The Business Law Brief ^sm (April, 2000)

Author's Comment: This has been an incredibly busy month, with multiple events or cases in several areas, so this column will be longer than usual. Enjoy!

1. What Do You Think? But Hurry! ICANN Invites Comments Regarding Its Consideration of Establishing New Top Level Domain Names.
   The ICANN Domain Names Supporting Organization (DNSO) is inviting comments on its report, and will meet on April 18, 2000, prior to making its recommendation to ICANN, so hurry to make your comments. The DNSO has been considering how to add new top level domain names while still protecting trademarks. http://www.icann.org/dnso/new-gtlds-01apr00.htm

2. Intellectual Property I: Libel Action's One Year Statute of Limitations Applies to Web Publication - NY State Court.
   Is the posting of information to the internet a republication each day it appears on a website? That question was answered in the negative by New York Court of Claims Judge Francis T. Collins. Reasoning that the law has for years recognized only a single publication of newspapers, magazines and books, even though those copies might continue to exist and be read years later, Judge Collins ruled that the publication of information to a website on the internet is a single publication, though the content might exist thereafter and be viewed for weeks, months or years. Plaintiff had argued that since the website could be changed or updated each day, the content was essentially republished each day. Firth v. State of New York, decided March 8, 2000. http://www.nytimes.com/library/tech/00/03/cyber/cyberlaw/31law.html

3. Intellectual Property II: First Impression: Deep Hypertext Link Does Not Violate Copyright Laws.
   In the intensely debated and closely watched case of Ticketmaster vs. Tickets.com, concerning a website owner's right to link to the interior of another website, bypassing its home page and attendant advertising, the Defendant Tickets.com has won the right to link from its website direct to an interior page of its competitor, Ticketmaster, without violating copyright laws. Judge Harry Hupp ruled: "hyperlinking does not itself involve a violation of the Copyright Act ... since no copying is involved." However, since Ticketmaster also alleged a copying of its website content, the Judge let stand the claim for copyright infringement. Extracting factual data from a competitor's website, and using that information, as long as not in the same format, expression and method of presentation is not a violation of copyright laws. The Court also rejected Ticketmaster's argument that the printing of one of its web pages, by itself, constituted copyright infringement. http://www.gigalaw.com/library/ticketmaster-tickets-2000-03-27.html

4. Internet Jurisdiction I: No Personal Jurisdiction Over Passive Website.
   A passive website, which provided company and product information, but did not permit internet sales, and contained only a hyperlink sending email to the company was not sufficient to establish personal jurisdiction over the non-resident Defendant in a patent infringement suit. Ruling that Federal Circuit law applied because the Federal Circuit has appellate jurisdiction over patent cases, the U.S. District Court for the Northern District of Texas held that since the website did not permit order taking, and there was no evidence that the company made any sales in the state through its website, personal jurisdiction was not established. Nutrition Physiology Corp. v. Enviros Ltd., N.D. Texas, No. 5:99-CV-0107-C, 3/9/00). http://www.lawnewsnetwork.com/practice/techlaw/news/A19888-2000Mar28.html

5. Internet Jurisdiction II: But Jurisdiction Asserted if Website Earns Monies in Interstate Commerce.
   In a domain name dispute between the National Football League, based in New York, and a website named nfltoday.com based in California, a New York Court has asserted jurisdiction over the California website owner because he earned monies from advertising on the website, establishing to the Court's satisfaction that the website was engaged in interstate commerce.

   http://www.lawnewsnetwork.com/practice/techlaw/news/A20302-2000Mar31.html

6. Taxation I: Corporate Officer Not Accountable for Corporation's Failure to Pay Use Tax.
   Since a corporation may only act through its agents and officers, the failure of the corporation to file or pay its use tax cannot be imputed to an individual defendant officer because the Use Tax Act does not impose criminal liability upon corporate officers or agents. People v. Bohne, 1st Dist. No. 1-99-1515 (3/23/00). Cook Co. Aff'd.

7. Taxation II: Taxpayer's Stock Purchase Loss Cannot be Offset Against Later Gain from Sale of Stock.
   Even though taxpayer suffered loss in connection with his purchase of stock in 1984, and later acquired gain from sale of same stock in 1986, loss cannot be used to offset gain. Illinois Revised Statutes, Chapter 120, Section 2-207 provides that when taxpayer's net income results in a loss, loss may be allowed as carryover or carryback deduction as § 172 of Internal
   Revenue Cod, but law expressly excluded coverage for tax years ending prior
   to 12/31/86. Taxpayer would have been able to offset gain if both transactions had occurred in the same year. Rockwood Holding Company v. Department of Revenue, 1st Dist No. 1-98-4081, (3/24/00). Cook Co. Aff'd.

