Articles Posted in E-commerce

International e-commerce laws have been evolving since the inception of the information technology age. International e-commerce transactions take place over a network of computers and have become more streamlined with technology advancements. The following topics will be evaluated and addressed in this article: alternative dispute resolution and insurance.

Alternative Dispute Resolution (“ADR”) is an important factor when it comes to international e-commerce transactions. It is much easier to resolve local disputes without geographical challenges. However, that is not the case with international commercial transactions because the parties can be anywhere in the world. So, tracking, identifying, or locating the customer is not an easy task for international commercial transactions and presents jurisdictional issues. In most cases, they are related to contractual disputes for the purchase and sale of products or services. There could be non-contractual disputes such as trademark, copyright, data protection, and domain name disputes. The parties should have the option to engage in mediation or arbitration to resolve the dispute. Mediation is conducted by a neutral expert who renders a non-binding decision after reviewing the file. Arbitration is conducted by a neutral expert who renders a binding decision after reviewing the file. Our international mediation and arbitration attorneys regularly provide professional legal services to clients.

In some European countries, the customers are permitted to file a lawsuit against the e-commerce company in their own country or where the e-commerce company is located even if the company has no business operations therein. For example, in LICRA v. Yahoo, the French courts issued an order against Yahoo, which is based in the United States, to prevent French residents from purchasing Nazi memorabilia through its website.

International e-commerce laws have been evolving since the inception of the information technology age. International e-commerce transactions which take place over the vast network of computers have become more streamlined with the advancement of technology. The following topics will be evaluated and addressed in these series of articles: Intellectual properties, taxes, and alternative dispute resolution.

Intellectual property rights can be protected by registering trademarks, copyrights or patents with governmental agencies. For example, the United States Patent and Trademark Office (“USPTO”) registers patents and trademarks. The United States Copyright Office registers copyrights. However, trade secrets cannot be registered with any government agencies. The trade secret owner is responsible to protect it by taking precautionary steps. International e-commerce and business law attorneys should recommend the following steps to their clients: (1) locate, identify, and mark the trade secrets; (2) restrict access to the trade secrets; (3) sign non-disclosure agreements with the trade secret holders; and (4) restrict access to the trade secrets. The Uniform Trade Secrets Act (“UTSA”) defines a trade secret as information that derives independent economic value because it is not generally known or readily ascertainable and is the subject of efforts to maintain secrecy. It includes formulas, patterns, compilations, programs, devices, methods, techniques, or processes that yield economic value – e.g., customer lists.

International e-commerce transactions will be taxed by the appropriate government agencies. In 2018, the United States Supreme Court addressed this issue in South Dakota v. Wayfair and acknowledged the states are losing revenue due to their incapability to collect sales tax from out-of-state retailers. Thus far, the Internet Tax Freedom Act (“ITFA”) and Streamlined Sales Tax Project have been implemented to prevent new taxes on e-commerce transactions and to simplify sales and use taxes.

International e-commerce laws pertain to online commercial transactions that takes place for the purchase or sale of goods and services.  Electronic contracts are used for the purchase or sale of software through shrink-wrap, click-wrap, and browse-wrap agreements. In general, these electronic transactions have a correlation to taxes, duties, and custom laws. In addition, the topic of intellectual property must be addressed to protect confidential information such as trademarks, copyrights, patents, and trade secrets.

There are six principles that apply to electronic agreements. First, the users should have automatic access to the agreement’s terms. Second, the contractual terms should comply with the applicable laws in relation to form, content, notice, and disclosure. Third, the users should be given the opportunity to take some form of affirmative action to consummate the transaction. Fourth, users should be given the opportunity to reject the agreement. Fifth, the agreement process should provide the user to detect and correct errors. Sixth, users should be able to print the agreement and software developers should provide a method to preserve the electronic records.

It is important for e-businesses to comply with the guidelines. For example, e-businesses should use fair advertising and marketing strategies for the online transactions. They should provide correct and accessible information about their company and its goods and services. They should fully disclose information regarding the transaction’s terms and conditions. They should provide a secure method for online payments. They should protect the customer’s privacy during the e-commerce transactions.

International internet laws are related to international commercial disputes, jurisdiction, judgment enforcement, free speech and censorship, e-commerce transactions, intellectual property rights, or cybersecurity and privacy.

