Notes from the 3rd E-commerce Roundtable, 12-2 PM Tuesday, June 13, 2000.

This Roundtable was held at the US PIRG Office, Washington DC and chaired by Ed Mierzwinski

The following people attended the June 13, 2000 Roundtable:

Jeff Kovar, State Department
Joel Yudken, AFL-CIO
Corian Matiesanu, Benton Foundation
Katharina Kopp, Benton Foundation
Serge Wroclawski, Essential Information
Link Hoewing, Bell Atlantic
Sarah Deutsche, Bell Atlantic
Derrian Delaney, IPPN
Lawrence Hecht, IPPN
Andrew Kimbrell, CTA
Teri Rucker, National Journal's Tech Daily
Declan McCullagh, Wired News
Nicholas Morehead, Wired News
Reuben Bushnell, Consumer Project on Technology
Vergil Bushnell, Consumer Project on Technology
Jamie Love, Consumer Project on Technology
Charlie Cray, Multinational Monitor
Michael Donohue, Federal Trade Commission
Maneesha Mithal, Federal Trade Commission
Kate Rodriguez, Department of Commerce
Robert Cannon, Federal Communications Commission
Sarah Andrews, Electronic Privacy Information Center
Harold Feld, Media Access Project
Sarah Anderson, Institute for Policy Studies
Ed Mierzwinski, US PIRG
Jerry Mander, International Forum on Globalization
Brian Kahin
Robin Miller, Slashdot.

Topics Under Discussion

1. HAGUE CONVENTION ON JURISDICTION OF PRIVATE LAW

- Jeff Kovar from the Department of State presented an update on the Hague Convention, continuing the discussion led by Brian Hengesbaugh (Department of Commerce) at last month's Roundtable.

- The rationale for the treaty is as follows:

-Although the U.S. leads the world in enforcing foreign judgements, it is currently very difficult to get American civil judgement enforced overseas.

- European countries have said they have to limit U.S. jurisdiction

-The Hague Convention will create new rules for jurisdiction.

- The U.S. entered into talks in 1992 and negotiations in 1996 to create international rules of jurisdiction. The resulting judgements would be enforceable.

-Originally, negotiations for the Convention were supposed to be concluded in November 2000. Instead, negotiations will go into a two-part schedule, including future meetings on e-commerce and intellectual property. These meetings may be held in Geneva and Ottowa, respectively, although the dates have not yet been set.

-The current version of the Convention that is being discussed is a preliminary draft from October 1999. This preliminary draft Convention is available from the Hague Conference on Private International Law's website (http://www.hcch.net/e/conventions/draft36e.html).

- Interest in the Convention cuts across the spectrum of civil litigation in the U.S. Any group of lawyers with any significant interests dealing with litigation will be interested in the Convention. This makes it difficult to work through all of the various constituencies.

- A hypothetical example was brought up to illustrate some problematic aspects of the Hague Convention. Under the Convention, if a citizen of the U.S. published something on the Internet, someone could sue him in England for libel, and money may be taken away from him in the U.S. Under the Hague Convention, one could be sued in foreign country, and have to defend himself under a foreign judge in that country.

- The first two articles of the Convention deal with its scope. Articles 3-20 relate to rules of jurisdiction -- what types of cases are in or out. Article 18 will prohibit some types of cases. Article 24-to the end of the Convention deals with rules of recognition and enforcement.

- The current draft Convention has lot of problems, and is probably not ratifiable in U.S. as it stands. Largely because of this, the negotiating schedule has been extended to 2002.

- Article 7 of the draft Convention that has galvanized the e-commerce industry and consumer groups. Europe, under the Brussels Convention, has a very strong place of origin rule for litigation involving consumers. This rule prohibits a company from entering into an agreement ahead of time with a consumer that would determine the forum in the event of litigation. This type of language is reflected in Article 7 of the Convention, but was opposed by the U.S. The opposition comes from U.S. e-commerce firms who will not support the right of a consumer to sue in their home jurisdiction.

- Meanwhile, a parallel process is going on as European nations work with changes in their own internal rules such as the Brussels Convention.