8. General Counsel I: Attorney-Client Privilege.
   Defendant's general counsel's remark to defendant's management that defendant could not have "cripple" in public view was properly excluded from evidence based on attorney-client privilege. Although Plaintiff had argued that remark was not privileged since made in counsel's business capacity, record sustained defendant's contention that remark was made while counsel was rendering advice about defendant's obligations under the Americans with Disabilities Act. Rehling vs. City of Chicago, 7^th Cir. Ct App. No. Dist. IL, 99-1771 (March 21, 2000)

9. General Counsel II: Disqualification; Employment Law.
   Even though substantial period of time had elapsed, Defendant's former general counsel was properly disqualified from representing plaintiff in retaliatory discharge action against former employer, where general counsel had previously represented Defendant employer as in-house counsel for more than 14 years. Franzoni v. Hart Schaffner & Marx, No. 1-99-1232 (3/15/00). Cook Co. Aff'd.

10. AG Opinion: Illinois Farm Development Authority Loans Guaranteed by State.
    Attorney General Opinion # 00-006, issued March 7, 2000, asserts that loans issued by the Illinois Farm Development Authority are unconditionally backed by the full faith and credit of the State of Illinois. http://www.ag.state.il.us/opinions/00-006.htm

11. Internet Taxation I: Advisory Committee Narrowly Recommends Extension of Moratorium.
    Unable to acquire the 2/3 majority required to mandate Congressional Action, the Advisory Committee on Internet Taxation narrowly voted to recommend that Congress extend for five more years the current moratorium on new Internet taxes. The panel also voted to recommend that taxes on Internet access charges be banned, federal telephone tax be eliminated, and the questions surrounding when sales taxes can be imposed on online sales be resolved. See also the related articles, especially the European Union's plan to tax certain Internet transactions. http://www.nytimes.com/library/tech/00/04/cyber/capital/04capital.html

12. Internet Taxation II: Tax Treatment of E-Commerce Revenues.
    An international commerce organization, the Organisation for Economic Co-operation and Development, which is considering the tax characterization of e-commerce revenues has released its report for comment. The report is meant to address the tax issues raised by Internet commerce in light of various tax treaties between nations, and provide a guide for distinguishing between business profits and royalties, a distinction which has significant implications under the treaties. Go to: http://www.oecd.org/daf/fa/treaties/tcecommpay.htm

13. Is Client-Principal Responsible for Acts of Attorney-Agent?
    After a business dispute resulted in judgment against plaintiff, defendant-attorneys sought collection. Through citation proceedings, defendant-attorneys learned of the identity of business associates of plaintiff, and wrote letters to more than 40 of them, suggesting that their tax returns were incorrect because Plaintiff had taken a disproportionate share of earnings. Summary Judgment in favor of defendant-attorneys was reversed, the appellate court holding that the determination of whether defendant-attorneys had acted within the scope of their authority, and whether plaintiff-clients had acquiesced in or ratified the conduct of their attorneys was a question of fact. Horwitz v. Holabird & Root, No. 1-99-1377, 1st District, February 24, 2000.

14. U.S. Supreme Court: Federal Arbitration Act Venue is Permissive, not Exclusive.
    Hearing a case from the Court of Appeals for the Eleventh Circuit, the U.S. Supreme Court has decided that venue under the Federal Arbitration Act is not limited to the venue in which the arbitration was held. The parties' case had been arbitrated in the Northern District of Alabama, but Petitioner sought to vacate or modify the award in the Federal District Court for the Southern District of Mississippi, where the contract had been performed. Seven days later, Respondent sought to confirm the award in the District Court in Alabama, which refused to dismiss, contending that venue was proper only in Alabama. Held: The FAA's venue provisions are permissive, allowing a motion to confirm, vacate, or modify to be brought either in the district where the award was made or in any district proper under the general venue statute. Cortez Byrd Chips, Inc. vs. Bill Harbert Construction Co., # 98-1960. Souter, J., delivered the opinion for a unanimous Court.

15. The E-tail on E-mail. Is it Enforceable?
    Many companies, especially financial and law firms, now routinely add legal disclaimers at the end of all of their e-mail messages, warning that the content is confidential, that it does not constitute advice, and that the company denies all responsibility for the actions of its employees, for any virus transmitted, or for any other wrong. But many lawyers doubt whether such disclaimers would be legally effective if challenged in court, and predict that the routine use of legal disclaimers on all messages will result in "overwarning," making the use of disclaimers ineffective. See Article: "The Legal Position of E-Mail Disclaimers" by Simon Halberstam of Sprecher Grier Halberstam, London

© 2000, Perfectly Legal Publications, Inc. <http://www.PerfectlyLegalPubs.com/>
All Rights Reserved

Some links are not permanent and may expire.
The Business Law Brief was written as a public service.