E Business Mba Notes And Assignments

Legal Issues

The Internet has posed significant challenges to the legal structure of the United States. For example, file-sharing technology enables widespread copyright infringement, while Web-site personalization mechanisms threaten consumers’ privacy. In this section, we investi-gate the legal differences between our physical environment, which consists of temporal and geographic boundaries, and cyberspace, the realm of digital transmission not limited by geography. We also explore such issues as defamation, copyright and pornography as they relate to the Internet.

1. Privacy

Although an individual’s right to privacy is not explicitly guaranteed by the United States Constitution, protection from government intrusion is implicitly guaranteed by the First, Fourth, Ninth and Fourteenth Amendments.23 The Fourth Amendment provides U.S. citi-zens with the greatest assurance of privacy, protecting them from illegal search and seizure by the government:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrant shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the person or things to be seized.

Many Internet companies collect personal information from users as they navigate through a site. While privacy advocates argue that such efforts violate individuals’ privacy rights, online marketers and advertisers disagree, suggesting that the recording of user behavior and preferences helps online companies to better serve their customers. For example, if a user visits an online travel site and purchases a ticket from Boston to Phila-delphia, the travel site might record this transaction. In the future, when a ticket goes on sale for the same flight, the Web site can notify the user.

Online privacy also is impacting companies’ relationships with employees. Many businesses are implementing systems that regulate employee efficiency within workplaces. One of the newest surveillance technologies, keystroke cops, monitors employee activities on corporate and communications equipment. Keystroke software is loaded onto the hard drive of an employee’s computer, or it can be sent to an unsuspecting employee as an e-mail attachment. Once activated, the software registers each keystroke before it appears on the screen. In debates surrounding monitoring technology, a business’ right to regulate the use of company time and equipment is pitted against employee’s rights to privacy and freedom of speech. Situations can involve employees who neglect responsibilities to write personal e-mails, surf the Web or conduct online tirades against management in chat rooms.

2. Defamation

Defamation is the act of injuring another’s reputation, honor or good name through falsewritten or oral communication. It is often difficult to win a defamation suit because the First Amendment strongly protects the freedom of anonymous speech (speech by an un-known person or a person whose identity has been withheld).

Defamation consists of slander and libel. Slander is spoken defamation, whereas libelous statements are written or spoken in a context in which they have longevity and per-vasiveness that exceed slander. For example, broadcast statements can be considered libelous, even though it is spoken.

To prove defamation, a plaintiff (the person bringing the argument to court) must meet five requirements: (1) The statement must have been published, spoken or broadcast; (2) There must be identification of the individual(s) through name or reasonable association; (3) The statement must, in fact, be defamatory; (4) There must be fault (for public persons, the statement must have been made in actual malice, or with the intention of causing harm; for private persons, the statement needs only to have been negligent, or published, spoken or broadcast when known to be false); and (5) There must be evidence of injury or actual loss.

3. Sexually Explicit Speech

Although pornography is protected under the First Amendment, obscenity is not, and par-ties can be held legally responsible for obscene statements. As determined in Miller v. Cal-ifornia (1973), the Miller Test identifies the criteria used to distinguish between obscenityand pornography. In the United States, pornography is protected by the First Amendment. To be determined obscene by the Miller Test, material must (1) Appeal to the prurient in-terest, according to contemporary community standards, and (2) When taken as a whole, lack serious literary, artistic, political or scientific value.

The Internet, with its lack of geographic boundaries, challenges the Miller Test. As we have stated, the Test is dependent on contemporary community standards. In cyberspace, communities exist independently from physical locations. Cyberspace complicates issues of jurisdiction by making it possible, for example, for a person in Tennessee, where the tol-erance for pornography is relatively low, to view a site that is hosted in California, where the tolerance is high.

The Internet possesses characteristics similar to those of broadcast media and print media, but problems arise in applying laws developed for those media to the Internet. Broadcasting is considered highly pervasive, and its content is strictly regulated. The Internet resembles broadcasting in its ability to reach a broad audience with little or no warning.28 By contrast, the regulation of print media focuses on limiting the audience, rather than the content, of the material. Defined as non-content-related means (an effort to control the audience rather than the material), print restrictions, for example, allow an adult to purchase and view pornographic material, but limit an adolescent’s ability to obtain that material. The Internet can mimic non-content related means by requiring users to provide identification before entering specific sites. Regulation of Web content could require the development of new legislation because of the Internet’s unique features.