International commercial disputes can take place in foreign jurisdictions since the internet has no borders. The internet comprises of commercial, educational, governmental, and international networks that use certain communication protocols – e.g., TCP/IP, UDP, ICMP, HTTP, POP, FTP, IMAP – to communicate with each other. These protocols are used for data transmission across computer networks. For example, TCP/IP enables data exchange by providing end-to-end communications. UDP is used by software programs to transmit short datagram messages. ICMP is used for diagnostics and generating system error reports. HTTP, which stands for Hypertext Transfer Protocol, is a client-server protocol that permits access to web resources. POP is used to extract and download emails from a remote server. FTP, which stands for File Transfer Protocol, is used to send or receive files to or from a server and client computer.  IMAP, which stands for Internet Message Access Protocol, is used by email clients to download messages from a mail server. In short, these protocols are used to send and receive electronic information across the network of computers.

The issue of jurisdiction is important because there could be various reasons why a state or federal court would not choose to exercise authority over the parties. The courts have set out parameters for determining whether they can exercise jurisdiction. These parameters include the location of parties, defendant’s physical presence in the jurisdiction, and nature of violations towards the plaintiff.

International internet laws are relevant to e-commerce and online transactions in many ways. There are many international rules and regulations that can affect electronic commercial transactions – i.e., e-commerce transactions. For example, the European Union has issued multiple directives that are set to regulate international policies. These directives outline the legislative minimum standards for all member states. Therefore, it is important to understand the parameters in order to properly advise clients who conduct international business.

Data protection and privacy has been an important issue on the national and international levels. So, for example, the European Union’s Data Protection Directive (EU Directive No. 95/46/EC) has set out the data protection and privacy parameters. It prevents the transfer of personal information to foreign nations without adequate protection. It has outlined several important principles to properly safeguard personal information.  These principles include collecting personal information for a legitimate purpose, informing the individuals about data collection, granting access to the individual’s personal data, giving the individuals the right to access, modify, or delete their personal information, and providing proper remedies in case of violations. This includes the “Right To Be Forgotten” rule which grants individuals the right to delete personal information from internet records.

The EU Data Protection Directive has also addressed cookies by requiring website operators to obtain the visitor’s consent for using cookies on their platforms. This requirement forces website operators to provide notice to all visitors about using cookies and to request formal consent.

International internet laws are important to understand in the context of internet transactions. Also, the issue of a foreign court’s jurisdiction over the parties comes up on a regular basis. The international laws include treaties, directives, rules, and regulations. For example, the Hague Conference on Private International Laws has adopted a convention that governs jurisdiction and judgment enforcement among its members. As such, the parties will have the opportunity to select the venue, governing law, and jurisdiction for dispute resolution before executing agreements. This way, a predesignated court would have authority over the parties and could render a final and enforceable judgment. This convention allows the parties to enforce the judgment in the proper jurisdiction. It also applies to non-consumer browse-wrap and click-wrap agreements.

International internet laws can be complicated especially if there are multiple parties involved from different jurisdictions. For example, if the plaintiff is in France, and one defendant is in Germany, and the other is in the United States, a foreign court with proper authority over the case may not grant the protections afforded to the defendants by the United States laws. The court usually evaluates where the violation took place and who was affected by it. It will also evaluate whether the defendant’s actions were intentionally directed towards the plaintiff. In some cases, the courts have been inclined to apply United States laws to foreign litigants based on the facts and evidence. Therefore, it will be determined on a case-by-case basis.

A foreign court will likely have jurisdiction if the online commercial transactions – i.e., e-commerce transactions – had a substantial effect in their country. This is called the Effects Doctrine which holds that a foreign court should have jurisdiction where the effects are felt and damages take place despite the defendant’s citizenship or nationality. This principle has been useful in online harassment and defamation cases.

Online marketing and advertising can be a complicated process since the internet has opened new channels that did not previously exist before the technology age’s expansion. Now, with the advent of sophisticated technologies, business owners, startups, and entrepreneurs have more options when it comes to online marketing and advertising.

They can use email, telephone, or other online marketing and advertising tools to reach their customers. They can also use banners, pop-ups, metatags, mass emails, mass text messages, or linking and co-branding plans. The internet has no boundaries so you should realize that even though your company is located in one state, yet your online marketing and advertising campaign may implicate state, federal, or international laws. This can be true when your company is targeting customers in other states or nations. So, your contacts with that jurisdiction whether by having offices, employees, or customers there can play an important role in determining which court has authority to resolve disputes.

