The Internet and E-business: A tool or a weapon?
[This article supplements the Article published in the business magazine July 2008 edition]
Most of us nowadays use the internet to conduct business, both commercial and individual.
A universal problem with the internet is the lack of transparency. It is very difficult to ever truly know who you are dealing with. Internet identity fraud, both individual and corporate (known as passing off) and infringement of trademark, patent, copyright and other intellectual property rights is commonplace. Economic loss, loss of reputation and disgruntled customers are but a few consequences. Innocent infringement is no defence.
A common mistake is for businesses to use the same or very similar website set up as a competitor, which can lead to that competitor claiming passing off. For example in the case of Marks & Spencer PLC and others v One in a Million Ltd and others, the Court of Appeal held that the registration of by the Defendants of a domain name including the name Marks & Spencer makes a false representation that they are associated or connected with Marks & Spencer PLC, the fact that Marks & Spencer PLC could not establish any damage or likelihood of damage was irrelevant.
As goods and services for sale on the internet may be viewed by prospective purchasers in other jurisdictions you should always consider what terms and conditions, law and jurisdictions apply to the contract. You should consider:
- performance of the contract
- availability of damages and other relief
- availability of interim damages
- level of awards of damages
- exclusions or limitation of liability
- how easy it is to obtain a judgement and how much would it cost
- how easy it would to enforce a judgement and how much it would cost
English Courts may not have jurisdiction to deal with an internet dispute as it will often depend on where performance of the contract is deemed to take effect and proceedings may only be issued with the Court’s permission in a limited number of circumstances. A frequent difficulty encountered by potential claimants trying to identify anonymous e-commerce wrongdoers is that IT service providers (ISP’s) are often not willing to identify the wrongdoer due to data protection legislation and contractual obligations of confidentiality. Cross border litigation is costly and whether commercially liable is a matter of subjective opinion.
Different legal systems have different remedies. Enforcing performance of a contract is not usually preferred in international practice unlike here in the United Kingdom. Establishing an award of damages under English law tends to focus upon causation and foreseeability whereas the USA is more liberal. In France and Italy damages are not calculated in this way and is purely decided at the discretion of the trial judge. Civil Codes differ between European Countries. It is important to understand such laws if you intend to conduct business cross border.
It is critical to establish how difficult it would be and how much it would cost to try and claim against someone out of the jurisdiction. Sometimes these factors outweigh the commercial viability of proceeding to enter into the contract.
It is therefore key to ensure that you fully understand your legal rights and appreciate and consider any third party’s legal rights when conducting business via the internet. Used with legal understanding and caution, the internet can be an effective tool to undertake business and it need not be a weapon.
If in doubt seek legal advice which will be cost effective in the long run. It is important to consider different forums within which to resolve an internet dispute. The World Intellectual Property Organisation (WIPO) and Communications and Internet Services Adjudication Scheme (CISAS) offers independent dispute resolution services for communication providers.
Should you require any further advice on any of the above please do not hesitate to contact me on 01264 333336 or
