to Legal Issues
Chaninat & Leeds
Co., Ltd., Thailand Attorneys
© Thailand Law Forum, 2000. All Rights Reserved
Introduction: The objective of this article is to provide an overview
of legal issues involving the use of the Internet, with a focus on commercial
users of the Internet, such as merchants and other businesses. Many of
the issues discussed in this article relate to areas that are common to
different nations and jurisdictions. Where applicable, reference has been
made to existing Thai law and proposed draft legislation in Thailand.
However, the law of the United States has been referred to liberally,
because the United States is both the world leader in the technology behind
the Internet and also in terms of legislation and case law relating to
Internet law issues. A.
II. Email: Liability
and Exposure B.
Nature of the Problem:
and Privacy of Email: Often, persons may feel a false sense of security
when using email. Many believe that email has assurances of privacy and
confidentiality that it does not in fact have. Every email sent is typically
copied in several places, including: (1) the sender computer, (2) the
service provider's computer, (3) the recipient's computer, and (4) if
one uses a commercial email provider, by that company's system computer
as well. As a result of this misplaced confidence in email, persons may
transmit communications that they would otherwise be more cautious about
Concerns: Employers' concerns include: (a) preventing their employees
from leaking sensitive, confidential or insider information (b) detecting
employee theft and crime and (c) preventing vicarious liability based
on the tortious acts of their employees. Chat groups and bulletin boards
are a related problem: Chat groups and bulletin boards are areas where
Internet users post messages in public forums concerning special areas
of interest. Employers have challenged employees posting messages concerning
their business's confidential information on Internet chat groups and
bulletin boards. Legal challenges by employers have focused on breaches
confidentiality or the disclosure of trade or other commercial secrets.
Legal cases in the United States have involved suing chat room service
providers to disclose the identities of employees posting sensitive information.
Statement: Companies and individuals using email include should include
confidentiality statements warning persons who intercept the email that
the communication is private, should not be used or disclosed to third
parties and that they should immediately notify the sender. (2)
Reminders can include a statement to employees that the email they are
using is intended for business purposes only. It is also advised that
there be a reminder that email system being used is not encrypted and
may be subject to interception by third parties. Highly sensitive or private
communications should probably not be sent by standard email, but should
be encrypted instead. (b)
law from the United States demonstrates that email carries an expectation
of privacy that can be legally protected. However, other factors can be
considered, such as a "for business use only" warning to employees, that
would allow such email to be disclosed to employers. Courts in the United
States have also ruled that email documents may be subpoenaed for use
have challenged a third party's rights to disclose or to subpoena their
email based on legal defenses that include invasion of privacy and assertion
of wiretapping and eavesdropping Statutes (c)
regarding thailand company registration privacy: Businesses should develop specific policies
concerning their email usage that requires personnel to acknowledge and
agree to the business's policy before logging on: The policy acknowledgement
and recognition statement can be in the forum of a "log-on screen" that
requires the user to enter his password as confirmation. A.
Encryption programs are used to encode email so that only the intended
recipient can decipher the code. The higher degree of complexity of the
encryption, the more difficult it is to decode. This is know as having
a "longer key". Governments have attempted to place restrictions on the
level of encryption that can be used. (2)
Another form of protection is known as a firewall. A firewall is a computer
that passes data back and forth between the Internet and one's own computer
and blocks anything else. This protects the computer user from Internet
criminals such as hackers and crackers. (3)
and document deletion: One of the methods a company or individual can
protect itself is top have periodically deletions of all accumulated data
and emails. This would be the equivalent of a cyber-shredder.
Information from Competitors A.
methods of protecting proprietary information over the Internet include
registration and enforcement of intellectual property rights, including
the registration and enforcement of one's domain name. B.
Name Registration: Domain Names are registered through the international
domain name registration directory, known as "Internic". Domain are the
names used as a convenient way to locate information on the Internet and
they correspond to Internet protocol numbers. (1)
are various registration agents that are authorized to submit domain name
requests to Internic. (2)
Squatters: Cyber Squatters are persons who register domain names speculatively,
in order to sell them at a later date. This has become a developed industry
with companies that are exclusively focused on being domain name merchants.
