Newsletter of the ABA Section of Business Law Committee on
  Cyberspace Law
March 2009
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Message From the Chair

Message From the Newsletter Director

ABA Section of Business Law Special Presentation
April 16, 2009, Vancouver, BC

The EU Payment Services Directive – What it Means for US and Canadian Businesses

Featured Articles
  EU Commission Proposes New Rules Streamlining Use of Electronic Invoices in Europe
  Bankruptcy and the Software License
  What Limits For Behavioral Targeting?
  Red Flags Rule – Will You Be Compliant or Complacent?

Newsletter Director:
    Alan S. Wernick
    alan@wernick.com
    847.786.1005
  Message from the Chair
   
Committee Chair, Michael Fleming Michael Fleming
Chair, Committee on Cyberspace Law

As we approach the second of our Committee's major meetings during the bar year, the Business Law Section's Spring Meeting, it seemed a good time to reassess the services we can provide to our committee members who, for whatever reason, are not always able to join us at the physical meetings.

Frankly, even as we get well into the twenty first century, and even for a bar group dedicated to the use of technology to communicate and do business, we still find that the face-to-face meeting is one of our most important means to generate enthusiasm and participation. I think of our Winter Working Meeting and its famously wonkish long sessions of friends talking deeply about the topics we love, the Spring meeting with its focus on the business of technology and the interplay with our Section's other committees, and the Annual meeting during the dog days of summer often accompanied by members' families finding a way for a vacation around the bar activities.

But, those of us who are fortunate enough to regularly attend the face-to-face meetings must not forget the nearly ninety percent of our membership that is not so lucky. The dictates of time in the practice of law make attendance difficult for some, and the costs of travel, especially in the recent economy, can be daunting. While we will still encourage those who can to join us, the committee needs to address the needs of those who cannot.

And, we are beginning to address those concerns, albeit in baby steps. This newsletter is one example—By going out to the entirety of the membership, we help to ensure that each of the members are up to date on the committee's activities, and offer a forum for members who would like to write short pieces for distribution to the committee and often to the Section as a whole.

The Committee's program work product over recent years can be found on the Section's web site—The organization and user interface could be a bit better, but the wealth of materials produced by our hard-working members and the guests we've invited to join our Programs continues to be the among the best of legal resources for Cyberspace Law issues. Our former chair Vince Polley produces a fantastic resource that he shares every few weeks with the entire committee membership—The MIRLN newsletter is a must read for all of us.

The Section is experimenting with tools for members to be able to participate remotely with those at the face-to-face meetings, such as webinar or other teleconferencing tools. We hope to have a more fleshed out description of what those tools will be in the coming months, and we will share what we know about them as the details become available.

We experiment with interactive tools and social media, sometimes on an unofficial basis and sometimes within tools being set up by the ABA such as the Legally Minded social networking tool. We Tweeted on Twitter about Winter Working Meeting 2009, and even dedicated a new 'hash tag' (#WWM09) just for our Twitter users to quickly find information about our meeting. And, we will continue to look for more tools to collaborate electronically with our members.

These baby steps are still not enough. The Committee, and bar associations in general, need to continue to look for new ways to maintain the presence of their members in a rapidly changing world. We believe this committee, with its mix of smart technology users (dare we say - the legal geeks?), is well positioned to experiment with these ideas. More importantly, we are also well positioned to explain these tools to the other members of bar groups as well as the firms and institutions we work for. Lawyers are often the among the last to adopt to the changing technologies, but adopt we must—And will.

About the author: Michael F. Fleming is a shareholder at Larkin Hoffman Daly & Lindgren, Ltd., Minneapolis, Minnesota USA, where he practices in commercial and technology transactions, regulatory analysis and compliance, intellectual property and electronic commerce. He can be reached at mfleming@larkin hoffman.com.



