic commerce is closely linked to the Internet. Internet technology is based on hypertext links from one Web site to another, allowing the user to glide smoothly from one set or form of information to another. Usually in creating links the names of companies or trademarks of companies are used on the site on which the link is created. This kind of usage may take many forms i.e. it can be part of the Uniform Resource Locator or may be the actual registered logo or device of a particular business. Owners of intellectual property rights would also be keen in policing the Internet for this kind of usage so as to make sure that whenever, their trademark is used as a link on other Web sites, it is not used in such a way as to render it generic and therefore losing it’s value as a trademark or cause confusion or take undue advantage of the reputation of the trademark.
The use of trademarks as META TAGS
META TAGS provides one of the most used form through which intellectual property rights in general and trademarks in particular are infringed on the Internet.
A Meta tag is hidden information within a Web site that broadly contains a synopsis of the information contained in the Web site, either in the form of single words, or as sentences. It contains for example all the important words that could be used to search for pages. The information in Meta tags is used mostly by search engines to search how highly the search for a particular term matches the content in the page. Search engines work by sending out spiders to crawl over information in the web and index web pages. A database is then created consisting of a list of words and information on where the words are to be found. The hits are usually rated with the highest scoring hits displayed at the top of the list of hits found by the search engine. If a word is found in the Meta tags it is likely to be rated by the search engine as more relevant and so displayed more prominently in the search result.
Because of the popularity of trademarks, some businesses have been known to use trademarks both registered and unregistered belonging to others in their Meta tags in order to generate business.
The use of Meta tags provides a means for possible trademark infringement and even enables the infringing user to hide the trademark so that it does not appear on his Web site but yet is available for identification by search engines. It is however, possible for a diligent trademark owner to identify hidden usage of his trademark. He can for example search for the trademark by using search engines, and then note the Web sites on which the trademark does not visibly appear. Once he finds the pages with the use of the search engine, he can then view the HTML version of the pages by using the view option on his browser in order to see the terms included in the meta tags i.e. the hidden trademark.
The use of trademarks in e-mails messages
Electronic mailing is also being used to infringe intellectual property rights in general and trademarks in particular. Using trademarks to send Spam e-mail, and therefore falsely indicating that the e-mail emanated from the trademark owner is now a very common form of trademark infringement on the Internet. This posses a serious problem for trademark owners given that their trademarks can be used by third parties to their own advantage and also to destroy the reputation of the rightful owner in the public eye by giving recipients of unauthorized junk e-mail (pornography) the impression that it was sent to them by the trademark owner i.e. hotmail.com or American Online etc. when in fact it is not
The sale of trademarks by search engines – advertisement.
One of the most recent developments in the trademark infringement on the Internet relates to the ways, which search engines work and display advertisements. For example when one types a word into the search engine, banner advertisements automatically appear on the site, most of the times advertising a competitor’s products. The search engine sites make advertising revenue from this form of activity i.e. they sell certain search terms to the highest bidder. When such terms are trademarks the owners of such trademarks contest such use and argue that such practices amount to an infringement of their trademark rights.
Coexistence between electronic commerce and domain names
Domain names are often confused with electronic mail addresses or address references on the World Wide Web, commonly known as Universal Resource Locators (URL). Domain names form a key part of both an e-mail address and a Universal Resource Locator. For example “sbu.ac.uk” is the domain name in both the electronic mail address chengus@sbu.ac.uk and in the Uniform Resource Locator www.sbu.ac.uk.
Domain names are registered in a hierarchical system with a limited number of country code and generic Top Level Domains.
These Top Level Domains are then divided into Second Level Domains, which are further divided into Third Level Domains and so on all in a tree-like structure. At each level of the tree, a computer called a name server is operated to maintain a table of all the names registered under the level. The name server operator has as principal responsibility to direct all enquirers to the desired name on the name server.
Therefore when an Internet user in the United States of America makes a request to view the South Bank University website i.e. www.sbu.ac.uk he is first of all rooted on the World Root (name server) to establish the address of the .uk Top Level Domain server. A subsequent request is then made to the .uk server for the address of the .ac.uk server. A further request at the .ac.uk server for the address of the sbu.ac.uk server will then link the user to www.sbu.ac.uk and enable him to view the content of the desired address and then to link on the other pages of the South Bank University by using the links provided in the content of www.sbu.ac.uk
Over the years and with the rapid expansion of electronic commerce, on-line businesses have because of the obvious marketing and business advantages strongly attached a lot of importance on using words that are associated with the goodwill or popularity of their business such as their business names or their trademarks as part of their domain names. They have also for the same reasons taken positive measures to claim ownership of words that are associated with their businesses and to enforce their rights over such words by stopping other people from taking undue advantage through the use of such words as part of their domain names. This has given raise to clashes between on-line business over a series of issues concerning domain names such as; the legal significance of a domain name registration, cybersquatting and the quest for a clear cut legal solution to the clashes between the rights protected under the notions of domain names and trademarks.
Coexistence between electronic commerce and copyright and related rights
The purpose of this section would be to examine the various forms of practices that are disallowed on grounds of infringement of copyright or related rights in the light of the WIPO Copyrights Treaties and the European Copyright and E-Commerce Directives. It will also examine the liability of Internet Service Providers.
The rapid development of the Internet and the prospects of the information super highway, world – wide telecommunication systems which permit the rapid, indeed virtually instantaneous, transmission of information and entertainment in all media – print, pictures (still and moving) sound and combinations thereof now posses the biggest ever threat on the existence of copyrights. The question now being asked by many owners of copyrights, as well as legal critics is whether the ease of perfect reproduction and manipulation of material in the digital form currently being used by advanced communication systems and the continuous improvement of technology in this area will eventually lead to a fundamental change in copyright law. Also given the almost instantaneous flow of copyright protected material across national boundaries, the intensification of international harmonization of copyright laws is now of major concern to all stakeholders in the area of copyright. However, it should be noted that a large amount of copyright material is placed on the Internet by its authors so that it can be accessed and used freely by others. This is common with government, commercial and other organisations and individuals that wish to draw the attention of others to themselves and their products and to freely provide information about the copyright material to the public. The reasons for such free offers are many and varied i.e. on-line marketing with the aim of acquiring and maintaining customers. As a general principle the existence or otherwise of copyright in what is placed on the Internet will be of no or very little relevance to parties that whose aim is to provide free advertisement of their products or services. Such Internet publication may either contain express permission to access, use and reproduce, or such permission can be implied from the circumstances in which the material is made available.
This is unfortunately not true in all cases. Many people or institutions that publish material on the Internet consider the Internet as a medium of publication and expect that the copyright in the material so published would be protected. To these group of people copyright helps to make a market that would otherwise be limited to those who were unaware of their rights or abilities to copy and is in other words, a vital strand in the creation of a legal environment appropriate for electronic commerce, just as it has always been for those whose business is the creation and publication of entertainment and information products in analogue form such as books, records and films. Therefore, author, designers and publishers of digital material such as scripts and codes for web sites are a new class of owners of intellectual property rights i.e. copyrights with the same rights over their works as an author or a publisher will have over a book.
My main concern with copyright as it relates to electronic commerce is to investigate the protection which the creator of a website is accorded under copyright law. I have also considered the position if the creator of a website has infringed someone else’s copyright in assembling or designing his or her website. The laws protecting the copyright of the creator of a website are the same as the laws protecting copyright in any other kinds of works in which copyrights subsists. For the purpose of this section, I will use the laws of the United Kingdom as examples.