If the domain name is not currently associated with a registered business,
the practice is totally legal. There is currently a domain name dispute
policy that has been set up by Internet Corporation for the Registration
of Assigned Name and Numbers (3)
rights Overview: (1)
is a member of the World Trade Organization (WTO). Pursuant to the WTO,
Thailand entered into the Trade Related Aspects of Intellectual Property
Rights (TRIPs) Agreement. Pursuant to ther TRIPs agreement Thailand has
enacted laws to protect intellectual property rights. The most important
of these laws for the current topic are: (a)
The Trademark Act
B.E. 2534 (1991) (b)
The Copyright Act
B.E. 2537 (1994)
(2) Remedies Available
(inter alia) for Enforcing Intellectual Property Rights: (a)
and Trademark Infringement: If the domain name registration involves a
commercial use, it may be an infringement of a tradename of an existing
tradename. Commercial use must be involved. Generally, mere registration
is not sufficient grounds for infringement. (1)
Trade Name Infringement
Factors include: 1 (a)
degree of similarity
between the marks in appearance and suggestion (b)
similarity of products
or services being offered (c)
area and manner of
current use (d)
degree of care likely
to be exercised by consumers (e)
strength of complainants
Example: In Intermatic v Toeppen, a United States case, the intent on
the part of alleged infringer was to palm off his products as those of
another, the Court stated that the issue is not whether mark will be confused
but whether use of similar mark will cause consumers to confuse source
of goods or services with those of the senior mark owner. Intermatic v
Toeppen 947 F. Supp. 1227 (N.D. Ill. 1996) at 1235 (3)
Statutes: Dilution Statutes protect the value of a trademark and can be
used in addition and in concurrence with infringement actions. Statutes
allow for Injunction against another's use in commerce of a mark or trade
name if such use begins after the original owner's mark has become famous
and the new mark or tradename causes dilution of the distinctive quality
of the mark: Factors used in determining whether dilution has occurred:
(a) Inherent distinctiveness
of the mark
(b) Duration or
extent of use of mark in connection with goods
extent of trading area
(d) Channels of
trade where used
(e) Degree of recognition
of mark in channels of trade
(f) Nature and extent
of use of same or similar marks by third parties.
(g) Was mark registered?
E. Copyright Act
and Infringement: (1)
Principles: A copyright is a statutory right that gives the owner of original
artistic works the exclusive right to publish and reproduce the work,
and prepare other works from the original work.
Thailand the author of a work is automatically entitled to copyright upon
the creation of a work without filing a registration. However, to come
under the Thai Copyright Act of BE 2537 (1994) the work must be advertised,
unless the person is a Thai National or the national of a nation that
is a signatory to International Copyright Convention to which Thailand
is a party.
a person adapts, distributes, copies, prepares a derivative work, displays,
records or publishes another's copyrighted work without a license to do
so, that may be an infringement of that person's copyright. (2)
of Fair Use: The doctrine of fair use provides various exceptions that
allow for the fair use of another's copyrighted work. Generally stated,
these exception include:
(b) criticism (a)
news reporting (b)
teaching plus four-part
Case Law Examples:
FL v. National Association of Fire Equipment distributors No. 96 C 2966
(N.D. Ill. Nov 13, 1997) National Assoc. of Fire Equipment Distributors
has a web page. Operator of web page received off for Clip Art and sent
some blank disks and received images of firefighter related art. Which
he placed o the organization's web page. The images were copyrighted property
of the plaintiff. Plaintiff sued after sales fell at Marobie's website.
The court found that even though the organization was non-profit m and
did not sell clip art its use could still be considered a commercial one
because it promoting the organization and raised advertising revenue.
Not use d for traditional fair use uses.
Tasini V New York Times 93 Civ 8678 (SS), SDNY Aug 13 1997. A person may
be liable for copyright infringement even with no intent to infringe.
A number of freelance writers sued various electronic distributors claiming
that, when the authors sold the right to their articles the rights conveyed
did not include the "reuse" in electronic databases.
Tasini case demonstrates and elementary principle of copyright law: that
the only rights a licensee is entitled to are those acquired from the
copyright holder. The publishers had only the initial rights obtained.
However, publishing a compilation of works which is comprised of elements
of separate works may, under certain circumstances, be allowed.
