|
|
|
|
|
|
Lesson#44
|
GLOBAL LEGAL ISSUES OF E-COMMERCE
|
|
|
|
The jurisdiction to try offences under the ETO is vested with the session
courts in Pakistan. It may not be out of place to mention here about the
hierarchy of courts in Pakistan (see Fig. 1 below). Law is broadly divided
into two classes on the basis of nature of wrong, namely, civil law and
criminal law. Civil law deals with the private rights of the parties,
whereas the object of criminal law is to punish the wrong-doer. Civil wrongs
such as breach of contract are deemed to violate only the rights of
individuals and not the society in general. On the other hand, a criminal
wrong (crime) is an act deemed by law to be harmful to the society in
general such as theft or murder etc. and the state itself is a party in such
matters. At the bottom of hierarchy, the court having jurisdiction to try
civil wrongs is the civil court and the one having jurisdiction to try
crimes is the court of magistrate. Appeal against the decision of a civil
court or magistrate, in many cases, can be filed in the District court (in
civil matters) and in the Session court (in criminal matters), respectively.
Further, an appeal can be filed in the High court, in most cases, against
the decision of the district/session court. Likewise, the decision of the
High court can be challenged in most cases before the Supreme Court of
Pakistan, which is the apex court (the court at the top of the hierarchy).
It may be noted that High Court in certain matters has an extraordinary
jurisdiction to entertain cases under Article 199 of the Constitution of
Pakistan, which is called the writ jurisdiction of the High Court. For
instance, where a government body has breached any law, a writ can directly
be filed in the High court against such a body.
Most of the countries have, by now, made laws providing recognition to
electronic documents and electronic signatures. They have basically followed
a model law on e-commerce proposed by a U.N. body called UNCITRAL (United
Nations Commission on International Trade Law) in 1996. On analysis, it
appears that ETO has certain deficiencies. For instance, difference between
an electronic signature and an advanced electronic signature is not clear.
Sections dealing with the offences of violation of informational privacy and
damage to information/informational systems are too broadly worded, which
may lead to confusion. International aspects of e-commerce such as
recognition of the foreign certificates and electronic signatures etc. are
missing. Difference in the role of accredited certification service
providers and nonaccredited ones has not been logically defined in the ETO.
Above all, the rules (to be made by the Federal Government) and regulations
(to be made by the Certification Council) under the ETO are not in place
after so many years have elapsed since its enforcement.
177
Let us now examine some major global legal issues of e-commerce. They are
listed as follows: Territorial jurisdiction Online contracts Copyright in
cyberspace Domain name and trademark conflicts Online defamation Online
privacy Issues of taxation on internet Cyber crimes
Territorial Jurisdiction
There are different forms of jurisdiction. Territorial jurisdiction
refers to the competence of a court to decide a case on the basis of certain
geographical area/territory. So, if a dispute arises in Karachi, the courts
in Karachi would only have territorial jurisdiction, and the case cannot be
filed in Islamabad or Lahore. Ordinarily, territorial jurisdiction lies
where the defendant resides or carries on business or the cause of action
has wholly or partly arisen or the immoveable property is situated (in case
the matter relates to land etc.). Note that the person who files a lawsuit
is called plaintiff and the person against whom it is filed is called
defendant. Thus, if a contract is signed at Lahore under which Mr. Ali has
to deliver certain goods to Mr. Imran at Karachi and Mr. Ali resides at
Rawalpindi, then Mr. Imran can file a suit against Mr. Ali for his failure
to deliver the goods. This suit can be filed at any of the three places,
that is, Lahore, Karachi or Rawalpindi. Note that there is no question of
any conflict of laws in this scenario since laws all over Pakistan are
almost the same. However, things get complicated when we talk of a legal
dispute in cyberspace because of the nature of the internet which transcends
any geographical boundaries. Here, different countries, having different set
of laws, may come into picture having certain linkage with the internet
transaction. The issue of territorial jurisdiction becomes complicated when
we try to find that the court of which country has the lawful jurisdiction
to decide the internet dispute. For example, an Australian firm having web
site in English doing ecommerce does not indicate to its customers that it
is an Australian firm. The web server hosting its site may be located in
Canada, and people maintaining this site may be the residents of England.
Assume a Pakistani buys certain goods from this Australian firm and is,
later, unhappy with the goods received. He might want to file a lawsuit
against the Australian firm. The border/boundary based system of
jurisdiction in the physical world does not help this Pakistani in
determining where to file the case. He may consider filing the case in any
of the countries which have linkage or connection with the transaction,
namely, Australia, England, Canada or Pakistan. Another example is of a
defamatory message sent from England defaming a Canadian. The web site may
be hosted in Sweden, and the ISP providing services may be located in
Brazil. Again, four different countries having different set of laws are
emerging in this transaction, that is, England, Canada, Sweden and Brazil.
In all such matters the plaintiff has an option to choose the country/forum
for filing his case. Obviously, the plaintiff would choose the forum whose
laws are more favorable to him as compared to the defendant. The relative
ease with which the plaintiff in cyberspace can drag the defendant to the
forum of the plaintiff’s choice is called forum shopping. So, if the law of
evidence in Singapore suits the plaintiff and he can also establish cause of
action or linkage of the internet transaction with Singapore, then the case
may be legitimately filed there. One of the key tests that the courts have
prescribed to determine territorial jurisdiction in cyberspace is to examine
the level of interactivity, commercial nature and effects of the exchange of
information.