The main piece of legislation in the United Kingdom on copyright is the Copyright Designs and Patents Act 1988 as amended (CDPA) [9]. Under section 16(1) of this Act there are now 6 main exclusive rights arising from ownership of copyright in any protected work. These are as follows; copying, issuing copies of the work to the public, renting or lending the work to the public, performing, showing or playing the work in public, broadcasting the work or including it in a cable programme service and making an adaptation of the work. Section 16(2) of the same Act further provides that any person who without right to do so authorises another to do any of the above acts is himself and infringer as well. Section 16 (3) of the Act precise that acts of infringement may be in relation to the whole of the work or to any substantial part of it. Measuring the substance of what has been taken depends much more on the quality than on the quantity. It follows therefore that if the acts are shown to have been in relation to an insubstantial part of a work then, there is no infringement. The question that I find relevant to owners of on-line businesses or persons involve in electronic commerce that is my main concern in this project is to find out the effect of the various forms of exclusive rights attributable to owners of copyright material in relation to activities on the Internet.
COPYING
Section 17 (2) of the Copyright Design and Patent Act 1988 as amended makes it clear that copying in relation to literary, dramatic, musical and artistic works means reproduction of the work in any material form and includes storage of the work in any medium by electronic means as well as making of copies that are transient or incidental to some other use of the work. This is generally accepted as covering the loading of software into a computer’s RAM and therefore readily extended to the user on the Internet who calls up a web page on a computer screen. Theoretically it also covers the reproduction which occurs on the various computers and servers through which the web page travels as it finds it’s way across the networks to the user’s machine, although if this is not allowed it has the remarkable result that the technical basis of the operation of the Internet itself is illegal. The concept of transient reproduction also embraces activities such as proxy server caching, where by deploying appropriate software technology Internet service providers, librarians, archivists and others make and store on their own servers temporary and regularly updated copies of materials contained on other servers with the purpose of making the information more readily available to their own clients by avoiding congestion at the “live” site. These kind of operations may also amount to the infringing act of storage by electronic means [10].
Consequently there seems to be no doubt, that under the present United Kingdom (UK) law browsing and caching are infringements of copyright unless either there is some form of licence for that act or it can be brought under one of the statutory permitted acts. Since downloading material from a website leads to the production of a fixed and not transient copy, i.e. whether in digital form in one’s computer or floppy disk, or as a hard copy by way of a printout, it is more readily recognised in most legal systems as an infringing reproduction.
Issuing copies of the work to the public.
Section 18 of the CDPA 1988 defines issuing to the public as putting copies into circulation for the first time. This right is however, exhausted by initial sale. The “on demand” nature of the Internet does not look much like the issue of copies to the public, although it might be seen as a form of circulation. The reason for this position is based on the fact that Section I8 of the CDPA 1988 which deals with making copies to the public unlike Section 17 which deals with copying does not make any mention or reference to the notion of “transient copy”. Therefore the copies required for the purposes of Section 18 may therefore be limited to those which are non-transient, which would go beyond mere on – demand transmission. It therefore follows that a user who accesses material and passes it on to another user is not guilty of infringement under Section 18 so long as the transmission is electronic.
Rental or Lending of a work to the Public
Section 18 A (2)(a) of the CDPA 1988 defines rental as making a copy of a work available for use, on terms that it will or may be returned for direct or indirect economic or commercial advantage. i.e. videos or games rental stores. Section 18 A (2)(b) of the CDPA 1988 provides a similar definition for the notion of lending except that unlike with rental the restricted act is performed otherwise than for direct or indirect economic or commercial advantage, and is carried out through an establishment which is accessible to the public. A good example is a library that operates a Public Lending Rights scheme. Also it is important to note that according to Section 18 A (3) of the CDPA 1988, rental and lending do not cover making copies available for the purpose of performance, showing, playing or exhibiting in public or for the purpose of on – the – sport reference use.
The question of main concern to the project as regards rental and lending rights is to find out whether they are applicable to Internet activities. Like with copying, there are again difficulties because of the use of the concept of a “copy”, which is what must be made available, and this is further underlined by the expectation that the copy will be returned. This makes it difficult to fit in with the ordinary usages of the Internet. The requirement that for rental some sort of economic or commercial advantage is necessary while for lending there must be an establishment accessible to the public is not easily applicable in the context of normal Internet services. Also the browser or user on the Internet may be said to be making an on-the-sport reference use of the service, which would mean that the provider was not engaging in rental or lending activities. A further discussion of rental and lending restrictions as they apply to the Internet can be found in the, the European Community (EC) Directive on Rental and Lending Rights and on Piracy [11]
Public performance, showing or playing
Section 19 (2)(b) of the CDPA 1988 defines performance to cover any mode of virtual or acoustic presentation, including by means of a cable programme. There is nothing in this definition that prevents an unauthorised display on a computer screen of the texts of a literary work being a “performance” of that work, and thus constituting infringement provided that it takes place in public. In the case of sound recordings, films, broadcasts and cable programmes, the equivalent form of infringement is playing or showing the work in public [12]. What would prevent this form of infringement from being of much relevance to the Internet, at least in it’s present pattern of usage, is merely the fact that most displays of material do not take place in public. Therefore if a display of such material can be proven to constitute a public display then it would constitute copyright infringement if done without the consent of the copyright owner. It should also be noted that the definition of “public” for this particular copyright purpose is very wide [13]. Therefore the decision of the Spanish Supreme Court in the case of Telstra Corporation Ltd. against Australasian Performance Right Association Ltd. [14] that the non-simultaneous transmission of copyright material to different persons in individual hotel bedrooms require copyright licences is likely going to be the position to be adopted by many other jurisdictions. Gathering together is therefore most likely not going to be required in order to proof a public performance.
Broadcasting or inclusion in a cable programme service
Neither accessing a website nor incorporation of other people’s copyright material thereon can constitute broadcasting, since broadcasting is a wireless technology. However, a question which is of direct relevance is whether enabling a user of one website to link to another site means that the second website is included within the first site or whether the two are simply connected but otherwise independent sites. If they are not independent sites then infringement can be established. For example in has been suggested that the concept of inclusion is apt to catch the situation where one website is linked to another but the first site continues in view on screen by way of a “frame” around the image from the second site [15].
Authorisation to infringe – Internet Service Provider’s liability
Section 16(2) of the CDPA 1988 as amended provides that authorisation of another to infringe any form of copyright is itself infringement. Authorisation is understood to mean sanctioning, approving or countenancing where there is authority or control over those who actually infringe. This form of liability is of obvious relevance to undertakings of businesses such as Internet service providers, universities and other bodies including companies, which set up the facilities on which infringing Internet activity take place. The questions whether such bodies are liable will depend mainly on whether they give express warning to users or customers against use of the equipment for infringing copyright. Therefore in the cases of CBS Inc. v Ames Records & Tapes Ltd. and SBS Songs Ltd v Amstrad Consumer Electronics Plc. it was held that commercial libraries renting out sound recordings and manufacturers of double-headed audio tape decks were not liable despite the fact that their services and products rendered infringement easy and probable [16]. In contrast, in Moorehouse v University of New South Wales, the university which provided photocopying facilities for staff and students in it’s library was found to have authorized infringement of copyright because it had taken no steps to deter such activity. [17]
The appropriate measure of liability for those who provide Internet facilities such as the Napster indices, or machinery such as Rio MPMan player, which enable members of the public to use and enjoy material obtained from the Internet, therefore appears to be whether or not they took measures to keep users aware of the existence of copyright and warned against its abuse either by putting material on the service or downloading it.
Coexistence between electronic commerce and patents
The patent system has played a vital role in promoting the development of the underling technical infrastructure for electronic commerce. Electronic commerce relies principally on the various computer and network technologies, both hardware and software. The market exclusivity provided by the patent protection system has provided a reward for investment and has justified the expenditure in research and development to achieve further technological progress.
However, the new technologies notably the Internet now pose challenges to the conventional legal scheme for patent protection. This will be illustrated by examining some of the many issues associated with digital media and electronic commerce in the context of patent protection.
