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| THE LATEST INTERNET / E-COMMERCE LAW
NEWS FROM AROUND THE WORLD |
Sourced from governments' press releases, special agencies' papers, news and information from government offices in the United States and European Union as well as international organizations and agencies.
No need to search the Web as IBLS editorial staff updates the news on a weekly basis with relevant e-commerce and Internet themes like intellectual property , digital signatures, e-public procurement, cybercrime, privacy and security, e-banking, e-payments, online buys and sells, among others.
News by the region
 | France Sanctions Online Sales of Counterfeited Goods | | |
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  No surprisingly, a France court just ordered eBay to pay over $61 million to a prestigious fashion company because counterfeited goods were sold on the auction site. France's courts have consistently ruled against the sale of counterfeited goods in auction sites and online stores. Indeed, France vigilant protection of trademarks is not surprising because this country produces some of the most prestigious goods. France has a civil law system and trademark laws are found in "Le Code de la Propriété Intellectuelle." France's trademark laws are considered complex compared to those in other countries.
Plaintiff, LVMH Moet Hennessy Louis Vuitton SA ("LVMH"), is a well-known company, home to prestigious brands such as Louis Vuitton, Givenchy, Fendi, Emilio Pucci and Marc Jacobs. LVMH filed a lawsuit against eBay, the also famous US auction site, before France's courts. LVMH argued that eBay violated France's trademark laws and performed illicit sales. France court held eBay "guilty negligence" for not preventing the sale of counterfeited goods in its website, and for the "illicit sale" of LVMH's perfumes that can only be sold through authorized distributors. eBay will file an appeal but meanwhile LVMH said the court ruling was "an answer to a particularly serious question, on whether the Internet is a free-for-all for the most hateful, parasitic practices."
Protection of trademarks in France require four basic elements, among others, (a) a trademark must not be a word or image contrary to the moral or public order; (b) a trademark must not be a word or image likely to confuse or deceive third parties; (c) a trademark must be clearly distinctive and allow identification of a particular product or service compared to like products or services; (d) a trademark cannot be a word or image already taken or protected. Thus, to register a mark in France, the mark cannot be immoral, must not be deceiving, must distinctively identify a product or service, and most be available.
France's Intellectual Property Code (Le Code de la Propriété Intellectuelle), article L.7144, establishes that "well known marks," those that become famous in the national territory, will be protected even if they have not been properly registered. The Code expressly defines a "well known mark" as "being known by a substantial proportion of the public and as immediately alluding the product/service to which it applies." The law clarifies that marks must be known by the public in general, not only those who buy the goods. In fact, marks known by a specialized public only are not considered "well known marks."
In a trademark infringement actions, plaintiffs must (a) compare both marks; (b) compare the goods or services to which the mark applies; and (c) determine whether there is an act of infringement. The French law specifically lists the acts that constitute trademark infringement,
1. unauthorized reproduction, use, or affixing or a mark; and the use or reproduction of marks for goods or services identical to those designated in the registration. L.713-2. Thus according to this, the mere use of an unauthorized reproduction constitutes infringement under the French law.
2. suppression or modification of a dully affixed mark. L.713.2;
3. reproduction, use, or affixing of a mark; or use of a reproduced mark for goods or services that are similar to those designated in the registration. L.713.3;
4. imitation of a mark and the use of an imitated mark for goods or services that are identical or similar to those designated in the registration. L.713.3.
Courts of First Instance have jurisdiction over infringement cases in France. The burden of prove is on the plaintiff; plaintiffs may provide evidence of infringement such as dated advertising; seized goods; contracts or offers to sell; etc. Jurisdiction may be found where the defendant resides or at the place of infringement (ratione loci). Therefore, foreign defendants may be brought to French courts by asserting the place of infringement as jurisdictional basis.
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| | IBLS Graduate Fellowships for E-Commerce Masters in Law | | | IBLS Jerry McGlothlin jmcglothlin@ibls.com, Phone: 1.949 756 0906.
| | | Internet Business Law Services (IBLS), www.IBLS.com, has established Graduate Fellowships for E-Commerce law specialization in Masters in Law in International Tax and Financial Services offered by Thomas Jefferson School of Law, http://llmprogram.tjsl.edu/.
