Cyberspace Law Exam Spring 2001–Eric Goldman/Chuck Schwab

Santa Clara University School of Law  - SPRING 2001

CAMPUS ID: 5793     COURSE: Cyberspace Law   PROFESSOR: Goldman/Schwab    

THESE EXAM QUESTIONS MUST BE RETURNED AT THE END OF THE EXAM.  THE STANDARD EXAM RULES GOVERN THIS EXAM.

5793 Cyberspace Law                         April 28, 2001, 2 p.m.
Eric Goldman/Chuck Schwab               1 hour, 40 minutes
2 Essay Questions                                Open Book (all materials permitted by the exam rules)

PROFESSOR’S INSTRUCTIONS–PLEASE READ CAREFULLY

1.         This is a single part exam with a total time limit of 1 hour, 40 minutes. There are a total of two questions, each weighted 50%.  Because the questions are equally weighted, do not spend more time on one question than the other.

2.         We have the following tips and strategies for you:

2.1       Please outline your answers carefully and deliberately. We recommend that you spend approximately 1/3 of your allocated time reading the question and outlining a response.

2.2              Follow the call of the question.  Target your response to your audience.

2.3              While generally your answers should be based on legal principles, it is always appropriate to address business issues.

2.4              Keep separate legally-distinct parties and their respective rights & responsibilities.

2.5       Additional information may be useful in your analysis.  Please indicate what additional information would be helpful, and then state your assumptions in order to proceed with your analysis.

2.6       PLEASE ANSWER EACH QUESTION IN A SEPARATE BLUE BOOK!  Also, please write your exam number on each blue book.

Good luck and have a great summer!

STOP!  DO NOT FLIP THIS COVER PAGE UNTIL TOLD TO DO SO BY THE PROCTOR!

Question #1 (50 minutes/50% of your score)—to be graded by Chuck

Your client is Gozzel, a teen-oriented website.  Their goal is to provide a platform for teens to share their views on teen-related topics such as movies, celebrities and dating.

Specifically, Gozzel will generate its content as follows.  Members can express interest in writing for Gozzel on certain subject matters.  Gozzel’s editors will develop specific writing topics they think would benefit the site and then assign “reporting duties” to the members who expressed interest in that subject matter.  Gozzel provides financial or promotional incentives to the member to complete the assignment.  For example, if Gozzel wants an article on a rock concert, Gozzel would provide the assigned members tickets to the concert.

Gozzel provides members with specific parameters for submitted articles, such as word length and accuracy requirements, although members can submit any file type they want (including text, graphics and audio).  Gozzel encourages members to create their own original articles, but it knows that teens often ignore this advice.

Because many teens are not strong writers, Gozzel editors will thoroughly review and revise each article for substance, grammar and spelling.  After review and revision, Gozzel will publish the article to the site in an area of the site chosen by the editors (which may be a different area than initially indicated to the member).

Gozzel’s CEO has scheduled a conference call with you to help her understand the legal implications of their content generation approach.  What are the key issues you want to convey in the conference call?  Are there reasonably simple steps you would recommend to Gozzel to minimize potential exposure for the articles (without changing its entire business)?

Chuck’s Tips:

  • Do not discuss COPPA or other privacy issues.
  • Do not discuss contract formation or enforcement issues regarding any user agreement between Gozzel and its members.
  • Do not discuss sweepstakes or contest laws.
  • Do not discuss issues associated with sending minors to live events like rock concerts.

Question #2 (50 minutes/50% of your score)—to be graded by Eric

[REMINDER—ANSWER THIS QUESTION IN A SEPARATE BLUE BOOK]

Many websites link to merchants in exchange for payment for each user click on the link.  Often promoting websites (the “Publishers”) have no idea how much money referred users generate for the merchants and thus may charge less for these links than they can.  Understandably, merchants do not voluntarily share complete information with Publishers about how much merchants make from these programs.

Your client is Fliar, who has developed a plan to obtain this information for Publishers without merchant consent or knowledge.  Here’s how Fliar works:

Instead of linking directly to a merchant, the Publisher links users to a Fliar-operated server which then processes all data exchanges between users and merchants in a manner that is hard to detect by either the merchants or the users.  When a user navigates around the merchant site, the user is really navigating through pages that have passed through Fliar’s servers.  Fliar’s servers submit user requests to merchant servers the same way that the user’s browser software would.  When the merchant servers respond, all merchant pages are routed through Fliar’s servers on their way to being sent to users.  Merchant pages are displayed under a Fliar-controlled domain name (not the merchant domain name), which keeps the user/merchant exchanges within Fliar’s control.  Thus, when the user consummates a purchase with the merchant, because this information passes through Fliar’s servers, Fliar can capture the purchase amount and report it to the Publishers.  Although Fliar has the ability to see other personal information passing through its servers (such as credit card number, mailing address and email address), it claims it will not capture and retain such information.

Note that many merchants use “SSL,” a technology that prevents third parties from intercepting sensitive information (such as credit card numbers) as it is exchanged between merchants and users.  As a result, many merchants state in their privacy policies that no third party can access a user’s personal information submitted to the merchant.  Fliar bypasses the direct user/merchant SSL connection by forming its own separate SSL connections between it and the merchant and it and the user.  Thus, Fliar wants to claim that all user/merchant communications remain in SSL even though Fliar has interposed itself in the process.

Is Fliar’s business sustainable?  Identify the potential plaintiffs who might object to Fliar and the strongest reasons they would object.  Are there steps that can be taken to mitigate these objections?

Eric’s tips:

  • You might find diagramming the information flows helpful.
  • Deal only with US law.
  • Do not discuss any issues relating to contributory or vicarious copyright infringement. Caching is not an issue.
  • Do not address any trademark/domain name/UDRP/ACPA issues.
  • Some of you will just rotely list objections to linking.  Resist that temptation!  Assume that the merchant could not legitimately object to a Publisher’s direct link; thus, only address the issues that arise from this specific way of linking.