As noted in chapter 1, patents are granted only to inventions that are novel, involve an inventive step and are useful or industrially applicable. The general rule is that to determine if the requirements of novelty and inventive step are met, the claimed invention is compared with the existing state of the art. The existing state of the art is also referred to as prior art. Prior art or existing art, in electronic form, which exists in cyberspace i.e., published only on the Internet, raises serious questions as to its availability as “prior art” and thus whether it can be applied against an invention for which a patent is sought in determining novelty or inventive step. The questions include, whether that kind of information has become prior art even if it was disclosed on the Internet for only a limited time. Although similar questions have been addressed for prior art published on papers, publication on the Internet may have different implications. Authenticity, veracity and integrity are the critical issues for prior art in cyberspace, because cyber art is considered to be more vulnerable to alterations and modification. The determination of the timing of the disclosure and accessibility of the cyber art to the public, given the networks’ capacity for instantaneous dissemination on the international scale, is another major concern. Furthermore, national laws may extend the concept of the prior art to include prior uses. Under such national laws, the concept of the use of prior art in electronic form will pose problems. Also, the above-mentioned questions can be extended to cover the context of a grace period for public disclosure of an invention before filing a patent application.
Many countries, as well as Organisations, will have to make modifications to their patent laws to cover the problems posed by electronic commerce. For example, Japan recently amended its patent law to expressly provide that an invention that was made publicly available online, for example via the Internet, before the filing of an application for a patent would constitute a novelty defeating bar. The amendment was also extended to cover, the problem posed by the six months grace period by expressly providing that an invention that was publicly disclosed online would fall within the six-month grace period providing an exception to novelty-destroying disclosures. These amendments to Japan’s patent law became enforceable on January 1, 2000 [18]. Japan’s example is likely going to be followed by many other jurisdictions.
The Internet also raises complex jurisdictional issues as regards patent protection. Conventionally patent protection is provided on a country-by-country basis and therefore the patent laws of each country or region are enforceable only within the borders covered by the laws in question. However, electronic commerce now provides a means by which patented software for example can be sold and delivered over the Internet internationally. Any infringement action for such a patent would therefore be confronted with serious jurisdictional and choice of law issues. Worst still the first practical issue may be that of even detecting or identifying the infringement of such a patent, given that the unauthorized importation of such software by means of the Internet, unlike the importation of tangible goods, cannot be detected and stopped by the custom or trading standards authorities.
Other questions particular to patent protection on the Internet may arise in the case where a patented product invention consists of elements that are physically located in different territories. For example in the case of process patents, for a method or process, distinct elements in the claimed process could be performed in different territories. If an alleged infringer operates a system containing all the claimed elements within the territory in which the invention is protected i.e. in the United Kingdom, there would be a straightforward claim/case for infringement. However, the questions of infringement and jurisdiction would be more difficult where a patented invention involves activities in several countries by several individuals. Given this situation, it may not be clear in which jurisdiction the accused infringers are actually using the patented invention. [19]
Possible solutions to the problems and difficulties
The position of the World Intellectual Property Organisation
Trademarks
WIPO has taken measures to study the problems relating to the use of trademarks on the Internet. It set up a Standing Committee on the Law of Trademarks, Industrial Designs and Geographic Indications to study the desirability and feasibility of harmonizing national rules concerning the circumstances in which use of a trademark on the Internet constitutes use of a trademark or trademark infringement. The said Standing Committee met in June 1999 to discuss the results of its study. As an outcome of the discussions during the meeting of the Standing Committee, the International Bureau prepared a questionnaire with hypothetical situations concerning legal issues relating to the use of trademarks on the Internet. The questionnaire was to be answered by each delegation based on its national law on trademarks and the Internet. The responses received showed a wide divergence of views on the issues raised. The International Bureau has also prepared and issued a paper on the same subject matter aimed at identifying areas where international cooperation in the framework of WIPO appears to be both necessary and realistically achievable.
Well-known trademarks have been given the special attention that they deserve by WIPO. Well-known trademarks enjoy special protection under Article 6bis of the Paris Convention [20] as well as other regional and international agreements. While there is an international obligation under the above-cited Article 6bis of the Paris Convention to accord protection to Well-known trademarks, there exist no establish treaty definition of what constitutes a Well-known mark. It is left to the appreciation of the competent authority in the country where protection is asserted. Consequently, Well-known marks have been the special target of a variety of abusive practices on the Internet. WIPO has been working to develop provisions for the protection of Well-known marks. The proposed solutions were on the issue were adopted as a Joint Recommendation by the WIPO General Assembly and Paris Union Assembly in September 1999. The provisions clarify, consolidate and supplement the existing international protection of Well-known marks as established by Article 6bis of the Paris Convention and Articles 16.2 and 16.3 of the TRIPS Agreement. Article 2 of the Joint Recommendation contain a list of factors that may be used by a competent authority to determine whether a mark is well-known in its territory. Although the Joint Recommendation does not have the force and effect of a treaty, Member States may consider the use its provisions as guidelines for the protection of Well-known marks.
Article 6 of the Joint Recommendation expressly addresses the hotly debated issue of conflict between trademarks and domain names. According to this provision a domain name shall be deemed to conflict with a Well-known mark at least where that domain name, or an essential part thereof, constitutes a reproduction, an imitation, a translation or a transliteration of the Well-known mark, and the domain name has been used or registered in bad faith. It goes on to precise that it shall be understood that bad faith shall include the cases that are currently known as “cybersquatting”, that is, the registration of a Well-known mark as a domain name, to sell it to the trademark owner. [20]
Domain names
In July 1998, WIPO commenced an extensive international process of consultation commonly referred to as “the WIPO Internet Domain Name Process”. The purpose of the process was to make recommendations to the corporation established for the technical management of the domain name system, the Internet Corporation for Assigned Names and Number (ICANN) on the issues arising out of the coexistence or interface between domain names and intellectual property rights. A report containing the recommendations has been published by WIPO. It is also available online at WIPO’s website [21] Copies have been sent to all member states of WIPO as well as all the non-governmental organizations that are accredited with WIPO as observers. Some of the main recommendations were as follows:
1. The adoption of minimum “best practices” by registration authorities i.e. registrars of domain names, when registering domain names in the generic top level domains (gTLDs). Other recommended practices included, the establishment of a formalized agreement clearly setting forth the rights and obligations of the parties, the collection and availability of accurate and reliable contact details of domain name holders as an essential tool for facilitating the protection of intellectual property rights on the borderless or otherwise anonymous medium of the Internet. These contact details were thought to provide the principal means by which intellectual property owners can contact infringers to be able to take the necessary measures aimed at enforcing their intellectual property rights.
2. The report recommended what is referred to as the “take-down” procedure to be used by registrars. Under this procedure, if the contact details of a domain name holder prove to be inaccurate or unreliable, making it impossible to be used to establish contact with the domain name owner a third party should have the right to serve notification to this effect on the responsible registrar. Upon independent verification of the impossibility of establishing contact, the registrar should be required to cancel the domain name registration.
3. The report recommended that ICANN should adopt a uniform dispute resolution policy under which an administrative dispute-resolution procedure is made available for domain name disputes in all gTLDs. The scope of the administrative procedure will cover cases of bad faith, abusive registration of domain names that violate trademark rights. All other disputes arising within parties will have to be covered by court litigation or other private disputes settlement mechanisms such as arbitration. Also, the administrative procedure should be quick, efficient and cost-effective. The determination under it would be limited to orders for the cancellation or transfer of domain name registration. Decisions arrived at, would be enforced directly, by registration authorities under the dispute-resolution policy, without the need for a court order.
4. It was recommended as a solution to the famous and well-known marks problem that, before the introduction of any new gTLDs , a procedure should be established whereby the owner of a famous well-known mark can obtain an exclusion in some or all the gTLDs for the name of the mark – where the mark is famous or well-known on a wide geographic basis and across different classes of goods or services. The effect of the exclusion would be to prohibit any person other than the owner of the famous or well-known mark from registering the mark as a domain name. This, therefore, gives expression in cyberspace to the special protection that is established for famous and well-known marks in the Paris Convention and the TRIPS Agreement. However, the exclusion covers only the exact name of the famous or well-known mark and since experience shows that cybersquatters usually register many close variations of famous or well-known marks it is was also recommended that an exclusion once granted should give rise to an evidentiary presumption in the administrative procedure addressing abusive registrations. The effect of the evidentiary presumption would be to place the burden of proving justification for use of a domain name on the domain name holder, where the domain name is identical or misleadingly similar to the famous or well-known mark and the domain name is being used in a way that is likely to damage the interests of the owner of the mark.