Playboy Enterprises Inc. v. Webworld Inc. 968 F. Supp. 1171 (N.D. Texas
1997) ("Weworld case") Sexually explicit pictures found on Usenet groups
many form Playboy a magazine Pictures were illegally scanned from Playboy's
magazines and distributed via Usenet News. Webworld therefore acquired
no rights from the copyright holder.
Religious Technology Center v Netcom On-Line Communications Services Inc.,
907 F. Supp. 1361 (N.D. Cal 1995) ("Netcom case") The court refused to
hold an internet service provider liable for the distributing of copyrighted
material over the Internet via Usenet News. The Court reasoned that the
provider did not engage in any volitional acts but only set up a machine
to provide access to Usenet news with regard to the infringing material.
difference between the Webworld case and the Netcom case would therefore
seem to be that because Websold archived the material it made the material
part of its website, whereas Netcom merely provided access to the materials.
Also, Netcom was in the business of providing Internet connections whereas
Webworld earned fees only from its web site.
IV. On line Fraud
and Protective Countermeasures A.
Fraud General Background: Internet Fraud is becoming an increasingly serious
problem due to the following factors:
Internet provides easy access to new players with relatively low start
up costs. This imparts the ability to create a significant Internet presence
and the appearance of being an established company without the traditional
costs associated with such a task.
Multi-jurisdictional Nature: Fraudulent Operators may feel protected because
they operate outside of the jurisdiction where their victims are located.
Anonymity: Fraudulent operators may feel protected by the sense of anonymity
(although this might be a misplaced feeling) that the Internet provides.
Thailand Laws: Thailand has no special laws concerning Internet fraud.
There are current draft laws being considered concerning electronic signatures
and electronic commerce. However, existing laws in Thailand may govern
fraudulent transactions on the Internet, for example:
The Thailand Penal Code Section 341: This section proscribes fraudulent
conduct against another through deception or through not revealing material
facts for the purpose of taking property or causing to damage to another
person or causing another person to renounce a document.
The Consumer Protection Act: The intent of this Act is to provide consumers
protection against deceptive trade practices. C.
Law Enforcement Efforts on the Internet: The U.S. Federal trade Commissions
and various State Attorney generals have "surf days". These are periods
where the agents of these governmental regulatory agencies peruse the
Internet, concentrating on particular consumer areas in order to locate
fraud and deceptive practices. In the past, frequently investigated areas
(1) Pyramid schemes
(2) Business opportunity
(3) Health claim
Example of Online Fraud (The Inter-nic incident): Inter-nic is listed
at www.internic.net and was formerly run by Network Solutions under the
auspices of (the U.S.) National Science Foundation. At the time of the
dispute, Inter-nic charged 100 USD for domain name registration. In contrast,
www.internic.com was an Australian company that charged 250 USD for the
service of registering domain names, whose web site was designed to appear
similar to the official Internic site. The United States Federal Trade
Commission ("FTC") stated that the Australian company is likely to be
in violation of the FTC Act. Aggravating factors included that the Australian
company had not actually paid for all domains it had registered, further
International Domain Registration System: Internic is the current agency
charged with the registration of domain names
The Internet domain name system (DNS) consists of a directory of domains.
Persons must register a formal domain name with registered agents. The
system permits enforcement of trademark, consumer protection and other
laws. There is a new agency responsible for accrediting the registrars
of domain names. This is a new non profit corporation that is assuming
responsibility from the U.S. government, and is called the Internet Corporation
for the Registration of Assigned Names and Numbers ("ICANN"). All ICANN
accredited users follow a uniform policy dispute resolution policy. Pursuant
to that policy, disputes over domain registration are ordinarily resolved
by court litigation between the parties claiming rights over the domain
name the entitlement to the domain name. In disputes arising from registration
illegally or abusively made such as "cyber-squatting and cyber-piracy",
the uniform policy provides an expedited administrative procedure to allow
the dispute to be resolved with lower costs and delays than encountered
in traditional court litigation. The process begins with a petition being
filed with one of the dispute resolution service providers.
Model Law on Electronic Commerce of UNICTRAL ( United Nations Commission
on International Trade Law): This is a model law and therefore has no
effect in itself but is used as model for nations to follow in drafting
their own laws. Model laws are considered necessary in order to assure
some uniformity in e-commerce, which, by its nature, is multi-jurisdictional
Disputes on the Net
General Principles of Contract Formation Apply: In Thailand, these principles
would be embodies in the Thailand Civil and Commercial Code.