Started in 1998, the LLM Program remains the first and only one to offer graduate law degrees through an entirely online course of study at an American Bar Association (ABA) accredited law school.
The student body adds an interdisciplinary element to the educational experience. Although individuals with law degrees make up roughly half of the student body, the other half is drawn from the fields of accounting, finance, economics and other business disciplines. The result is an educational environment that permits the students to learn as much from each other as they do from the professors. Eventually, each student will belong to a growing international network of alumni who work in the most influential law firms, financial institutions and government agencies throughout the world.
Some of the E-Commerce Law courses offered are: Introduction to E-Commerce Law, Cyber Crime and Techno-torts, Online Privacy Law, Online Contracting, Global E-commerce Taxation and Intellectual Property.
Registration for the Summer 2008 is now open. There is a limited number of fellowships available so please apply immediately. The summer Program is scheduled to start May 19th, 2008. For more information please contact Jerry McGlothlin at jmcglothlin@ibls.com
About IBLS: Internet Business Law Services (IBLS), www.IBLS.com, is an online legal platform for global Internet and E-Commerce laws and has attained the highest respect of the international business and legal community as the leader in Internet and E-Commerce law. IBLS has built a system for sourcing, assembling and distributing content on a global basis and has linked up all activities into a seamless global operation.
IBLS Global Legal Network represents the largest international network of law firms and attorneys specializing in Internet law. IBLS has a balanced portfolio of IP assets: Internet Law Digital Library, Internet Law E-Books, Online Course Material, Diploma Programs in E-Commerce Law, Internet Law Blog - "Ask the Expert" and Internet Law News Portal. In addition IBLS Global E-Commerce Council (GECC) represents a knowledge community of E-Law specialists who are actively shaping the future of E-commerce from both a regional and international perspective. Read more... |
| | Argentina Modifies its Criminal Code to Include Information Technology Crimes | | | IBLS Editorial Department
| | |   Argentina approved law 26388 (2008) that updates its criminal code and sanctions information technology crimes. On June 4th, and after numerous debates, Argentinean "Camara de Diputados" typified as crimes the following conducts (a) the distribution and possession with the intent to distribute child pornography; (b) e-mail violations; (c) illegal access to information systems; (d) distribution of virus and damages to information systems; (e) aggravated crimes against information systems; and (f) interruption of communications. The new law will become part of Argentinean Criminal Code.
Article 128 of the Argentinean Criminal Code now sanctions with prison of 6 months to 4 years those who produce, finance, offer, trade, publish, facilitate, divulge, or distribute, by any means [this includes the Internet], sexually explicit images of persons under 18. Article 128 also sanctions those who possess minors' sexually explicit images with the intent to distribute or trade them; for this crime, criminals will receive from 4 months to 2 years in prison.
Criminal Code chapter III, title V, was renamed with the title "Violation of Secrets and Privacy." Within this chapter, article 153 was modified to include violations of electronic communications. Those who access and obtain, without authorization, an electronic communication, letter, attachment, fax, telegraph, may be sentenced from 15 days to 6 months in prison. Thus, it is now a crime in Argentina to access e-mails without authorization. The new law also makes a crime to delete or detour electronic communications by persons other than their addressee. Unauthorized interception or capture of private electronic communications is also sanctioned under the new Argentinean law (this may cover VoIP communications). Unauthorized access to private or public databases and information technology systems became a new type of crime in Argentina, sanctioned with prison time. Violation of databases, including revealing information to third parties, became a punishable under the new law.
Regarding damages to information technology systems, Law 26388 established that those who alter, destroy, or unlawfully use information systems, including their programs and documents; or introduce virus to those systems, may be sentenced to prison for up to 4 years.
Finally, Law 26388 makes it a crime to alter, conceal, or destroy electronic communications or documents that will be used as evidence in legal proceedings; this crime carries a sentence of up to 4 years in prison.