4. Copyright and Patents

Copyright, according to the U.S. Copyright Office, is the protection given to the author ofan original piece, including “literary, dramatic, musical, artistic and certain other intellec-tual works,” whether the work has been published or not. For example, copyright protection is provided for literature, music, sculpture and architecture. Copyright protects only the expression or form of an idea, not the idea itself.

Copyright protection provides incentive to the creators of original material by guaran-teeing them credit for their work for a given amount of time. Currently, copyright protec-tion is guaranteed for the life of the author plus 70 years. Concerns have been raised regarding the ability of traditional law to protect intellectual-property owners from online copyright infringement because of the ease with which material can be reproduced on the Internet. To complicate the issue further, digital copies are perfect duplicates of digital originals, making it difficult to differentiate authorized copies from pirated ones.

Patents, another form of intellectual property, grant the creator sole rights to a new dis-covery. Given the growth rate of the Internet, some argue that the 20-year duration of pat-ents discourages continuous software development and improvement.

In 1998, the federal regulations governing the distribution of patents increased the scope of patentable discoveries to include “methods of doing business.” To be granted a patent for a method of doing business, one must present an idea that is new and not obvious to a skilled person.

CPSC 155b E-Commerce: Doing Business on the Internet


Instructor:   Joan Feigenbaum
Course title:  E-Commerce: Doing Business on the Internet
Time: TTh 1-2:15
CR/D/F:  No
Starred:  No
Office Hours: AKW 512, Tues 2:30-3:30, Thurs 11-12
Prof. Feigenbaum's Assistant: Judi Paige (email: judi.paige@yale.edu)
     Phone: 432-1229, Room: AKW 509
TA: Charles Chiou (email: charles.chiou@yale.edu)
     Office Hours:  Mon 4:00-5:00, Wed 1:00-2:00
     Phone: 432-1266, Room: AKW 301
TA: Sheng Zhong (email: sheng.zhong@yale.edu)
     Office Hours:  Thur 2:30 - 3:30, Fri 1:00 - 2:00
     Phone:  432-4091, Room: AKW 514

Brief Description:  Introduction to Electronic Commerce.   Emphasis on Internet business.  Underlying technological developments.  Business models.  Legal, social, and political implications.

Expanded Description: Computers, communication networks, and a wide variety of newer, rapidly developing technologies are an increasingly important part of the ways in which individuals, companies and organizations of all kinds conduct business. These technological changes present challenges that must be faced not only by techologists but also by lawyers, policy-makers, economists, entrepreneurs, ethicists, and many other stakeholders.  Potential topics to be addressed from both technical and non-technical points of view include but are not limited to: information ownership; online privacy rights; intellectual property, digital copyright, and fair use; monopoly, monopsony, and antitrust. Students at all levels of technological expertise and inclination may take the course; projects and assignments will be designed to ensure appropriate choices for students with a wide range of backgrounds.

Prerequisites:  No formal course pre-requisites other than computer literacy and Internet literacy.  Non-science-majors are welcome.

Course requirements:  Homework assignments, two hour exams, and a final paper or project on a topic of the student's choice. No final exam.

Required reading:
(1) The Digital Dilemma: Intellectual Property in the Information Age, National Research Council, 2000, R. David (ed.)

(2) Information Rules: A Strategic Guide to the Networked Economy, Shapiro and Varian, 1998, Harvard Business School Press, Boston.

(3) A modest number of relevant, current articles and web sites.

 Possible Topics For Final Paper or Project

 Lecture Notes - January 9, 2001 (PowerPoint format, pdf format)

Reading assignment for January 11, 2001:
Executive Summary and Chapter 1 of  The Digital Dilemma.
Chapter 1 of Information Rules.

Lecture Notes - January 11, 2001 (PowerPoint format, pdf format)

Reading assignment for January 16, 2001:
Appendix C of  The Digital Dilemma.
"Rethinking the Design of the Internet: The end-to-end arguments vs. the brave new world" (Clark & Blumenthal)
Optional: Some of the other articles on http://www.sobco.com/e.132/reading/arch.html

Homework Assignment 1 - due January 23, 2001

Solutions to Homework Assignment 1

Lecture Notes - January 16, 2001 (PowerPoint format,  pdf format)

Reading assignment for January 18, 2001:
Chapters 2, 3, and 5 of Information Rules.

Lecture Notes - January 18, 2001 (PowerPoint format,  pdf format)

Homework Assignment 2 - due February 1, 2001

Solutions to Homework Assignment 2

Lecture Notes - January 23, 2001 (PowerPoint format,  pdf format)

Reading assignment for January 25 and 30, 2001:
Appendix E of  The Digital Dilemma.