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  Message from the Newsletter Director
   
Newsletter Director, Alan S. Wernick Alan S. Wernick
Newsletter Director
The Committee on Cyberspace Law explores a wide range of rapidly changing legal disciplines including electronic commerce and contracts, consumer protection, intellectual property, cyber security & privacy, jurisdiction, internet governance, and online financial activities. This CCL eNewsletter provides our members with an opportunity to help advance members' awareness and understanding of these evolving and dynamic legal issues. Our goal is to make it a useful addition to your practice by helping to make you aware of some of the developments impacting your practice and your clients' businesses, and what these developments mean. This newsletter also serves as a virtual bulletin board of the many activities of the various CCL committees and sub-committees, so committee chairs are encourage to share the news about the interesting activities of your committee. Please contact me if you are interested in submitting short articles or committee news for publication in this eNewsletter, or if you have any constructive comments or suggestions concerning this newsletter. My e-mail is ALAN@WERNICK.COM.

Thanks to our contributors for this issue: Michael Fleming, Francoise Gilbert, Sarah Jane Hughes, and Phillip Schmandt.



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  An ABA Business Law Section Special Presentation -
  April 16, 2009, Vancouver, BC
   
The EU Payment Services Directive - What it Means for US and Canadian Businesses
The Banking Law, UCC, and Cyberspace Committees of the Business Section will host a special presentation entitled "The European Union's Payment Services Directive and What It Means for the United States and Canada" on Thursday, April 16, 2009, in connection with the Business Section's Spring Meeting in Vancouver, BC. The presentation will cover the European Union's Directive on Payment Services and the Single Euro Payments Area. The session will run from 10-11 a.m. PDT.


More...

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  Featured Articles
   
EU Commission Proposes New Rules Streamlining Use of Electronic Invoices in Europe
Phillip Schmandt
Overview

On 28 January 2009 the Commission of the European Union proposed an overhaul of the 2006 EU Directive on Invoicing (Directive 2006/112/EC).1 If approved, this new Directive will fundamentally change how electronic invoicing is conducted in Europe and will affect all companies doing business in Europe. Interested parties are invited to submit comments to these proposed changes no later than 13 March 2009.

The proposed new Directive would make electronic invoices equivalent in all respects to paper ones. It would introduce at least two major changes to existing e-Invoice practices: first, it would eliminate the requirement that advanced electronic signatures be used in electronic invoices. Second, it would eliminate the requirement that the recipient of the invoice consent to receive invoices in electronic form. 2

1 The proposed new Directive (and a link to the original Directive) is available at the following URL: http://ec.europa.eu/taxation_customs/taxation/vat/traders/invoicing_ rules/index_en.htm
2 See Proposal for a New Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing" at Paragraphs 24 and 25.



More...


Bankruptcy and the Software License
Alan S. Wernick
Most companies have software they license for business critical applications. What happens to the business (licensee) if the licensor of the computer software enters bankruptcy? Does the business have to stop using the software altogether or have some restrictions applied to their use? Would the business suffer if it had to stop using any business critical computer programs they currently use? And, if the business fails to immediately stop using the software, will the bankruptcy trustee for the debtor/licensor pursue the business for infringement damages?

Both in good times and challenging economic times, bankruptcy is sometimes the "exit strategy" for some businesses, including software licensors. And, once the licensor's bankruptcy petition is filed, it will only be a matter of time before the licensees feel the impact of that filing.


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What Limits For Behavioral Targeting?
Françoise Gilbert
An individual uses a travel site to check hotels in New York, but does not book any hotel room. Later the individual visits the website of a local newspaper to read about the Chicago Cubs baseball team. While on the newspaper's website, the individual is served an advertisement from an airline featuring flights from Chicago to New York. The method used to develop the consumer's profile - someone interested in travelling to New York from his home base in Chicago - in order to serve target ads is named "behavioral advertising" or "behavioral targeting."


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"Red Flags Rule" - Will You Be Compliant or Complacent?
Alan S. Wernick
The federal "Red Flags Rule" is designed to minimize identity theft. The failure of covered entities to comply can have several consequences, including civil penalties, injunctions, annual reporting, government oversight of the non-compliant business, and loss of trust by the customers of the business.

An amendment to the Fair and Accurate Credit Transactions Act of 2003 ("FACTA") requires covered entities to create programs which must provide for the identification, detection, and response to patterns, practices, or specific activities - known as "red flags" - that could indicate identity theft. The Federal Trade Commission ("FTC"), the federal bank regulatory agencies (including the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Program, and the Office of Thrift Supervision), and the National Credit Union Administration have issued regulations concerning this Red Flags Rule (the "Rule").


More...


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