Ireland: An Overview Of The Legal Implications Of Internet Trading

Last Updated: 25 November 1998

BACKGROUND

The law relating to electronic commerce is challenging in its scope in that it is essentially the law relating to "traditional" commerce. The substance of the commercial relationships remains the same.

In a seminar of this nature it is not really appropriate to analyse the full gamut of legal rules of "traditional" commerce: entire books have been written on the subject. However, we will need to set out the legal principles behind the formation of contractual relations. We can then have a more relevant look at how these principles relate to electronic commerce.

As with "traditional" commerce the general legal rules of commerce are in turn supplemented by both the custom and practice of and the specific rules for each particular industry sector.

Electronic Commerce procedures and systems already operate in a wide variety of industry sectors.

Retailing is a sector where a combination of the barcode at checkouts and electronic stock ordering and payment systems will permit further stocks to be ordered, invoiced and paid for without human intervention. This business management system, known as a "just in time" system, eliminates delays and human error, reduces costs and offers opportunities for increased competitiveness and efficiencies. Initially this system has been used for invoicing and settlements.

Marine Transport and International Shipping is a sector where significant developments have occurred in terms of the identification of the goods to be shipped, the terms and logistics of their carriage, delivery and payment. One example is Bolero project undertaken in conjunction with the European Commission involving the development of an electronic bill of lading for use in International Shipping. For those of you who are not aware, a bill of lading is what a carrier issues to a shipper. It is passed by the shipper to the buyer of the goods (in the same way as you would negotiate or endorse a cheque) and is used to determine what goods are being shipped and their condition, to give exclusive sale or disposal rights to the holder and to entitle the "final" holder exclusively to take delivery.

Banking and Financial Services is a sector which already extensively uses electronic funds transfer systems for transferring funds from bank to bank around the world using the SWIFT and CHAPS systems. It is interesting to note that since 1992 the Irish Revenue authorities have had rules and procedures in place regarding electronic data exchange and storage to deal with VAT in respect of paperless invoices.

The London Insurance Market and the London Stock Exchange using LIMNET and CREST respectively facilitate business to be conducted on a paperless basis.

ELECTRONIC COMMERCE

As we know, the term "electronic commerce" is a term of art, a description of activity. This activity can occur in "open systems" such as on the Internet through e-mail and world wide web and in more "closed" systems such s those offered by EDI service providers such as Eirtrade for bilateral EDI trading. We propose, in this paper, to specially examine EDI but many of the principles discussed are relevant to both open and closed systems.

EDI

As some of you will be aware, EDI is a mode of communication. Simply put, Company A transfers electronic data from its computer to the computer of Company B without the necessity of keying-in or other manual procedures.

The European Commission has issued a Recommendation on EDI trading as it is viewed as a desirable development in international trade. In a departure from normal practice, this recommendation has annexed to it a model EDI Interchange Agreement. This recommendation followed the TEDIS programme which involved a survey on legal aspects of EDI trading in each of the EU Member States. Our firm, A & L Goodbody, advised on the Irish legal aspects of this survey.

The EDI Association in the UK also has a model form interchange agreement (the third revision being in October, 1994) as do other significant economies in the world.

And so, in its simplest form, EDI trading amounts to a bilateral arrangement between, for example, a customer and a supplier giving rise to two separate legal relationships between them.

One legal relationship relates to the mode of passing electronic data between them and this relationship is called the inter-change relationship. This relationship is set out in paper in the form of a written inter-change relationship.

The other legal relationship, in our example, is the customer and supplier relationship which would exist regardless of the mode of communication of trading data. It is to this second legal relationship that issues of terms and conditions of trading, pricing, invoicing, delivery and payment relate. This relationship is the one entered into on a paperless basis.

More frequently however, EDI trading takes place across a network provided by a third party, often called a Value-Added Network ("VAN"). Both the supplier and the customer link into the network as users and in addition to the commercial trading and inter-change relationships between them, each of them separately enters into a VAN arrangement with the network provider.

Apart from reviewing the VAN arrangements and inter-change arrangements, the most significant area for legal review is the impact of EDI trading on the customer and supplier relationship and, in particular, the trading terms thereof.

Legal Issues with EDI

We could address at length network or VAN agreements, interchange agreements, the whole intellectual property aspects of EDI, the legislation relating to the sale of goods and the supply of services which form the basis of electronic commerce, competition law, the laws of libel and slander, the laws of evidence governing what is and is not admissible in the courtroom and the laws of branding and advertising all in the context of EDI.