- Much of the focus of the Hague discussion regarding e-commerce has been on how Alternative Dispute Resolution (ADR) might complement or even replace national legal remedies. For example, in September1999, Professor Catherine Kessedjian (Deputy Secretary General of the Hague Conference on Private International Law) proposed that sellers doing business online could go through a certification process with "minimum substantive rules of protection for the consumer"and that business-led codes of conduct and self-regulation policies could supplant national laws concerning privacy and other consumer protection issues. (See http://www.hcch.net/e/events/press01e.html).

- To be an observer at the Ottawa meeting, you must be credentialed by an international organization, or be included in a country's delegation.

- Interest in the Hague Convention is growing, as is the number of business groups attempting to voice their concerns about the Convention. Groups or individuals that wish to participate in the process can consult the State Department directly. Contact Jeff Kovar (kovarj@ms.state.gov) to subscribe to the relevant email list to be notified of developments.

- In October 1999, the governments participating in the Hague Convention agreed they would hold at least two more speciality meetings–one on intellectual property (IP) and one on e-commerce. The first e-commerce meeting was held in Ottawa in February 2000. The IP meeting has not be scheduled yet. The IP meeting will be organized by WIPO, probably for early next year. It looks as if there will be second e-commerce meeting, also in Ottawa, maybe January or February 2001. The State Department held a meeting on IP issues in March 2000, and a session at Fordham Law school in April on international IP issues. The University of Washington law school will host an IP meeting in Seattle in July 2000. It is expected that consumer issues will be a major topic in the next e-commerce meeting in Ottawa.

- At one point there was a proposal by some persons in the negotiations to exclude e-commerce from the scope of the Hague Convention. However, the prevailing sentiment is that e-commerce must be addressed in the Convention.

2. (APEC) CONSUMER PROTECTION WORKSHOP, Bangkok, Thailand, July 20-22, 2000.

- Jonathan Menes of the U.S. Department of Commerce briefed the Roundtable on the upcoming APEC Consumer Protection Workshop.

- APEC -- the Asia Pacific Economic Cooperation -- is essentially a grouping of 21 economies. Some economies involved in APEC are not countries, for example, Hong Kong. The APEC region includes the west coast of Latin America and Russia.

-E-commerce issues were handled for a while by the APEC telecommunications working group. In 1997, at the APEC leader's meeting, a decision was made to set up a task force and develop a blueprint for e-commerce that set out a framework for a workplan. One of the key elements of this framework was promoting a seamless legal and regulatory environment.

- The goals of this workplan include the promotion of emerging markets and the removal of barriers to e-commerce.

- Currently, many APEC economies do not have rules and regulations in e-commerce areas.

- A steering group was set up to help implement the e-commerce blueprint in 1999.

- The issues of best practices and consumer protection represent APEC's first foray into the e-commerce policy regulation area. The approach is to come up with general procedures to ensure that the rules countries adopt are compatible with each economies.

- One initiative in APEC is called readiness assessment, covering everything from physical infrastructure to legal rules, for member economies to understand what they need to do to develop and promote e-commerce. An APEC survey is being conducted to find what consumer protection rules the member economies have.

- The U.S. Department of Commerce has worked with the U.S. Federal Trade Commission to develop an outline for the APEC program. The U.S. government has held informal meetings with the private sector and consumer groups about the Consumer Protection Workshop. The U.S. government's work with APEC can be found at www.ecommerce.gov/apec.

-Participation in APEC by non-government people, business or otherwise is a sensitive subject. Such participation has to be approved on a case by case basis and one APEC member can object, which occurs. The July 20 workshop in Bangkok will include business and consumer representatives as well as government officials. For the actual steering group meeting which follows the workshop, the U.S. delegation can and will include non-government people.

- The draft agenda (dated March 29, 2000) for the July 20 Consumer Protection Workshop in Bangkok can be found at www.ecommerce.gov/apec/meeting/072000/cpworkshop.html. The agenda includes sessions on private codes of conduct and self-regulation, but also the role of consumer advocates and other NGO's in consumer protection, and cross-border law enforcement.

- Questions were raised about the opportunity of consumer groups and other NGO's to have a voice in APEC and whether the government has funds to pay for travel. Mr. Menes indicated that no funds were available to pay for non-government participants in this e-commerce meeting. Thus, it may be easier for business representatives to attend meetings since they are more likely to be able to pay for the travel. According to Menes, an attempt was made to make the APEC steering group virtual, but it didn't work. To date, there has been no success in holding APEC discussions in an electronic form.