Lecture Notes - January 25, 2001 (PowerPoint format,  pdf format)

Lecture Notes - January 30, 2001 (PowerPoint format,  pdf format)

Reading assignment for February 1 and 6, 2001:
Chapters 4 and 5 of  The Digital Dilemma.
Optional: Chapter 4 of Information Rules.  Three articles about "trusted systems" and digital copyright:
"Shifting the Possible," by Mark Stefik.
"Trusted Systems," by Mark Stefik.
"Letting Loose the Light," by Mark Stefik.

Lecture Notes - February 1, 2001 (PowerPoint format,  pdf format)

Lecture Notes - February 6, 2001 (PowerPoint format,pdf format)

Hour Exam 1 - February 8, 2001

Solutions to Hour Exam 1

Reading assignment for February 13, 2001:
C. Mann,  "The Heavenly Jukebox."
Appendix G of  The Digital Dilemma.

Reading assignment for February 15 and 20, 2001:
Chapter 6 of  The Digital Dilemma.
 Benkler and Lessig's Amici Brief in MPAA v. 2600

Lecture Notes - February 13, 2001 (PowerPoint format,pdf format)

Lecture Notes - February 15, 2001 (PowerPoint format, pdf format)

February 20, 2001:  Guest lecture by Ernest Miller, Resident Fellow,
Information Society Project, Yale Law School

Short bio:  Ernest enlisted in the US Marine Corps in 1986, graduated with honors from the US Naval Academy in 1992 and served five years as a naval officer in Asia before attending Yale Law School.  He interned for the Center for Democracy and Techology and the Department of Justice.  As a fellow of the Information Society Project, he writes on cyberlaw policy issues and assists the Electronic Frontier Foundation in cyber civil liberties litigation.
Reading assignment for February 26, 2001:
Chapter 8 of Information Rules.

Homework Assignment 3 - due March 1, 2001

Solutions to Homework Assignment 3

Lecture Notes - February 22, 2001 (PowerPoint format,  pdf format)

Lecture Notes - February 27, 2001 (PowerPoint format, pdf format)

Lecture Notes - March 1, 2001  (PowerPoint format,  pdf format)

Reading assignment for the week of March 19, 2001:
How XML Enables Internet Trading Communities and Marketplaces  by Robert Glushko
Entering the 21st Century: Competition Policy in the World of B2B Electronic Marketplaces
        Executive Summary, Chapters 1 and 2: Required
        Chapter 3: Optional

Lecture Notes - March 20, 2001  (PowerPoint format,  pdf format)

Homework Assignment 4 - Due March 27, 2001

Solutions to Homework Assignment 4

Examples of Document Type Definitions in XML

March 22, 2001:  Guest lecture by Robert Glushko of CommerceOne

        Abstract:  XML as the Foundation for eMarketplaces and Market-to-Market Interoperability
        Traditional models for electronic business are based on long-term, tightly coupled, and point-to-point
        relationships, often centered around a dominant enterprise that imposes proprietary integration
        approaches on its trading partners.  In contrast, XML enables open, loosely coupled, "eMarketplace"
        models based on standard message components.  An eMarketplace architecture based on XML document
        exchange among buyers, suppliers, and service providers is a natural, efficient, and robust model for
        integrating market participants.  Furthermore, this XML architecture makes document exchange between
        marketplaces fundamentally the same as within a marketplace, which enables a network of marketplaces
        to interconnect and interoperate.

Lecture notes from R. Glushko's talk  (PowerPoint format,  pdf format)

March 27, 2001:  Guest lecture by Bradley Kuszmaul of Akamai Technologies

        Title:  Some Problems Related to Content Distribution: How Akamai Delivers Content

Optional reading assignment for April 5, 2001:
Chapters 5 and 10 of "Code" by Lawrence Lessig.
Cryptography Policy and the Information Economy by Matt Blaze
My Life As An International Arms Courier by Matt Blaze

March 29, 2001:  Question-and-answer session in preparation for Hour Exam 2

Hour Exam 2 - April 3, 2001

Solutions to Hour Exam 2

April 5, 2001:  Guest lecture by Matt Blaze of  AT&T  Labs

Lecture Notes - April 10, 2001 (Powerpoint format,  pdf format)

Lecture Notes - April 12, 2001 (Powerpoint format,  pdf format)

Lecture Notes - April 17, 2001 (Powerpoint format,  pdf format)

April 19, 2001:  Final projects/papers are due in class.

Lecture Notes - April 19, 2001 (Powerpoint format,  pdf format)

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