There are several state and federal laws that can be relevant to internet advertising. For example, the Lanham Act, FTC Act, or California Business and Professions Code regulate internet marketing and advertising. The Trademark Act – which is also known as the “Lanham Act” – regulates trademarks, service marks, trade names, and trade dress issues. This federal statute deals with infringements and outlines the remedies. It also creates a private right of action pursuant to 15 U.S.C. Section 1125(a)(1) against the infringing parties. A private right of action (or “implied cause of action”) is the legal right granted to a private party to file a lawsuit.

International alternative dispute resolution is a necessary variable when it comes to internet and e-commerce transactions. In most cases, the parties have entered into a written agreement that yields an arbitration or mediation clause. Therefore, it is important for legal counsel to ensure the relevant provisions properly address the following issues: (1) choice of forum; (2) choice of law; (3) selection and number of arbitrators; (4) proceeding language; (5) discovery rights; and (6) remedies – e.g., injunctions, attorney’s fees, court costs.

Trustmark providers require the parties to stipulate to some form of alternative dispute resolution. A “trustmark” is a seal or banner on a website that shows the business is compliant with industry standards. So, it promotes self-regulation of e-commerce websites. In addition, the European Union has issued directives for e-commerce transactions to promote using alternative dispute resolution.

The options are clear when it comes to alternative dispute resolution (“ADR”). First, there is “arbitration” which includes a formal determination of the legal rights of the parties. Second, there is “mediation” which facilitates formal negotiation between the parties by focusing on their underlying interests.

There are various ways to protect your intellectual property rights. First, you can register a copyright. Second, you may register a trademark or service mark. Third, you may register a patent. Copyrights are meant to protect literature, music, motion pictures, artistic works, photographs, essays, articles, computer programs, graphic design, and sound recordings. A trademark is a word, phrase, symbol, or design, or a combination of any of them that identifies and distinguishes the source of the goods of one party from those of others. A service mark is the same as a trademark but it identifies and distinguishes the source of a service. A patent grants a property right to the inventor. It grants the right to exclude others from making, using, offering for sale, or selling the invention or importing the invention into the United States. In general, patents are valid for 20 years from the application date.

So, in summary, trademarks, service marks, copyrights, and patents protect different types of intellectual property. Trademarks protect brand names and logos used on goods and services. A copyright protects an original artistic or literary work. A patent protects inventions. For example, if you invent a television, you should file a patent application. You would apply to register a trademark to protect the television’s brand name. You can also register a copyright for the product’s advertisement.

There have been multiple intellectual property disputes especially between e-commerce websites. For example, there was a legal battle between Amazon and Barnes & Noble regarding the “single click” or “one-click” buying mechanism. This legal action was confidentially settled between the parties. Google has been sued by multiple companies for selling their trademarks as keywords. In fact, American Airlines and Geico have instigated legal actions against it. Also, the infamous “Da Vinci Code” lawsuit was brought by several authors against the Random House Group claiming copyright infringement. The case was about an alleged copyright violation by Dan Brown who wrote the bestselling “Da Vinci Code” book. However, the court dismissed the case and stated that there was no copyright infringement by textual or non-textual copying of a substantial part of the subject book.

In the past, real estate transactions were consummated by signing the dotted line with ink after printing the documents. Now, most, if not all, real estate transactions are being finalized by using electronic signatures. Technology is directly affecting real estate transactions since software programs allow the parties to electronically review and sign the papers. So, in this article, we will be discussing how technology affects real estate transactions and the relevant rules and regulations.

On June 30, 2000, the Electronic Signatures In Global and National Commerce Act (“E-SIGN Act”) was passed to ensure the validity for electronic records and signatures in commercial transactions. It was formally enacted under 15 U.S.C. §§ 7001, et seq. It actually grandfathered pre-existing contracts that were consummated between users and commercial entities in delivering electronic information. Yet, any contracts that were executed on or after October 1, 2000 are subject to the statute’s provisions.

The E-SIGN Act has several requirements. For example, a commercial institution should provide notice to the consumer and obtain prior consent. It should provide notice to the consumer regarding hardware and software requirements. It should be able to associate the electronic signature with the records. It should ensure proper retention and accurate reproduction of those records for a period that is legally required.