These areas are mentioned in an attempt to put what we are going to talk about into context.

However, what we propose doing for practical reasons is to say a few words about the following.

(a) General Legal Principles of Contract Formation

(b) Enforcing EDI Contracts

(c) Interchange Agreements

(d) VAN Service Agreements

(e) Branding in open systems

GENERAL LEGAL PRINCIPLES OF CONTRACT FORMATION

There is no Irish law specifically dealing with the formation of contracts through EDI. The same position prevails in the UK.

Contract Formation and Terms

Under Irish law and under UK law, the rules relating to the formation of contracts or agreements are the common law rules of offer and acceptance.

Broadly, a contract can be said to exist where an offer is made by one party (the offeror) to another (the offeree) to contract on specified terms and where the offeree accepts the offer and gives something of value to the offeror in return therefor, generally a promise to pay the price specified. This something of value is called consideration.

The common law rules of offer and acceptance provide that the time at which a contract comes into existence is normally the time at which the offeree's acceptance of the offer (rather than a mere acknowledgement of the offer) is received by the offeror. One exception is where the mode of communication of acceptance is by post (assuming that postal acceptance is appropriate in light of the terms of the offer) in which case the time at which the contract comes into existence is when notice of the offeree's acceptance of the offer is posted by the offeree to the offeror.

The rules also provide that the place at which a contract is formed is usually the place at which notice of acceptance of the offer is received by the offeror or his agent.

There is no general requirement that the offer, acceptance or evidence of consideration should be in writing or take any particular form.

Once it is established whether or not a contract has come into existence, one must consider the terms of that contract. Broadly, the terms of a contract are those set out in the offer accepted by the offeree. The terms should be clear as to the parties to the contract, the subject matter of the contract and the consideration or price. However an offer will frequently provide that a further body of terms forms part of the contract. These would usually be the standard terms and conditions of one of the parties.

To be validly incorporated into the contract, these terms and conditions of sale must have been brought to the attention of the offeree and accepted by the offeree prior to or at the time of the contract coming into existence. This is why terms and conditions appearing on delivery dockets or invoices alone do not form part of a contract to buy or sell goods, as at the time of invoicing and delivery the contract has already been agreed whereas terms and conditions appearing on the reverse of order forms (preferably signed) would form part of the contract.

In relation to EDI trading it is hardly practicable to transmit the terms and conditions on each occasion to ensure that they are incorporated as contractual terms. In any event, to do so, it may prompt customers to transmit back their terms and conditions of purchase and very quickly the whole situation could become quite unwieldy.

In our opinion, a more appropriate manner of ensuring that the seller's terms and conditions of sale are actually the terms and conditions governing the contract formed on each occasion is to have provisions to this effect included in the Interchange Agreement. Unlike the position in the USA and elsewhere, this is not the approach taken in the European Model EDI Interchange Agreement or the UK EDI Association model terms and is perhaps unfortunate.

Formal Requirements

In legal transactions, written documents tend to perform one of two functions. In the case of one function it is the document itself which is important. Examples would include the title deeds to your house, a cheque, a National Lottery ticket or a guarantee. The other function that legal documents perform is to be a record of what the parties agreed. It is the distinction between these two functions which lies behind the fact that certain paperless contracts will not create legal difficulties whereas some will.

As a general legal proposition, no formal difficulties arise with having contracts for the sale of goods or supply of services formed across an EDI network.

The Sale of Goods and Supply of Services legislation, for example, expressly permits contracts for the sale of goods to be oral or implied from the conduct of the parties.

The law does require that certain contracts must be in writing and signed before the courts will enforce them. These include contracts or documents for the sale or transfer of any interest in land, guarantees, hire purchase contracts, bills of sale and certain documents relating to company matters. Two further examples may have particular relevance. The first relates to long term agreements and the second to contracts for the sale of goods.

First of all, section 2 of the Statute of Frauds (Ir.) 1695 requires that agreements to be performed over a period in excess of one year must be in writing (or its terms noted in writing) and be signed. This rule should not create difficulties in the context in which we are reviewing EDI save, possibly, in relation to long term agreements. However, it is likely that long term agreements would not be "agreed" through EDI but rather would be agreed in writing periodically.