On October 24, 1999, the ICANN Interim Board approved a Uniform Domain Name Dispute Resolution Policy (UNRP), with accompanying procedural Rules based on the above-cited recommendations made by WIPO [22]. An implementation schedule set up indicated that as of December 1, 1999; complaints could be submitted to dispute resolution providers for disputes involving domain names registered by accredited registrars. WIPO was very instrumental and provided ICANN, their staff and the ICANN drafting committee with both advice and assistance in the preparation of the implementation documents for the introduction of the uniform dispute–resolution policy. However, the final Rules reflect many but not all the comments and suggestions that WIPO provided. Since December 1999, the WIPO Arbitration and Mediation Centre has been providing dispute-resolution services under the UDRP. As an additional initiative, WIPO is now also providing advice to registrars of certain country code top-level domains (ccTLDs) with the possible adoption by them of the uniform dispute-resolution policy recommended in the WIPO Report.
Copyrights and related rights
Some of the copyright and related rights problems and difficulties have been solved by WIPO as well as other International Organizations. So far significant progress has been made with international consensus having already emerged on some issues. In 1996 two treaties were concluded at WIPO aimed at redressing some of these issues. They are the WIPO Copyright Treaty (WCT) [23] and the WIPO Performance and Phonograms Treaty (WPPT) [24]. These treaties are jointly commonly referred to as the “Internet treaties”. The treaties, address the issues of definition and scope of rights in the digital environment, and some of the challenges of online enforcement and licensing.
The most basic right granted by copyright and related rights is the right of reproduction, which under the Berne Convention [4] covers reproduction “in any manner or form”. This right is at the core of electronic commerce because any transmission of a work or an object of related rights presupposes the uploading of that work or object into the memory of a computer or other digital device. In addition, when the work or object is transmitted over networks, multiple copies are made in the memory of network computers at numerous points. It is, therefore, necessary to determine how the reproduction right applies to such copies. The WCT and the WPPT both provide that such uploading into the memory of computers are acts of reproduction. They state that the production right and the exceptions permitted, fully apply to the digital environment in particular to the use of works in digital form. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of both treaties. However, the appropriate application of the reproduction right in the case of temporary copies in computer random access memory (RAM) continues to be the subject of debate at the national and international levels.
The WCT and WPPT also clarify the extent of the right holder’s control when works, performances and phonograms are made available to the public for downloading or access on the Internet. This type of transmission is different from broadcasting, in that the material is not selected and delivered by an active transmitter like a broadcaster to a group of passive recipients. Rather it is transmitted interactively, that is, on-demand from individual users, at a time and place of their choice. The treaties require that an exclusive right be granted to control such acts of “making available” while leaving it to individual countries to decide how to categorize this right under the national law. As to the scope of these exclusive rights, the treaties continue to provide flexibility to individual countries to develop exceptions and limitations that are appropriate to their particular circumstances. The general “three-step” applied to the reproduction right in the Berne Convention and all rights in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) [25] is extended to apply to all rights in the Berne Convention and the two treaties. An important agreed statement clarifies that this test permits countries to extend existing exceptions and limitations into the digital environment or to add new ones, as appropriate.
The WCT and the WPPT also break new ground in recognizing the emerging role to be played by technological protection measures, and the online, management and licensing systems. They require member States to provide two types of technological adjuncts to the protection of copyright and related rights, to ensure that the Internet can become a safe place to disseminate and license protected material. The first technological adjunct is generally referred to as the “anti-circumvention” provision. It relates to the need of right holders to rely on technological measures to protect works against infringement on the Internet. No matter how ingenious the technology used to protect works against unauthorized use, equally ingenious ways may be developed to circumvent it. The resulting level of insecurity could prevent right holders from being willing to disseminate valuable materials on the Internet. Given the inability to achieve total security, a realistic goal is to make the technology sophisticated enough to deter the ordinary consumer from seeking to circumvent, while granting legal redress against those who represent a greater threat i.e. hackers and those engaged in circumvention as a business.
Patents
The World Intellectual Property Organisation has taken some remarkable measures aimed at studying the desirability and feasibility of harmonizing rules concerning the patent law implications of disclosure of technical information on the Internet such as its impact on patentability and the related jurisdictional issues.
The results of studies undertaken on these problems by the Standing Committee on the Law of Patents set up by WIPO to study the problems and come up with solutions are contained in The Draft Patent Law Treaty [26] which has been approved by the WIPO General Assembly and the Paris Union Assembly. However, for this draft Treaty to be enforceable it, first of all, has to be adopted by the Diplomatic Conference of heads of states of member countries of WIPO and then given the force of law in the various countries – accession. This unfortunately is not yet the case.
The position of the European Union.
The European Union has put in place a legal order as a means for affirming the objectives of the Community. Legislation and implementation of European Union law are therefore gaining strong grounds within the Union European with uniform laws already in force among member countries of the union in various areas. Intellectual property and electronic commerce constitute some of the many areas in which legal harmonization has been undertaken.
Trademarks
The European Union has taken a series of regulatory instruments aimed at harmonizing trademark law within the union. These include the following:
Council Directive 89/104 of 21 December 1988 lays down common rules on signs constituting trademarks, ground for refusal or nullity and rights conferred by trademarks [27].
Council Regulation 40 / 94 of December 20 1993 created the Community trademark alongside national trademarks and set up a Community trademark office, which became operational in Alicante in Spain in 1996[28].
Domain names
Domain names have also be considered by the European Union. The main measure taken in this area is certainly Regulation No 733/2002 of the European Parliament and the Council of April 22, 2002, on the implementation of the European Union Top Level Domain (.euTLD). This regulation provides precise rules on important aspects of this domain such as obligations of the registry and dispute resolution
[29].
Copyrights and related rights
In the area of copyright and related rights, the European Union has taken a common stand on most issues. These include the following:
Council Directive 92/100 of 19 November 1992, on the borrowing and lending of works of art [30].
Council Directive 93/83 of 27 September 1993 on cable distribution and satellite broadcasting [31].
Council Directive 93/98 of 29 October 1993 harmonizing the duration of copyright and related rights [32].
Directive on copyright and related rights in the information society adopted on September 28 2000 [33].
The Council’s approval on March 16, 2000, of the World Intellectual Property Organisation Treaty on copyright and the Performance and Phonograms Treaty. The latter treaties ensure a balanced level of protection of copyright works and allow public access to the content available on the Internet [25].
Patents
In the area of Patents, the Luxembourg Agreement of 15 December 1989 created a European patent, which is effective uniformly throughout the European Union and issued by the European Patent Office (EPO) [34].
The Commission Regulation 240/96 of 31 January 1996 harmonised and simplified the rules applicable to patent licences and know-how licences, to encourage the dissemination of technical know-how in the Community and promote the manufacture of technically improved products [35].
Regulation 1610/96 of 23 July 1996 created a supplementary protection certificate for plant protection products. Directive 98/44 of 6 July 1998 protects biotechnological inventions [36]. Harmonization has also been undertaken in the areas of computer programs, [37] Databases, [38] topographies of semiconductors [39].