Argentinean Law 26388 definitely includes a comprehensive set of regulations against information technology crimes. Yet, the sentences imposed are not as harsh as they are in other countries; especially taking in consideration the intricate congressional process any modification of sentences involves. (Argentina has a civil law system).
Read more... |
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Featured Article
TAXATION OF OFFSHORE E-COMMERCE
The growth of offshore e-commerce raises many new issues for governments, tax authorities, and legislators; and the question of taxation is by far the most challenging of these. E-business entrepreneurs need to keep abreast of the recent developments concerning the taxation of offshore e-commerce.
High-tax governments feel threatened by tax leakage resulting from offshore e-commerce activities. Offshore e-commerce blurs key concepts used in the existing structure of taxation, such as the concept of residence. All governments agree that new initiatives have to be taken on a global level, but there is no clear sign that such a coherent approach is going to emerge any time soon. As a consequence, e-businesses should be extremely cautious when establishing offshore corporate structures. It is very unlikely that tax collection agencies in high tax countries will tolerate tax avoidance by businesses that simply rent space on a computer in an offshore tax haven and then operate that remote computer over the Internet from an office or home located in the same high tax country.
What is the problem?
From a tax standpoint, the main problem relates to the flexibility of the Internet. The possibility to perform transactions at a distance raises several difficult issues, such as determining the location of a transaction. The question of whether websites and servers through which e-commerce transactions are made constitute a taxable presence in an offshore jurisdiction is addressed in the summary entitled: "Permanent Establishment and Offshore Taxation.") The development of e-commerce also raises entirely new issues, such as the taxation of digital products delivered over the Internet.
What is to be expected regarding the taxation of offshore e-commerce?
It can be expected that governments will make it more difficult for e-businesses to avoid taxes on their offshore activities. Some existing tax schemes might be brought to courts by the tax collection agencies, such as the following:
In the case of a US citizen using an Internet server located in an offshore jurisdiction, the US government will look at where the real work is being done. If the entrepreneur is physically present in the US and there is no substantial physical business presence in the tax haven, there is a risk that the IRS will challenge the scheme.
A US entrepreneur who avoids US taxes by operating a cyber business from a server located in an offshore jurisdiction and processing the business through an offshore corporate structure such as an International Business Corporation ("IBC"), might face the application of specific rules regarding US controlled foreign corporations. Some of these rules are aimed at preventing US persons from diverting profits from a related US company to a foreign corporation (IRC Sec. 951-964). More generally, Congress has adopted several complex sets of rules to keep US persons from using foreign entities to defer or avoid US taxes in ways Congress deemed improper. Those sets of rules include special tax consequences for US persons who transfer property to or own the following: (i) Foreign personal holding companies (IRC Sec. 551-558), (ii) Controlled foreign corporations (IRC Sec. 951-964), (iii) Foreign investment companies (IRC Sec. 1246-1247), (iv) Passive foreign investment companies (IRC Sec. 1291-1298), (v) Controlled foreign partnerships, and foreign trusts (IRC Sec. 671-679.)
The US tax code also has a provision (IRC Sec. 367) that imposes immediate capital gains taxes on the transfer of various kinds of appreciated assets, including intangible assets, to a foreign corporation in exchange for stock in that corporation. To avoid this problem, the US entrepreneur would need to capitalize the foreign business with cash or pay a capital gains tax on any appreciated assets that are transferred to the foreign corporation.
The borderless nature of e-commerce makes it more difficult to define where income is earned, a product is purchased, or value is added. As a result, governments are having a hard time determining at what point profits are made and what country is allowed to tax them. The use of offshore tax structure by e-businesses adds further confusion to the existing difficulties and ambiguities. As a result, and pending global legislation, governments' attempts to limit the benefits to be gained from offshore e-commerce should be carefully watched.
IBLS Editorial Staff Attorney
Links:
Links: Laws
Internal Revenue Code (in English)
Links: Laws
Internet Tax Freedom Act (in English)
Links: Publications
Global E-Commerce Taxation, "International Tax Issues in Global E-Commerce" (in English)
Links: Author
Vernon K. Jacobs and J. Richard Duke, "Internet Taxation" (in English)
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