Secondly, Section 4 of the Sale of Goods Act, 1893 provides that a contract for the sale of goods of the value of IR 10 or more must be in writing (or their terms noted in writing) and be signed. This Act provides an alternative to a signed written document. It is that the buyer must accept part of the goods referred to in the unwritten contract, or make part payment (which is accepted) for the goods, or give something in earnest (which is accepted) to bind the contract.

The disadvantage of these alternatives is they depend on some action on the part of the buyer in recognition of the unwritten contract. In the leading Irish text in the area, Clarke notes that the alternative involving something being given in earnest could be satisfied by the buyer giving something in good faith. Should this issue arise before an Irish court in the context of EDI, it might be open to the court to enforce the unwritten EDI trading contract on the basis that it was able, from the nature of an EDI network and the nature of transmission procedure, to identify something being given in earnest by the buyer (such as an EDI confirmation) to satisfy the purposes of the section.

In terms of how far we could guess the Courts would interpret concepts such as "signature" and "writing" it is worth noting that "signature" has been interpreted widely to include a rubber stamp and typed words. "Writing" has not been reviewed by the courts in the same detail. It is however, defined in the Interpretation Act as including printing, type-writing and other modes of reproducing words in visible form.

In any event, while there may be some technical doubt over whether or not contracts for the sale of goods in excess of IR 10 formed across an EDI network are "in writing" or whether or not something has been given in earnest by the buyer to bind the contract, the provisions of a well drafted Interchange Agreement could go a long way towards removing those doubts.

The European Model, for example, provides that each of the parties expressly waives any rights to contest the validity of a contract effected by use of EDI pursuant to the Interchange Agreement merely on the grounds that it was effected by EDI.

Useful Reform

The only way of removing those lingering doubts is to amend the law for EDI transactions. There should not be much legislative objection to doing so, particularly as the VAT Regulations, as I already mentioned, take cognisance of paperless reading.

ENFORCING EDI CONTRACTS

A key issue in enforcing an EDI contract is what weight will be given to computer generated records in a court room. Our system of law (like that in the UK) is what is known as the adversarial system. This essentially means that the judge does not undertake any independent investigation into the subject matter of the dispute but rather acts as arbiter between the protagonists as they each attempt to put forward their account view of the issue while at the same time discrediting the other side. All of this is conducted in accordance with the rules of court and a body of law known as the law of evidence.

In a dispute over an EDI contract the defence will usually argue that records stored on computer can be easily changed and that they cannot possibly constitute reliable evidence. The rules relating to the admissibility of computer generated evidence are complex, particularly when the defence rejects the evidence. Whatever about the admission of transmission details and records, the admission of a print out of the purchase and sale details can give rise to difficulties as it is governed by the rules relating to the admission of documentary evidence. These rules invariably require the availability of someone to prove the document in court. This could be difficult where the document has been generated and transmitted without human intervention.

In the context of international trade, the position can be different in each jurisdiction. Even where it is admissible, the position varies as to what weight is given to it.

This is another area for useful reform.

In general terms it goes without saying that the more safeguards that exist to protect the integrity of computer records the easier the task becomes.

Those safeguards could usefully include the appointment of an independent non-partisan record keeper situated between the point of message creation and its point of receipt. The use of WORM (write once read many) discs for the receipt and storage of EDI messages might also help considerable.

It is worth mentioning that the Interchange Agreement can be of assistance in this respect. For example, the European Model Interchange Agreement contains, in Article 4, a specific provision to the effect that to the extent permitted ny national laws, the parties agree that in the event of a dispute, the records of EDI messages which they have each maintained (as required by the Agreement) shall be admissible as evidence before the Courts and shall constitute evidence of the facts contained therein unless evidence to the contrary is adduced.

INTERCHANGE AGREEMENTS

We have already mentioned the purpose of the Interchange Agreement. The UK/European approach is to limit the Interchange Agreement to the mode of exchange of electronic data and not to focus on regulating the underlying commercial arrangements. As already mentioned, the position in the US is different.

There are now two forms of model interchange agreement available as has already been discussed: the European Model Agreement and the EDI-UK Association Model Agreement. These are only sample agreements. There terms are entirely optional and it is important to remember that they will not apply automatically, even where two EDI users neglect to formalise an Interchange Agreement between them.