The position of the World Intellectual Property Organisation
Trademarks
WIPO has taken measures to study the problems relating to the use of trademarks on the Internet. It set up a Standing Committee on the Law of Trademarks, Industrial Designs and Geographic Indications to study the desirability and feasibility of harmonizing national rules concerning the circumstances in which use of a trademark on the Internet constitutes use of a trademark or trademark infringement. The said Standing Committee met in June 1999 to discuss the results of its study. As an outcome of the discussions during the meeting of the Standing Committee, the International Bureau prepared a questionnaire with hypothetical situations concerning legal issues relating to the use of trademarks on the Internet. The questionnaire was to be answered by each delegation based on its national law on trademarks and the Internet. The responses received showed a wide divergence of views on the issues raised. The International Bureau has also prepared and issued a paper on the same subject matter aimed at identifying areas where international cooperation in the framework of WIPO appears to be both necessary and realistically achievable.
Well-known trademarks have been given the special attention that they deserve by WIPO. Well-known trademarks enjoy special protection under Article 6bis of the Paris Convention [20] as well as other regional and international agreements. While there is an international obligation under the above-cited Article 6bis of the Paris Convention to accord protection to Well-known trademarks, there exist no establish treaty definition of what constitutes a Well-known mark. It is left to the appreciation of the competent authority in the country where protection is asserted. Consequently, Well-known marks have been the special target of a variety of abusive practices on the Internet. WIPO has been working to develop provisions for the protection of Well-known marks. The proposed solutions were on the issue were adopted as a Joint Recommendation by the WIPO General Assembly and Paris Union Assembly in September 1999. The provisions clarify, consolidate and supplement the existing international protection of the Well-known mark as established by Article 6bis of the Paris Convention and Articles 16.2 and 16.3 of the TRIPS Agreement. Article 2 of the Joint Recommendation contain a list of factors that may be used by a competent authority to determine whether a mark is well-known in its territory. Although the Joint Recommendation does not have the force and effect of a treaty, Member States may consider the use of its provisions as guidelines for the protection of Well-known marks.
Article 6 of the Joint Recommendation expressly addresses the hotly debated issue of conflict between trademarks and domain names. According to this provision a domain name shall be deemed to conflict with a Well-known mark at least where that domain name, or an essential part thereof, constitutes a reproduction, an imitation, a translation or a transliteration of the Well-known mark, and the domain name has been used or registered in bad faith. It goes on to precise that it shall be understood that bad faith shall include the cases that are currently known as “cybersquatting”, that is, the registration of a Well-known mark as a domain name, to sell it to the trademark owner. [20]
Domain names
In July 1998, WIPO commenced an extensive international process of consultation commonly referred to as “the WIPO Internet Domain Name Process”. The purpose of the process was to make recommendations to the corporation established for the technical management of the domain name system, the Internet Corporation for Assigned Names and Number (ICANN) on the issues arising out of the coexistence or interface between domain names and intellectual property rights. A report containing the recommendations has been published by WIPO. It is also available online at WIPO’s website [21] Copies have been sent to all member states of WIPO as well as all the non-governmental organizations that are accredited with WIPO as observers. Some of the main recommendations were as follows:
1. The adoption of several improves, minimum “best practices” by registration authorities i.e. registrars of domain names, when registering domain names in the generic top level domains (gTLDs). Other recommended practices included, the establishment of a formalized agreement clearly setting forth the rights and obligations of the parties, the collection and availability of accurate and reliable contact details of domain name holders as an essential tool for facilitating the protection of intellectual property rights on the borderless or otherwise anonymous medium of the Internet. These contact details were thought to provide the principal means by which intellectual property owners can contact infringers to be able to take the necessary measures aimed at enforcing their intellectual property rights.
2. The report recommended what is referred to as the “take-down” procedure to be used by registrars. Under this procedure, if the contact details of a domain name holder prove to be inaccurate or unreliable, making it impossible to be used to establish contact with the domain name owner a third party should have the right to serve notification to this effect on the responsible registrar. Upon independent verification of the impossibility of establishing contact, the registrar should be required to cancel the domain name registration.
3. The report recommended that ICANN should adopt a uniform dispute resolution policy under which an administrative dispute-resolution procedure is made available for domain name disputes in all gTLDs. The scope of the administrative procedure will cover cases of bad faith, abusive registration of domain names that violate trademark rights. All other disputes arising within parties will have to be covered by court litigation or other private disputes settlement mechanisms such as arbitration. Also, the administrative procedure should be quick, efficient and cost-effective. Determination under it would be limited to orders for the cancellation or transfer of domain name registration. Decisions arrived at, would be enforced directly, by registration authorities under the dispute-resolution policy, without the need for a court order.
4. It was recommended as a solution to the famous and well-known marks problem that, before the introduction of any new gTLDs , a procedure should be established whereby the owner of a famous well-known mark can obtain an exclusion in some or all the gTLDs for the name of the mark – where the mark is famous or well-known on a wide geographic basis and across different classes of goods or services. The effect of the exclusion would be to prohibit any person other than the owner of the famous or well-known mark from registering the mark as a domain name. This, therefore, gives expression in cyberspace to the special protection that is established for famous and well-known marks in the Paris Convention and the TRIPS Agreement. However, the exclusion covers only the exact name of the famous or well-known mark and since experience shows that cybersquatters usually register many close variations of famous or well-known marks it is was also recommended that an exclusion once granted should give rise to an evidentiary presumption in the administrative procedure addressing abusive registrations. The effect of the evidentiary presumption would be to place the burden of proving justification for use of a domain name on the domain name holder, where the domain name is identical or misleadingly similar to the famous or well-known mark and the domain name is being used in a way that is likely to damage the interests of the owner of the mark.
On October 24, 1999, the ICANN Interim Board approved a Uniform Domain Name Dispute Resolution Policy (UNRP), with accompanying procedural Rules based on the above-cited recommendations made by WIPO [22]. An implementation schedule set up indicated that as of December 1, 1999; complaints could be submitted to dispute resolution providers for disputes involving domain names registered by accredited registrars. WIPO was very instrumental and provided ICANN, their staff and the ICANN drafting committee with both advice and assistance in the preparation of the implementation documents for the introduction of the uniform dispute–resolution policy. However, the final Rules reflect many but not all the comments and suggestions that WIPO provided. Since December 1999, the WIPO Arbitration and Mediation Centre has been providing dispute-resolution services under the UDRP. As an additional initiative, WIPO is now also providing advice to registrars of certain country code top-level domains (ccTLDs) with the possible adoption by them of the uniform dispute-resolution policy recommended in the WIPO Report.
Copyrights and related rights
Some of the copyright and related rights problems and difficulties have been solved by WIPO as well as other International Organizations. So far significant progress has been made with international consensus having already emerged on some issues. In 1996 two treaties were concluded at WIPO aimed at redressing some of these issues. They are the WIPO Copyright Treaty (WCT) [23] and the WIPO Performance and Phonograms Treaty (WPPT) [24]. These treaties are jointly commonly referred to as the “Internet treaties”. The treaties, address the issues of definition and scope of rights in the digital environment, and some of the challenges of online enforcement and licensing.
The most basic right granted by copyright and related rights is the right of reproduction, which under the Berne Convention [4] covers reproduction “in any manner or form”. This right is at the core of electronic commerce because any transmission of a work or an object of related rights presupposes the uploading of that work or object into the memory of a computer or other digital device. In addition, when the work or object is transmitted over networks, multiple copies are made in the memory of network computers at numerous points. It is, therefore, necessary to determine how the reproduction right applies to such copies. The WCT and the WPPT both provide that such uploading into the memory of computers are acts of reproduction. They state that the production right and the exceptions permitted, fully apply to the digital environment in particular to the use of works in digital form. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of both treaties. However, the appropriate application of the reproduction right in the case of temporary copies in computer random access memory (RAM) continues to be the subject of debate at the national and international levels.