Principle of offer and acceptance on the Internet. Offer and Acceptance
are one of the basic concepts of common law. Generally, an acceptance
must be the "mirror image" of the offer. Over the Internet, an acceptance
is made on many web site by clicking a button that states agreement. However,
in more extended email negotiation, the offer and acceptance may have
to be inferred over the course of communication.
Thailand's New Draft Laws: Thailand has new draft laws concerning e-commerce
that will make it easier to form contracts and enforce contacts over the
Internet. These draft laws are:
(1) Draft Digital
Signature Act: Pursuant to Thailand's new draft Digital Signature Act,
the use of Digital Signatures using accepted encryption technology will
have the same authority as a person's handwritten signature.
Draft Electronic Transaction Act: Section12 of this draft law states that
the offer to make a contract and the acceptance of such an offer may be
made in a data message.
Jurisdictional Issues: Case law from the United States has repeatedly
found grounds for asserting jurisdiction over persons who are physically
located outside of the jurisdiction based on long arm statutes and a person's
significant electronic contact over the Internet. Representative cases
include the following United States case law:
People v. Lipsitz New York Supreme Court 1A Part 8, June 1997. In this
case the defendants were accused of fraudulent solicitation of magazine
subscriptions under a variety of business names and over the Internet.
The defendants tried to rely on the defense that their actions took place
outside of the geographical boundaies of New York. The New York Court
held that the regardless of whether the case came from out of state, the
acts had an effect in New York and violated NY Law. The Court pointed
out that Internet brings nothing new to world of fraud and existing fraud
laws may be adequate.
Compuserve v Patterson, 1996 WL 405356 (6th Cir.(Ohio)), No. 95-3452,
July 22, 1996) This case used "long arm jurisdiction" to establish jurisdiction
over non residents if their acts met the definition of "transacting business"
The Court concluded that there was sufficient contacts to give the state
jurisdiction even though those contacts were electronic contacts.
Playboy Enterprises, Inc. v. Chuckleberry Publishing Inc., S.D.N.Y. No
79 Civ 3525 (SAS0, June 19, 1996.) An Italian company was accused of infringement
of its Playboy's trademark rights. The issue for the Court was whether
jurisdiction was established in the US based on the actions of the Italian
web site. The Court determined that, although the web site was physically
located in Italy, there were sufficient contacts with the USA to conclude
that the Italian company was soliciting US customers through their web
site. Activities on the web site included, receiving faxes and emailing
passwords to US consumers.
Practical Considerations for Minimizing Liability for Web sites:
(a) Disclaim warranty
as to merchantability or fitness for particular purpose, when applicable.
(b) If the site
has editorial content, disclaim any guarantee as to the accuracy of the
information, when applicable.
(c) Disclaim any
warranty as to the accuracy or reliability of sites to which your web
Indemnification: Require acknowledgement that the web site visitor agrees
to indemnify the web site owner for any damages caused, when applicable.
Formal Linking Agreements: Case law from the United States has held that
the listing of links to other websites is in the nature of a database,
and does not require formal linking agreements. However, if there is likely
to be any controversy concerning said links, a formal agreement is advised.
(4) Checklist for
(a) Ensure all terms
displayed in clear simple language
(b) Use page prompts
to encourage consumer to scroll through terms and conditions.
(c) State that agreement
online is the sole exclusive agreement and final
(d) Offer telephone
line to provide explanation of any terms the consumer does not understand.
(e) Include warranty"
that the person indicating acceptance has the authority to do so.
(f) Good record
(g) For larger purchases
get a fax back signature
Get traditional hard copy agreement with long term trading, business partners,
large contracts or when you require more assurance from the other party.
Conclusion: The purpose of this article has been to provide an overview
of commercial legal issues involving the use of the Internet. Internet
legal issues have a particularly international character because of their
multi-jurisdictional nature. Thailand is still in the process of forming
its Internet legal infrastructure. Nevertheless, reference has been made
to existing Thai law that may be applicable and proposed draft legislation
in Thailand. Recognition has been given however to the law of the United
States which is currently the world leader in Internet technology and