General Issues

Broadly, the concerns of any users of an EDI trading arrangement will be to ensure that the messages transmitted are genuine, that there has been no subsequent modification after transmission, that the contents of the messages have not been disclosed to third parties, that the messages are not accidentally repeated, that they are not lost within the system, that there is no unanticipated delay in the recipient receiving an uncorrupted message and that any legal relationship which the messages themselves purport to establish is enforceable. Many of these issues may also be addressed in the VAN Agreement.

However, each party would enter a separate VAN Agreement with the network provider and thus it is not the appropriate forum for dealing with inter- user issues. It is for this reason that EDI users will invariably reduce the regulation of the interchange relationship to a written document.

General Terms

While a detailed look at interchange agreements could be the subject of a seminar in its own right, some matters are worth mentioning.

Procedures

The Interchange Agreement offers the opportunity to formally set out identification controls and methods of verifying and authenticating messages. It also provides a framework for dealing with other operational issues such as at what stage in the transmission procedure the message is deemed to be received by the recipient or issues such as messages transmitted outside of office hours and the like.

Obviously, these are mere examples. By and large, these issues are fleshed out in a user manual or technical annex which is incorporated in one form or another into the Interchange Agreement.

The European Model Agreement provides that in the event of disputes, no party is entitled to raise a question of the validity of an EDI contract merely because it was effected through EDI. Equally, that Model Agreement provides that the parties each agree that computer generated records will be admissible in court.

Customer and Supplier Relationship

An Interchange Agreement affords the opportunity to address the contractual trading arrangements that may be established pursuant to the messages transmitted. Neither of the Model Agreements go this far but it is always open to the parties to use the Interchange Agreement to that end.

Risk

The Interchange Agreement affords the opportunity for the parties to expressly agree which of them carries risk for error in the transmission of data, a corruption of the data on its passage through the network or the risk of the network "crashing" after transmission. The Model Agreements put the risk on the party transmitting the data and sets out a procedure for dealing with corrupted messages.

Furthermore, the European Model Agreement provides that each party will be liable for the acts and failures of any intermediary (such as a VAN service provider) engaged by that party except that where an intermediary is imposed, the dominating partner should be responsible.

Confidentiality and Security

An Interchange Agreement will usually address issues such as confidentiality and the security of messages transmitted. Depending on the nature of the messages being transmitted a higher degree of confidentiality may be appropriate and, in some cases, methods such as encryption are often utilised.

Data Log

An Interchange Agreement will usually oblige each user to maintain a data log to record the transmission and receipt of all messages. The Interchange Agreement should also oblige the parties to record both messages received in error and corrupted messages.

User Manual/Technical Annex

As mentioned above, a user manual (or technical annex as it is called in the European Model Agreement) is invariably referred to in the Interchange Agreement. It will make particular reference to the standards used. Both the UK and the European Model Agreements prescribe EDIFACT. This user manual is distinct from any user manual that may accompany the VAN software. Its purpose is to flesh out in considerable detail the operation of the interchange arrangement. While, strictly speaking, the interchange arrangement is limited to the relationship between the two users, the network provider would in many situations have a role to play in relation to the user manual as the user manual will inevitably reflect the EDI network operated.

VAN SERVICE AGREEMENTS

Unlike the Interchange Agreement, the form of VAN Agreement tends to vary in terms of substance and form.

Service

The essence of the VAN Agreement is the provision of VAN services and there is normally a part of the agreement dealing specifically with this. Apart from obvious considerations such as service fees and costs, it is important to assess the nature of the service offered, its suitability to the transactions contemplated and its flexibility to respond to developments in EDI, prior to any legal review of the VAN Agreement itself.

In legal terms, consideration has to be given to the level of control that the network provider has over the VAN services offered from time to time. Some VAN Agreements may give the network provider considerable scope to modify or withdraw elements of the service with a view to enhancing the service as a whole. Clauses of this nature have to be looked at carefully as, in theory, a change in the VAN service may not suit a particular user. It is of critical importance to bear in mind that once one embarks on EDI trading (even in respect of settlements and invoicing) the need to keep manual or hard copy records will no longer exist. Accordingly, should the user become dissatisfied with the service provided by the network provider, it may be difficult to withdraw from the EDI arrangement, not so much legally as from a practical perspective.

Other issues which are important in relation to the service provided would include more detailed issues such as flexibility of access to and the availability of the network. Furthermore, it may be that different users with whom you wish to interact may have adopted slightly different standards in terms of formatting, access protocols and the like. It would be important for the network provider to translate the messages into an appropriate format. This becomes particularly necessary where trading partners operate on a different network in which case the inter-networking services offered by the network provider become significant.