The WCT and WPPT also clarify the extent of the right holder’s control when works, performances and phonograms are made available to the public for downloading or access on the Internet. This type of transmission is different from broadcasting, in that the material is not selected and delivered by an active transmitter like a broadcaster to a group of passive recipients. Rather it is transmitted interactively, that is, on-demand from individual users, at a time and place of their choice. The treaties require that an exclusive right be granted to control such acts of “making available” while leaving it to individual countries to decide how to categorize this right under the national law. As to the scope of these exclusive rights, the treaties continue to provide flexibility to individual countries to develop exceptions and limitations that are appropriate to their particular circumstances. The general “three-step” applied to the reproduction right in the Berne Convention and all rights in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) [25] is extended to apply to all rights in the Berne Convention and the two treaties. An important agreed statement clarifies that this test permits countries to extend existing exceptions and limitations into the digital environment or to add new ones, as appropriate.
The WCT and the WPPT also break new ground in recognizing the emerging role to be played by technological protection measures, and the online, management and licensing systems. They require member States to provide two types of technological adjuncts to the protection of copyright and related rights, to ensure that the Internet can become a safe place to disseminate and license protected material. The first technological adjunct is generally referred to as the “anti-circumvention” provision. It relates to the need of right holders to rely on technological measures to protect works against infringement on the Internet. No matter how ingenious the technology used to protect works against unauthorized use, equally ingenious ways may be developed to circumvent it. The resulting level of insecurity could prevent right holders from being willing to disseminate valuable materials on the Internet. Given the inability to achieve total security, a realistic goal is to make the technology sophisticated enough to deter the ordinary consumer from seeking to circumvent, while granting legal redress against those who represent a greater threat i.e. hackers and those engaged in circumvention as a business.
Patents
The World Intellectual Property Organisation has taken some remarkable measures aimed at studying the desirability and feasibility of harmonizing rules concerning the patent law implications of disclosure of technical information on the Internet such as its impact on patentability and the related jurisdictional issues.
The results of studies undertaken on these problems by the Standing Committee on the Law of Patents set up by WIPO to study the problems and come up with solutions are contained in The Draft Patent Law Treaty [26] which has been approved by the WIPO General Assembly and the Paris Union Assembly. However, for this draft Treaty to be enforceable it, first of all, has to be adopted by the Diplomatic Conference of heads of states of member countries of WIPO and then given the force of law in the various countries – accession. This unfortunately is not yet the case.
The position of the European Union.
The European Union has put in place a legal order as a means for affirming the objectives of the Community. Legislation and implementation of European Union law are therefore gaining strong grounds within the Union European with uniform laws already in force among member countries of the union in various areas. Intellectual property and electronic commerce constitute some of the many areas in which legal harmonization has been undertaken.
Trademarks
The European Union has taken a series of regulatory instruments aimed at harmonizing trademark law within the union. These include the following:
Council Directive 89/104 of 21 December 1988 lays down common rules on signs constituting trademarks, ground for refusal or nullity and rights conferred by trademarks [27].
Council Regulation 40 / 94 of December 20 1993 created the Community trademark alongside national trademarks and set up a Community trademark office, which became operational in Alicante in Spain in 1996[28].
Domain names
Domain names have also be considered by the European Union. The main measure taken in this area is certainly Regulation No 733/2002 of the European Parliament and the Council of April 22, 2002, on the implementation of the European Union Top Level Domain (.euTLD). This regulation provides precise rules on important aspects of this domain such as obligations of the registry and dispute resolution
[29].
Copyrights and related rights
In the area of copyright and related rights, the European Union has taken a common stand on most issues. These include the following:
Council Directive 92/100 of 19 November 1992, on the borrowing and lending of works of art [30].
Council Directive 93/83 of 27 September 1993 on cable distribution and satellite broadcasting [31].
Council Directive 93/98 of 29 October 1993 harmonizing the duration of copyright and related rights [32].
Directive on copyright and related rights in the information society adopted on September 28 2000 [33].
The Council’s approval on March 16, 2000, of the World Intellectual Property Organisation Treaty on copyright and the Performance and Phonograms Treaty. The latter treaties ensure a balanced level of protection of copyright works and allow public access to the content available on the Internet [25].
Patents
In the area of Patents, the Luxembourg Agreement of 15 December 1989 created a European patent, which is effective uniformly throughout the European Union and issued by the European Patent Office (EPO) [34].
The Commission Regulation 240/96 of 31 January 1996 harmonised and simplified the rules applicable to patent licences and know-how licences, to encourage the dissemination of technical know-how in the Community and promote the manufacture of technically improved products [35].
Regulation 1610/96 of 23 July 1996 created a supplementary protection certificate for plant protection products. Directive 98/44 of 6 July 1998 protects biotechnological inventions [36]. Harmonization has also been undertaken in the areas of computer programs, [37] Databases, [38] topographies of semiconductors [39].
Proposed legal and technical guidelines for companies involved in or willing to set up electronic commerce:
Trademarks
Since the territory of the Internet is everywhere and nowhere, in particular, a business involved in electronic commerce can potentially be subjected to jurisdictions of foreign countries, with the associated expenses required for it to defend itself overseas in a different language under different laws.
Because of such eventualities, the recommended guideline to be followed by a business that has a website is to avoid suits in remote jurisdictions through any of the following means:
Limiting the purpose of the website to merely posting information about the business i.e. online marketing.
By limiting the interaction of the website to achieve a specific desired objection i.e. specific group of clients, such as interacting only with clients in the United Kingdom.
By refusing to do business within jurisdictions in which it does not wish to get involved with litigation or other legal matters.
By inserting a choice of law clause in all contracts i.e. choosing the laws of a particular jurisdiction, for example, the United Kingdom, as the law applicable for all contracts or transactions.
By making sure the website does not infringe any intellectual property right i.e. trademark, copyright etc.
Make sure they create links only to the home pages of other websites and preferable with the consent express or implied of the owners of the websites with which a link is created.
Avoid infringement of trademarks or copyright through the unlawful insertion of frames and logos of other websites on their website.
Avoid listing intellectual property protected words such as trademarks in their Meta tags. Note the Meta tag is a software parameter within Hypertext Markup Language, where the site creator lists or describes what is available on that particular website.
Finally because everything on the Internet is instantly global, opening online businesses to millions of potential customers but also millions of potential hazards it is recommended that any company involved in electronic commerce should constantly be mindful of all the possible ramifications of every part of their website and respect the intellectual property rights of others.
Domain names
Under the Uniform Domain Dispute Resolution Policy (UDRP), proof of certain aspects is very important to establish or refute a claim over a domain name. It is therefore recommended that companies involved in electronic commerce should always be mindful of the following facts:
Having a registered trademark or rights in a trademark is essential if a party is to be able to claim that a domain registrant is violating that party’s rights by having a particular domain. It is therefore recommended that businesses involved or interested in getting involved in electronic commerce should take necessary measures to obtain trademark rights either by registration or licensing over any word or words to be used as their domain names. It should also be noted that although all word trademarks can be domain names, not all domain names qualify for protection as trademarks i.e. some domain names are not distinctive.
The proof of bad faith on the part of a domain name registrant is very important in any dispute over a domain name. Therefore it is recommended that a business that is involved in electronic commerce should avoid the well-known practice of cybersquatting. This practice can destroy both the profitability and reputation of an otherwise successful business. It constitutes what can be defined as online piracy. Clients will definitely not be willing to deal with pirates, especially not in electronic commerce where trust and confidence are paramount.
The ability to prove a legitimate interest in any claim over a domain name is important. Therefore, the recommended practice for companies involved in electronic commerce is to use words that are protected or associated with their businesses as part of their domain names i.e. it could use the companies trademark, the company’s name etc.
It is recommended that businesses involved in electronic commerce should not use domains that are Non-proprietary Names (INNs). This is a class of unique identifiers for pharmaceutical substances developed by the World Health Organisation (WHO) in coordination with national authorities worldwide i.e. amoxicillin, amfetamine and ibuprofen. This is because, under existing law, it is not allowed to acquire proprietary rights including even trademark rights, in any Non-proprietary names. However, because the domain name registration system makes it possible for anyone to register a domain without restrictions on a first come first served basis, anyone may be able to register an INN as a domain name. Such registrations do not only create confusion among consumers, patients and health professionals but they also present public safety concerns when inaccurate and misleading information is included in the website accessed through a domain name using an INN. Any interested party has the right to serve a notice that a gTLD domain name registration is cancelled on grounds that it is identical to an INN. Such notices can also be filed for ccTLDs.