178
Online contracts
In the physical world three elements must be satisfied in order to
make a valid contract, namely, offer, acceptance and consideration. The same
three elements must also be present in case of a valid online contract. An
offer is a commitment with certain terms made to another party such as
willingness to buy or sell certain product. A contract is formed when a
party accepts the offer of another party for consideration. Consideration is
the agreed exchange of something valuable for both the parties such as
money, property or services. For example, Mr. ‘A’ offers to buy a basket of
apples for Rs. 200, which is accepted by Mr. ‘B’ and thus a lawful contract
comes into existence between them. Here, consideration for Mr. ‘A’ is the
basket of apples he is getting, and for Mr. ‘B’, Rs. 200 in exchange of his
apples. In most cases when you click ‘I accept’ or ‘I agree’ button on a web
page, it indicates your acceptance to the terms of a certain offer, and this
can give rise to a lawfully binding contract (also known as a click wrap
agreement). It is not necessary to have a written contract. The contract can
be made orally or by conduct or through correspondence. So, offers and
acceptances can occur in the cyberspace when parties exchange email
messages, engage in EDI, fill out web forms or download a web page. An offer
can be revoked as long as no payment, delivery of service or other
consideration has been accepted. Note where a seller advertises goods for
sale on a web site, it is not making an offer but is inviting offers from
potential buyers. Normally, by looking at a web ad, the buyer can send an
order, which in fact is an offer the seller can accept, to form a contract.
If the seller cannot supply the ordered items it has an option to reject the
offer or make a counter offer. Then the buyer has the option to accept or
reject the counter offer
(See Fig. 2 below to understand the concept).
Offer and Acceptance
Offer Unconditional Statement of Acceptance Valid Acceptance Contract
Rejection Offer Terminates No Contract Conditional Statement of Acceptance
Rejection of Offer Becomes Counter Offer
Fig. 2 In online environment acceptances may be issued by an
imposter/cheater that does not have authority to bind the online business.
To overcome this problem companies and individuals can use digital
signatures to establish identity in online transactions. It is particularly
desirable that where a contract is of significant amount, parties should
require each other to use digital signatures to establish identity and to
confirm that person making an acceptance has the authority to bind the
company. Where due to the failure of a company to protect the passwords
stored with it, an imposter is able to enter company’s system and accept an
offer; a court might find such negligent
179
company to be responsible for the breach of a contract. In such
circumstances the company may be directed to fulfill the terms of the
contract or pay compensation to the aggrieved party.
Copyright in cyberspace
Copyright is a huge area of concern in cyberspace due to the nature
of internet technology. A copyright is an exclusive right granted by law to
the author or creator of a literary or artistic work to reproduce, print,
publish or make copies of such work. Creations or works that can be
copyrighted include books, music, artwork, audio and video recordings,
computer software, architectural drawings, product packaging etc. Note that
there is no copyright in ideas. Only, a particular form or expression of the
idea can be copyrighted. If an idea cannot be separated from its expression,
the work cannot be copyrighted. Thus, in most cases, mathematical
calculations cannot be copyrighted. Most web pages are likely to be
protected by copyright because words, graphics and html tags are arranged in
such a manner that it may give rise to an original work. Naturally, it
causes a problem. Each time an http request is made by a client, a copy of
the html document can be made on the client machine. Similarly, where ISPs
are engaged in caching, an extra copy of the web page is made/stored in
cache memory on the system of the ISP. Some people had argued that copyright
law could not be enforced on the internet in the above circumstances. There
is a concept of ‘fair use’ or ‘fair dealing’ in copyright law that provides
legitimate exceptions to copyright violation. Generally, fair use of a
copyrighted work includes copying it for use in criticism, comment, news
reporting, teaching, scholarship or research. Experts draw support from this
concept of ‘fair use’ to deal with the problem of copyright over the
internet. It is also argued that in cases where the author of a work has
himself provided a hyperlink leading to his work, he should be regarded as
giving the implied authority or license to download or make copies of his
work. In such an eventuality, the issue of copyright should not arise
according to an opinion.
Generally, the protection under ‘fair use’ may be sought on the following basis:
Nature of use:- the work has been used for educational and/or
non-profit purposes only; Nature of work:- if the copied work contains
factual information then it may be more effectively covered under the fair
use clause as opposed to some creative work; Extent of the work copied:
-
if the amount of work copied is
insignificantly small then the courts might take a view favorable to the
accused; Effect on the market value of the work:- A person alleged with the
copyright violation may escape any liability arguing that the work has not
been circulated to many people and there has not been any negative impact on
the value of actual work due to the circulation. When you make fair use of a
copyrighted work you should provide citation to the original work to avoid
any charge of plagiarism. The charge of plagiarism can be leveled against a
person who tries to copy the expression of the original author presenting it
be his expression in order to obtain credit for the work.
institutions can take serious action against students/persons who are found
guilty of plagiarism. It may be interesting to refer to the famous ‘Napster
case’, here. The company, Napster, had a web site. It used to provide
software and a network to millions of people using which they could exchange
music files on internet that they had copied and compressed into MP3 format.
Many music recording companies sued Napster for facilitating violations of
their copyright. Napster argued that it only provided the way or machinery
but was not directly involved in copyright violation. Disagreeing with that
the courts in America found that Napster was guilty of vicarious or
contributory copyright infringement, as it was capable of supervising
infringing activity and was obtaining a financial benefit for such an
activity. Eventually, the court ordered that Napster site should be shut
down. Napster agreed to pay 26 million dollars in damages for copyright
infringement to a group of music companies and agreed to pay copyright
holders for the music that would be downloaded in future.
180
World Intellectual Property Organization (WIPO) is a U.N. sponsored body.
In 1996 it proposed two international treaties on copyright which were
signed by many countries of the world. Those who signed these treaties
agreed to adopt or amend laws in their respective countries to ensure
protection to copyrighted work of the author of a signatory country in view
of the new infrastructure or technological developments in respect of
digital information exchange.
|
|
|
|
|