Security and Confidentiality

Depending on the nature of the data transmitted across the VAN, a high level of confidentiality may or may not be required from the network provider.

However, all users should seek to ensure that some basic level of confidentiality is observed.

Furthermore, the user will require some assurance from the network provider as to the security of the network to avoid situations where unauthorised personnel may, across the network, access another user's system. Not surprisingly, the network provider invariably seeks to make each user responsible for the security of its own system. While such an obligation is often difficult to resist, there are a number of issues which a user should bear in mind and in relation to which the network provider can play a part. For example, the network provider will be responsible for the distribution of identification codes and will be in a far better position than an individual user to ensure that certain basic security with standards are in place consistently across the network. As you know, a lapse in security arrangements in one aspect of the network could potentially affect all users. In the UK some potential users like to have a security audit on the network undertaken prior to entering into a VAN Agreement.

Security is important for a number of reasons. In addition to matters of commercial sensitivity, one would need to be satisfied that all reasonable steps have been taken to prevent, for example, a virus passing from one user into the network and out into the system of another user.

Risk and Performance

In relation to all VAN services, and in particular in relation to intra-network translation and inter-network services, there is the question of the risk of things going wrong. As already mentioned in the context of Interchange Agreements, the risk as between two users of erroneous or corrupted data being transmitted or received normally lies with the transmitting party. However, the question of the liability of the network provider to the transmitting party for corrupted or erroneous data is something that should be addressed in the agreement. There is a view that the agreement might be better left silent on the matter on the basis that a legal liability lies where it falls. However, our view is that if the parties are regulating the VAN services arrangement in a written document this is an issue that should be addressed in clear and unambiguous terms.

It should be borne in mind that the network provider controls the route of the messages through the network and delivery of the messages to the mailbox of the recipient. While a network provider will usually resist any warranties as to the performance of the system or its suitability to any particular need, a user should always attempt to obtain some minimum guarantees from the network provider as to the key elements of the service it is providing. It should also seek to have the network provider contractually confirm that the intellectual property embodied in the network (or related services) does not infringe the rights of any third party.

Finally, on a general point concerning risk, the practice in the UK seems to be that no special insurance arrangements need to be put in place merely because EDI is used. However, we believe that many users take the precaution of notifying their insurance brokers of that fact.

Software

Most users will have hardware that can be dedicated to the EDI network. The software may, in theory, be generated internally, be licensed from the network supplier or may even be bespoken from a software house for the purpose.

Where the software is licensed from the network provider, the licence may be embodied in the VAN Agreement or, alternately, it may take the form of a separate document. In any event, depending on where other users obtain appropriate software, risk as to contamination of the system through viruses and the like raises again the question of security.

Finally, software licensors invariably resist giving any warranties as to the suitability of the licensed software package for a particular purpose. Where the network provider itself has furnished the software there should be some scope for extracting a performance or suitability warranty from the network provider.

BRANDING, ADVERTISING AND THE USE OF NAMES ON THE INTERNET

ADDRESSES

The main elements of the Internet are, electronic mail or e- mail, which is in essence another form of posting letters, the Worldwide Web which provides a place or Platform for anyone and everyone to advertise their wares and to provide information about themselves and Newsgroups which are the places where you can browse through pages and pages of information about whatever topic interests you most and put up messages on specific topics. What all of the people who come into any of these categories have in common is an address by which they can be identified, just the same as their home address identifies them.

Their Internet address is made up of a part selected by its owner, which is usually their own name or initials, followed by their Domain name, that is a name which uniquely identifies them or their organization, followed throughout Europe by a generic abbreviation which shows the country they are in, - IE for Ireland, FR for France and so on.

In the USA there are generic abbreviations which are used by all Internet users such as EDU for educational organisations, COM for business entities, NET for computers of Internet service providers and ORG for other organisations. Domain names must be registered with InterNIC, a branch of the Internet Society in the US. In Europe regional Registries have been set up to assist InterNIC which carry out the same function. Here in Ireland, the regional Registry for domain names is in UCD. Most people will simply contact a service provider such as Ireland On Line or Indigo to get onto the Internet.