It is recommended that businesses involved in electronic commerce should not use domains that are names or acronyms of International Organizations (IGOs) i.e. the United Nations, International Monetary Fund, World Trade Organisation etc. Similar protection is available against the registration of such names or acronyms as trademarks in Article 6 of the Paris Convention for the Protection of Industrial Property. This Article expressly prohibits the registration and use of the abbreviations and names of International Intergovernmental Organisations as trademarks or elements of trademarks.
Under the UDRP only personal names that qualify as trademarks are protected from registration as domain names without the authorization of their owners. However, it is recommended that businesses involved in electronic commerce should not use personal names especially of prominent persons as their domain names. This could eventually lead to serious litigation, especially given that the law in this area is still not certain.
It is recommended that businesses involved in electronic commerce should not use domains that are misleading geographical indicators i.e. false descriptions of the geographical sources of goods – such as “Made in Japan” and the misuse of a special class of geographical source indicators used to protect products such as wines i.e. “champagne”. Although such names do not enjoy any specific protection under the rules applied by the UDRP, they are protected under international conventions such as the Paris Convention, the Madrid Agreement and the TRIPs (Trade-Related Aspects of Intellectual Property Rights).
Under the UDRP trade names are not trademarks per se and are not given any special protection. However because trade names enjoy protection at the national level in most countries in the world under a combination of civil and criminal law, commercial law, trade practices, trademark legislation, and common law principles of unfair competition and passing off, it is recommended that businesses involve in electronic commerce should avoid using trade names as their domain names.
It is recommended that companies involved in electronic commerce should avoid using domains that contain the ISO 3166 alpha – 2 code elements – the standardized codes for countries used at the ccTLD level such as “fr” for France, “UK” for the United Kingdom. Such use is not allowed because of any potential confusion or abuse that may arise. For example, a domain name that has “Tesco” at the third level and “UK” at the second level (tesco.uk.com) is undoubtedly misleadingly similar to Tesco.uk or tesco.com and would likely be declared as such in case of any eventual dispute.
Copyrights and related rights
1. Protectable subject matter.
The general rules on copyright apply in the same way to electronic commerce as in usual life. Therefore, all works are protected insofar as they are original and available in a material form – electronic or any other form i.e. the main concern is that a work claiming copyright protection should fulfil the conditions of originality and expression in a particular form.
2. Formalities to obtain copyright protection.
There are no formalities to be fulfilled to obtain copyright protection. The right is generated automatically by the expression of original works in a material form i.e. painting a picture. There is therefore no requirement for registration as is the case with some other forms of intellectual property rights such as trademarks and patents.
3. Content of a website
Copyright covers all the content of a website. Examples include the following: literary works, musical works photographic works, artistic works, pictures, databases, computer programs, motion pictures etc.
4. Rights conferred by copyright protection
Author or owners of copyright in a work hold the exclusive right to use and can prohibit or authorize others to use it, i.e. reproduction in various forms of public performance of the work as in the case of a play or musical work.
5. Works not protected by copyright
Some works are cannot be protected by copyright either because they do not meet the originality and expression in a material form requirement or because the copyright has expired. Copyright in work survives the author and only expires 70 years after the author’s death. After the expiration of this period, anybody is allowed to use the work without asking the owner of the copyright for prior authorization or consent.
What to do to obtain the right to use a copyright-protected work.
Identify the copyright-protected work required to be used i.e. texts, pictures, drawings etc.
Identify the required use to i.e. reproductions, publication, public performance etc.
Check if the work is protected by copyright and that the duration of copyright protection in the work has not expired.
Check if the projected use requires the consent of the author i.e. if it is for private use, research or to criticise the work or any order form of use that is an exemption from copyright then it will not require the author or the owner’s consent.
Identify all the copyright authors or owners
Contact them and negotiate a licence to use the work
It should be noted that contrary to what most people think the consent of the owner of copyright should be obtained for every copyright-protected material, even for simple things such as:
Scanning a picture or text or any other form of work to put it on a website. All pictures, photos and text are generally protected if the condition for copyright protection are fulfilled and the duration of protection has not expired. Therefore if a web designer wants to reproduce any of such works on his website, he is required to ask the copyright owner’s authorization. Usually, this is unfortunately not the case given that people just use photographs or pictures on their websites without bordering to find out the authors not to talk of even obtaining their consent.
The common practice of downloading a work i.e. logos, text etc. from another website and reproducing in one’s own website also requires the consent of the copyright owner.
6. The law concerns hyperlinks and framing
The creation of a link on one’s website to another website does not as a general principle require the authorization of the copyright owner on the linked website. Indeed, one considers that the creator of a website gives his tacit consent to the linking. However, in certain cases, this practice may be considered illegal under other legal rules other than copyright. Linking such as framing may be considered illegal if it misleads the user on the identity of the true owner of the website. Other practices such as deep linking i.e. when a link refers to another page in a website other than the home page, may be considered as an unfair practice. Indeed the calculation of the traffic on a website from which depends on the advertising-income is often based on the number of visits made on the home page.
7. The law as concerns MPEG Audio Layer-3 (MP3)
MP3 is the compression technology commonly used to make digital audio computer files relatively small while maintaining high audio quality. It is the common format used for uploading and downloading on the Internet. From a legal point of view, an MP3 file is a musical work in a specific format, which is covered by copyright protection under the same conditions as any other works. MP3 is not per se illegal but it is the use of the technology that may constitute a copyright infringement. Other possible uses of MP3 are also wealth considering. They are as follows:
Transferring a CD to MP3 files on a computer hard drive. This would be covered by the exception of making a copy for private use, which is available in the legislation applicable in most European countries.
Making available MP3’s on the Internet. The publishing of MP3’s on the Internet is considered to be a communication to the public. It is the author’s prerogative and therefore requires his consent.
Downloading MP3’s from the Internet. The legality of the mere fact of downloading MP3’s is so far still very controversial. On the one hand, some people consider that such a download is covered with the exception of making a copy for private use. In such a situation, the reproduction may be done without the owner’s consent. On the other hand, the act of downloading may be considered as exceeding the limits of the exception for the private copy. Indeed, a download can be realized by different people located at different places at the same time. This type of reproduction should not be considered to be done for private purposes. Given the unclear legislation, it is recommended to avoid such practices.
7. The legal significance of the copyright notice or symbol
The COPYRIGHT notice that appears at the end of most works can merely create a presumption that the person indicated is the copyright owner of the work. The existence or absence of such a notice on a work does not in any way guarantee the existence or absence of rights on a work. Thus in the event of litigation, a copyright notice will make it easier to prove or presume the copyright owner. Therefore the notice is absolutely not mandatory to enjoy copyright protection in a work.
8. The legal significance of works marketed or published with a “copyleft” or “copyfree” notice
The author uses the “copyfree” notice to give a free licence to the user under certain specific conditions mentioned in the work in question. It is therefore recommended that before using such works, users should check the directions for use on the website or given with the CD-ROM to know which uses are allowed by the copyright owner.
9. The legal distinction between “shareware” and “freeware”
While “freeware” is entirely free software, “shareware”, is software distributed for evaluation by the final user. After the trial period, the user is supposed to take a licence or stop the use of the software.
10. The law as concerns databases
A 1996 EU Directive protects databases in Europe. As a general rule, a database can be protected both by copyright and by a sui generis right under the European Union Databases Directive. If the database is original, it can be protected by both a sui generis right and copyright. A database is protected by copyright insofar as the choice and arrangement of the information constitute an original creation. However, if the database is not original, it can only be protected by a sui generis right even if not protectable under copyright. The right protects investors against the re-use of substantial parts of the content of non-creative databases. This right requires a substantial investment of the creator in terms of quantity and or quality for the creation of the database. The owner of the sui generis right is the investor. The duration of the database right is 15 years from the creation of the database. However, this duration is repeated on each substantial investment in the database.