3. VERIZON / 2600 DOMAIN NAME DISPUTE

Sarah Deutsche of BellAtlantic met with the Roundtable to discuss the Verizonreallysucks domain dispute.

- Bell Atlantic has had problems with cybersquatting, with over 1000 alleged infringements, including traffic that was diverted to porn sites, and people trying to sell names back to Bell Atlantic. Bell Atlantic has been actively policing its brand.

- After the merger between Bell Atlantic and GTE was announced -- by April 30 – Bell Atlantic had discovered over 200 domain names using the name "Verizon". Bell Atlantic said it was trying to protect customers from confusion. As of today, the number of domain names with "verizon" exceeds 300.

- Bell Atlantic decided to investigate each site using the "Whois" database, and determine if each site was legitimate and active. A whois search revealed that verizonreallysucks.com was registered to "Emmanuel Goldstein". Bell Atlantic determined that the verizonreallysucks.com site was not active, with no content. Cease and desist letters were sent out by Bell Atlantic.

- According to Deutsche, Goldstein made the site active after receiving the cease and desist letter, and said that Bell Atlantic sent the letter to 2600 Magazine (The "Hacker Quarterly," edited by Goldstein). The other 200 instances in which they wrote, included sites with "verizon" in their domain names.

- After getting the cease and desist letter, 2600 registered the "VerizonShouldSpendMoreTimeFixingItsNetworkAndLessMoneyOnLawyers.com" domain.

- Whois is slowly being appropriated by different registrars, which makes it difficult to find if a particular register is "warehousing" domain names.

- Deutsche claimed that "sucks" sites represent a grey area for trademark holders, who cannot always assume such sites are legitimate. She said that fair use says that a trademark holder can't assume register of a "sucks" site had bad faith and mentioned that some "sucks" domain names containing trademarks are put up for sale. Deutsche claimed that domain names incorporating trademarks and the word sucks may tarnish the reputation of the business. This point was met by several criticisms. First, criticizing a firm is not limited to domain names; newspapers such as the New York Times criticize businesses through their editorials. How could a web site based on criticism of a company be judged illegitimate? It is apparent from very name of 2600's web site – "verizonreallysucks.com" – that it is a site critical of Verizon, and not owned by Verizon.

- Media corporations initially were heavy handed in their responses to fan sites. Now smarter ones take a more delicate first approach instead of firing off cease-and-desist letters.

- Deutsche could not identify a single U.S. court decision where a domain with the word "sucks" was taken away from a domain name holder. However, it was pointed out that threats (such as cease and desist letters) are usually enough to get a site taken down. In general, the threat goes away after hiring lawyers. A company might have more credibility in the free speech, consumer communities if it break ranks with other companies in hard-line trademark enforcement.

- The notion that site needs to be active to be legitimate was questioned. For instance, is a domain name like verizonreallysucks.com not legitimate if its owner intended to use it for criticizing Verizon at a later date?

- Discussion turned to the creation of new top-level domain names, especially ".sucks" and . ".union." .sucks domains would be allotted for criticism sites, and would not be allowed to be sold back to the company that holds the associated domain. .Union domains, such as "verzion.union" could be used as a gateway site for unions representing workers at Verizon.

4. E-COMMERCE NEGOTIATIONS FOR THE PROPOSED FREE TRADE AREA OF THE AMERICAS (FTAA)

Regina Vargo of the Department of Commerce briefed the Roundtable on E-commerce negotiations for the proposed FTAA.

- FTAA negotiations were started in December 1994 in Miami where a goal was set to finalize the FTAA no later than 2005. Actual negotiations were launched at the second summit roughly two years ago.

- The U.S. supported a dialog with Latin American countries creating a joint committee of experts (government and private sector) to make recommendations to FTAA ministers on e-commerce issues.

- The committee, which met four to five times in an 18-month period, took a broad overview of e-commerce issues, such as encryption, privacy and intellectual property rights.

- A report was issued to FTAA ministers (found at http://www.ecommerce.gov/PressRelease/ecom-01.html website) in November 1999. Consumer protection was one of the last issues taken up. On consumer protection, five recommendations were made.