The difficulty of course in relation to the registration of domain names on the Internet is that in the USA for example, there are apparently about 20,000 names being applied for each month. So although, if an identical name is already registered by someone else, or if the request is an obvious attempt to register a name to which the applicant isn't entitled, the application will be refused, the governing bodies do not conduct any search or investigations when considering applications to see whether others might have legal rights over those names.

By legal rights I mean Trade Mark Registrations or even just a straight forward reputation built up over many years so that it can be protected in Passing Off - that area which protects Branding. Use of names on the Internet is a new type of Branding. So, taking into account this new technology with which we are dealing; can such rights be of any use as far as the Internet is concerned?

WHAT IS A TRADE MARK?

In answering that question, the first point to consider is just what a Trade Mark is. In Ireland, the Trade Marks Act, was enacted in July 1996. Amendment to our Trade Mark law in Ireland was long overdue, but we now have an almost state-of- the art statute. The definition of a Trade Mark in the Act is "any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings". It may consist of words including personal names, designs, letters, numerals or the shape of goods or of their packaging. A registered Trade Mark is a property right when registered under the Act. Thus the Mark to have protection under this new Act can be used in connection with goods or services and must distinguish those goods or services from others. It is possible to protect names in respect of services and it is now possible to apply to the new Trade Marks Office in Alicante in Spain for registration of your Trade Mark throughout Europe.

Internet addresses are used by people in business, by undertakings, and they are used not just for identification purposes but also to distinguish the goods they are selling or services they offer from those of others. Often the name will be one and the same name as that used to describe their goods and services.

So there can be little doubt that Trade Mark legislation should be able to protect Internet domain names in just the same way as up to now it has protected names used in relation to products.

Addresses on the Internet will often be the owner's name. Difficulties have arisen however, because before large companies realized just how important the Internet was likely to be, third parties have registered the companies names on the Internet claiming them as their domain names. Many companies have discovered that their most valuable Trade Marks and service Marks have been reserved by third parties. The most famous of these have been in the USA and include Coke.Com, McDonalds.Com and Hertz.Com. Apparently in the US, fewer than 30% of the largest companies have claimed their names as Internet addresses, leaving over 70% of them exposed to Internet sharks taking over their names.

Although the concept of a domain name is of course reasonably new, the idea of third parties using famous names is anything but.

In Ireland, particularly where commercial growth really only began in the 1960s, there were many Irish businessmen who incorporated companies, such as C & A or Next or Hamleys Toy Shop and registered Trade Marks to go with them, before the multi-nationals had considered opening their branches in Ireland. It was a prudent move for many of these Irish businessmen some of whom succeeded in obtaining payment from multi-nationals to change their names. History is repeating itself on the Internet and companies should be careful not to be caught out.

Advertising

Turning now to the use of the Internet as a commercial tool, companies have realised the potential of the Internet for advertising information about their products and services.

The first thing of course is that if a third party has taken the name you would most naturally use as your domain name, any advertising you do on the Internet will be useless, as the public will not be able to find you.

But having overcome any difficulties about getting the address they want, all sorts of companies have pages on the Internet selling their wares, be they products or services and it provides a cheap and worldwide market, as all users on the Internet can access this advertising. This is unlike anything we have known before. An advertisement set up on a page on the Internet by someone in Blackrock, Co. Dublin is a piece of Global advertising which can be accessed by anyone, anywhere.

The Global aspect of this is something which we as lawyers have not encountered often before. Users placing advertisements on the Internet will have to be careful to ensure that they do not infringe third party Trade Marks registered outside their home countries and in turn they will have to ensure that they protect and enforce the Marks which they have registered.

Care must also be taken when your tactic is to use Comparative Advertising.

Although our new Trade Marks Act makes it possible for anyone to use a registered Trade Mark to identify goods or services as those of their proprietor when referring to competitors products, such use must be in accordance with honest practices in industrial and commercial matters and must not take unfair advantage of or be detrimental to the distinctive character or reputation of the Trade Mark.

Furthermore the advertising must not mislead. Throughout the European Union, the Misleading Advertising Regulations apply, so that a would-be advertiser in Ireland although satisfied that the advertisement does not mislead here may find that in another EU country it does and innocently may expose himself to action if he has not taken proper advice. Remember advertisements may be available to up to 50,000,000 users in 140 countries - a frightening thought - so extreme care should be taken.