11. The law concerns computer programs
A 1991 European Community Directive protects computer programs, by copyright, as literary works. A computer program is protected if it is original in the sense that it is the author’s own intellectual creation. The exclusive rights of the author include the right to perform or to authorize: reproduction of a computer program, translation, adaptation, arrangement and other alteration of a computer program and distribution, including rental, of a computer program or the copies thereof. It should be noted that the broad definition of reproduction right includes almost every form of use of a computer program. Therefore virtually every use of a computer program will require the author’s authorization in the form of a licence.
Patents
1. It is recommended that companies involved in electronic commerce should take necessary measures to apply for and obtain patent protection for their inventions before, going ahead to exploit the inventions. This will enable them to control and stop infringement by others who try to imitate the invention and by so doing take undue advantage. With the risk of infringement by reverse engineering, research and development in the area of electronic commerce would be worthless to a company if it fails to take necessary measures to get patent protection for its inventions.
Patents can now be granted for inventions concerning financial services, electronic sales, advertising methods, business methods including business methods consisting of processes to be performed on the Internet and the telephone exchange and billing methods.
Because the contemporary practice is to market software products in the form of the computer-readable media, for example, diskettes and CD-ROMS or directly over the Internet, it has become a recommended practice to claim such software-related inventions as a computer-readable medium storing the software that performs the claimed function. This type of claim is commonly referred to in legal parlance as “Beauregard – Type claim ”. Other types of claims include the “Lowry – Type claim”. This is usually formulated to read as follows: “a computer-readable medium storing a data structure, which data structure is interrelated to the medium structurally and functionally. The third type of claim is the “Propagated signal claim” and it usually formulated to read as follows: “a claim to a computer data signal that is embodied in a carrier wave”.
2. It is recommended that an invention should not be published on the Internet before the filing of a patent application because such publication is considered in many jurisdictions as disclosure and therefore a novelty-defeating bar. Also, an invention that was publicly disclosed online would fall within the six months grace period, providing an exception to novelty–destroying disclosures.
Conclusion
Fulfilment of the aims and objectives
The main aim of this project was to undertake an analysis of the impact of electronic commerce on intellectual property and to formulate recommendations and guidelines for companies involved or wanting to be involved in electronic commerce. These recommendations and guidelines provide such businesses with the right approach to take whenever they are confronted with the technical and legal hazards encountered as a result of doing business online. The main recommendations and guidelines are developed in chapter 4.
Further work that could have been covered
Many aspects of intellectual property on the Internet and electronic commerce are of capital importance to electronic commerce in particular and information technology in general. It is therefore an interesting landmine for research. Technological advances have serious legal and technical repercussions on electronic commerce and therefore need to be constantly monitored. Electronic commerce and the law are bound to grow alongside technology even if technology is taking the lead.
If given the time and resources, I would have furthered my research to cover other legal aspects of electronic commerce and the Internet such as Internet jurisdiction, electronic / paperless contracts and online security.
The experience acquired
The project provided a golden opportunity for me to pursue in-depth my interest in some of the legal repercussions of electronic commerce and the Internet, notably intellectual property. It helped me to develop and carry out research on both the main and related issues concerning the subject of my research. On the whole, it was a learning process, which would certainly be beneficial in all my future endeavours.
References:
[1] Charles Oppenheim, The Legal and Regulatory Environment for Electronic Information (1999) Infonortics Ltd.
[2] David Bainbridge, Intellectual Property (1996) Pitman Publishing
[3] Lilian Edwards and Charlotte Waelde, Law and the Internet (2000) Hart Publishing
[4] http://www.ipr-helpdesk.org/t_en/i/print_i_410_en.asp?adt_id=782&ads=99
[5] http://www.unesco.org/culture/laws/copyright/html_eng/page1.shtml
[6] http://www.european-patent-office.org
[7] http://www.uspto.gov/web/offices/pac/dapps/pct/pct.htm
[8] http://www.wipo.org
[9] http://www.hmso.gov.uk/acts/acts1988/Ukpga_19880048_en_1.htm
[10] C Barlas, P B Hugenholtz and A E Burke, The Digital Intellectual Property Practice Economics Report (The Dipper Report) (Esprit Project No 29238, 2000) see also http://www.gip.org/caching.htm
[11] J Reinbothe and S von Lewinski, The EC Directive on Rental and Lending Rights and Piracy (1993), 41-42. Cf Hugenholtz, “ Adapting copyright”, 90
[12] Section 19 (3)(b) of the CDPA 1988
[13] Cornish, Intellectual Property, Para 11.3
[14] Telstra Corporation Ltd. v. Australasian Performance Right Association Ltd (1997) 191 CLR 140 (High Ct of Australia)
[15] Holyoak and Torremans, Intellectual Property Law, 515 and also JJ Fawcett and P Torremans, Intellectual Property and Private International Law (1998) 158 –249
[16] CBS Inc. v Ames Records and Tapes Ltd. (1982) Ch 91 and SBS Songs Ltd v Amstrad Consumer Electronics Plc (1988) AC 1013
[17] Moorehouse v University of New South Wales (1976) RPC 151 (High Ct of Australia)
[18] The Japanese Patent Law, as amended by law no. 41 (May 1999)
[19] http://ecommerce.wipo.int/primer/section3.html
[20] http://www.ipr.helpdesk.org/t_en/i/print_i_410_en.asp?adt_id=802&ads=98
[21] http://wipo2.int/process2/
[22] http://wipo2.int/process2/report/index.html
[23] http://wipo.org/eng/dip1conf/distrib/94dc.htm
[24] http://wipo.org/eng/dip1conf/distrib/95dc.htm
[25] http://wto.org/english/tratop_e/trips_e/t_agm0_e.htm
[26] http://wto.org/english/docs_e/docs_e.htm
[27] Official Journal (EC) L 40, 11/02/1989 Page 1 – Council Directive 89/104 of 21 December 1988, to approximate the laws of the Member States relating to Trademarks.
[28] Official Journal (EC) L 011, 14/01/1994 P. 0001 – 0036 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trademark.
[29] Official Journal (EC) L 113/1, 30/04/2002 Directive 733/2002 of the European Parliament and of the Council of 22 April 2002 on the implementation of the .eu Top Level Domain
[30] Official Journal (EC) L 346, 27/11/1992 Page 61 –66 -Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property
[31] Official Journal (EC) L 248, 06/10/1993 Page 15 –21 -Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights relating to copyright applicable to satellite broadcasting and cable retransmission
[32] Official Journal (EC) L 290, 24/11/1993 P. 0009 – 0013Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights.
[33] Official Journal (EC) L 167, 22/06/2001 Page 10 –19 – Directive 2001/29/EC of the European Parliament and the Council of 22 May 2001 on the Harmonization of certain aspects of copyright and related rights in the information society.
[34] http://www.european-patent-office.org
[35] http://www.eucommittee.be/psge/pdf/TechTransferAg.pdf
[36] Official Journal (EC) L 213/13 0f 30/07/1998 – Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions.
[37] Official Journal (EC) L 122, 17/05/1991 Page 42 – Council Directive 91/250 of 14 May 1991
[38] Official Journal (EC) L 77, 27/03/1996 Page 20 – Council Directive 96/9 of 11 March 1996
[39] http://strong.wp.pl/wp/prawwwo/pdscalon.htm – Council Directive 87/54 of 16 December 1986
[40] http://www.icann.org/udrp/udrp.htm
[41] http://www.rome-convention.org
[42] http://www.ipr-helpdesk.org/t_en/i/print_i_410_en.asp?adt_id=831&ads=98
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