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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.

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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.

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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.

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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.

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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.

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The Eliminating Abuse and Rampant Neglect of Interactive Technology (“EARN IT”) Act is a proposed bill that is designed to permit government agencies scan online messages and prevent child sexual exploitations. It is meant to force websites remove child abuse images from their platforms. The advocates argue it is necessary to allow the government evaluate online communications for potential violations. They argue that websites should be held accountable for user violations. This law seems to be against encryption which is used to obscure content from the unintended recipient. Encryption technology has been used to protect online privacy by scrambling messages through special algorithms. It can only be deciphered by the intended recipient who has access to the private key. Encryption can be used to securely communicate on the internet but it can also be used for nefarious reasons. That said, the EARN IT Act does not use the term “encryption” in its provisions. The supporting legislators have claimed the proposed statute is not designed to outlaw encryption. Also, it would require websites to adhere to certain best practices that will be implemented by the Attorney General’s Office by selecting a group of law enforcement agents who would impose them.

The EARN IT Act could reduce the protections granted under Section 230 of the Communications Decency Act (“CDA”) which provides a certain level of immunity for online service providers. Now, the immunity is not absolute but it is not very far from it. It protects online service providers (a/k/a “interactive computer service providers”) from user violations. For example, if the user engages in conduct that constitutes invasion of privacy of another person, the website would be shielded from legal liability. So, the victim could not file a lawsuit against the website for the user’s violations. However, the following three exceptions apply: (1) federal criminal activity and obscene material; (2) intellectual property violations; and (3) sex trafficking. In fact, 47 U.S.C. § 230(e)(1) prohibits obscene material and sexual exploitation of children. Moreover, 47 U.S.C. § 223 prohibits the transmission of lewd, lascivious, filthy, or indecent messages to a person under the age of eighteen. The CDA prohibits online service providers from sexual exploitation of minors, sex trafficking, or promotion of prostitution in jurisdictions where it is illegal. In other words, interactive computer service providers cannot facilitate these activities on their platforms. In Reno v. ACLU, the Supreme Court evaluated the CDA and its relevant provisions. It found that the CDA criminalized protected speech – e.g., sexually explicit speech – and unprotected obscenity.

The EARN IT Act has been compared to the Fight Online Sex Trafficking Act (“FOSTA”) and Stop Enabling Sex Trafficking Act (“SESTA”) which were passed to fight against online sex trafficking by making websites criminally liable for user content. These federal statutes caused several websites, including, but not limited to, Craigslist and Backpage to remove pages or be completely shut down. So naturally, critics have argued that they promoted online speech censorship and prevented people who engaged in consensual sex work. Yet, if the proposed bill passes legislation, it could open the floodgates for lawsuits against technology companies.

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Free speech and censorship laws have clashed for a very long time in this country. On one hand, we have the constitutional right to free speech. On the other hand, there are limitations that can be applied on a case-by-case basis. In short, speech can be censored if it includes obscenity, child pornography, or the incitement of imminent lawless action. The Supreme Court has faced a multitude of cases in these contexts. For example, in Schenck v. United States, the court ruled that freedom of speech does not include the right to incite actions that would harm others. In Roth v. United States, it held that it is unlawful to make or distribute obscene materials. In United States v. O’Brien, it held that it is unlawful to burn draft cards as an anti-war protest. In Hazelwood School District v. Kuhlmeier, it ruled that it is unlawful to permit students to print articles in a school newspaper over the objections of the school administration. In Bethel School District #43 v. Fraser, the court held that it is illegal for students to make obscene speech at a school-sponsored event. Furthermore, in Morse v. Frederick, it held that students cannot advocate illegal drug use at a school-sponsored event. The point is that even though there are a vast amount of constitutionally-protected rights, yet there are certain limitations.

How does the First Amendment apply to private social media platforms?

The First Amendment is designed to limit government agencies from encroaching upon its citizen’s rights. In recent years, private social media platforms – e.g., Facebook, Twitter, Instagram – have had discretion to limit, control, or censor online speech of their users. It is certainly arguable that the state and federal constitutions should also apply to private social media platforms because truth and falsity have always clashed with each other during the course of history. There are several schools of thought that analyze free speech rights based on the freedom of expression. First, one idea is that government should not change or alter the marketplace of ideas with censorship. Second, the other idea is that people should have the liberty to express themselves in society without reservation. So, if the social media platforms are granted censorship rights, then it would prevent liberty and growth. Now, more recently, in Packingham v. North Carolina, the Supreme Court acknowledged the fact that speech is taking place on social media platforms more than anywhere else. As such, the State Action Doctrine’s application should be reevaluated by the legislators.

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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.

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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.

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Electronic discovery is complicated because it’s a multifaceted procedure. The parties must review the computer network that yields the electronically stored information. They must identify the relevant electronically stored information (“ESI”) and understand the network infrastructure. The collection process is the next step wherein the parties must be able to locate, identify, and collect the relevant information. They may be required to hire forensic data professionals who can use special tools for the discovery process. These forensic data professionals should have access to electronic data discovery software. They should be able to procure mirror images of the electronic files which may yield metadata for a proper evaluation. They should also know how to handle metadata and privileged information (e.g., intellectual properties, trade secrets) to avoid complications. However, in most cases the discovery process becomes complicated due to a lack of cooperation between the parties. Therefore, it may be necessary to invoke the right to onsite inspection.

Onsite inspection of the adverse party’s computers is supported by the state and federal rules. For example, Rule 34(a) of the Federal Rules of Civil Procedure grants the right to engage in the onsite inspection of the adverse party’s computers. In California, Code of Civil Procedure Section 2031.010 grants the right to conduct onsite inspections in certain situations. In general, the requesting party should prove the adverse party has destroyed evidence, has altered documents, or has failed in its discovery obligations.

The courts have raised the concept of proportionality in their analyses. They’ve held that the cost and effort of electronic discovery should be justified by the litigation’s nature, amount in controversy, and relevancy of the requested electronic files. The courts have assessed whether the benefits of examination outweigh the privacy interests of the adverse party. If so, then the requesting party is granted the right to electronic discovery. Yet, there is a high probability that they will run into problems such as data alteration, deletion or fabrication.

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