Remedies

Having pointed out a few of the problems which can be encountered on the Internet, here are a few possible solutions as to what you can do then. What can you do if someone has registered your name as a domain name? What do you do if someone is using your Trade Mark, registered or not, on their page of the Internet? What do you do if you have devised what you consider is a unique page on the Internet and someone else sets up a page looking so like yours that confusion may arise. What do you do in light of the fact that all of this is happening not just in Ireland but worldwide?

Unfortunately the "Protection of Rights on the Internet Act" is yet to be written and so we are left with applying the time honoured rules which relate to Trade Marks, to copyright and to passing-off and to utilising the Misleading Advertising Regulations. Initially one would expect that all of these might be of little use. However, upon reflection, the principals of infringements whether in the three dimensional physical form of packaging or television or paper advertising or in cyber space are in fact identical.

Infringement of Trade Marks

Thus the use of a name or a Trade Mark by an unauthorised individual or organisation will arguably constitute an infringement of your registered Trade Mark. Provided you have a Trade Mark registered under the existing Act you will be entitled to look for an injunction stopping that illegal use. Indeed you will soon have the facility to obtain a District Court Order addressed to the Police to visit the third party infringers' premises and remove his software, his hardware and anything else which impinges your copyright to which he has applied your Trade Mark.

There is also a facility under the Trade Marks Act regarding what are called, under the Paris Convention, well known Trade Marks. These are Marks of a national or of a Convention country or of a person who is domiciled in or has a real or effective industrial or commercial establishment in a Convention country whether or not that person carries on business here. Those people will be entitled to look for an injunction in Ireland even if they have not got a registration here.

In addition, even if the infringer is not intending to use the Mark in the same course of trade and provided that you have a reputation in your Mark so that people will be deceived and confused into believing there is a connection between the two, you may seek to use the old fashioned common law remedy of passing-off which is arguably now sufficiently wide to protect you.

If what you complain of is misleading advertising you can complain to the Director of Consumer Affairs and if he does not act quickly enough for you, you personally can seek an injunction preventing the offensive advertising.

What about the worldwide aspect of this thing? Well, the Brussels Convention supported by the Lugano Convention on Jurisdiction provides that you can sue a person where he is domiciled, or where a branch is established, or in tort where the harmful event occurred, or where you are suing a number of Defendants, where any one of them resides. It also permits you to look for what are called protective measures in Convention countries which are any countries of the European Union and of EFTA. That at least covers one-third of the world. It means that you can look for an injunction in Ireland, be it for Trade Mark infringement, or for passing- off, and then have that injunction enforced in any of the countries where you are encountering particular difficulties.

In the same way the Misleading Advertising Regulations apply throughout Europe and they can be of assistance too.

As you know Court proceedings can be costly and extremely costly where you are involved in multi-jurisdictional litigation. There are often other ways of avoiding the problems and guarding against becoming involved in litigation.

Consideration could be given to putting your marketing people to work to composing an extra clever campaign to overcome the difficulties you are encountering by, for example, utilising a different domain address or using comparative advertising in a particular manner. Thus even without the infringement of rights on the Internet aspect there are a number of very useful remedies open to you. This sort of advertising should be done in conjunction with your lawyers. If the countries in which you operate are identified, concentration can be on ensuring the legality of advertising in those countries too and blocking out other countries. It would be possible to ensure that that advertising comes within the law of those countries and to publish a Disclaimer for other countries such as "This advertisement applies only to Ireland, France and the United Kingdom". This type of disclaimer will not necessarily be watertight but will hopefully assist to a certain extent.

LESSONS TO LEARN

There are just a couple of points to remember. The most important of these is to register your name both as a Trade Mark or Service Mark and on the Internet. It should become an automatic reaction for people involved in setting up companies and in choosing their brand name to apply for registration and ensure that they can use the name in the future to build their reputation and sell their products. If you have not done this the Courts may not allow you to seek the protection of Trade Mark law to catch up when you have been left behind because of your own inertia.

But remember even if you have not managed to do this all is not lost. The law even at present provides remedies which are cross border and which can prevent third parties, who have in essence stolen your name, from using it.

Doubtless for the future, consideration will be given to regulation of the Internet domain names, for example charging an annual maintenance fee or inserting an extra part in the domain name to further identify for example Shelbourne. Dublin. HOT. For the moment however, we can work within existing law.

The main thing is however to make sure that you register your name!

This article was intended to provide general guidelines. Specialist advice should be sought about specific facts.

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