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August Legal Column

INTELLECTUAL PROPERTY PROTECTION - QUESTIONS AND ANSWERS

By Joel I. Rosenblatt, Attorney at Law Mr. Rosenblatt, a Registered Patent Attorney with the U.S. Patent and Trademark Office, practices in the commercial law of technology and the Internet and the law of patents, trademarks, and copyrights. He is a Florida Supreme Court Certified Mediator, a Florida Bar Approved Mediator for Computer Law Disputes, certified as a Mediator and Arbitrator for the U.S. District Court for the Middle District of Florida and is admitted to all U.S. District Courts for Florida. Any questions or comments may be directed to Mr. Rosenblatt at (321) 727-7626; FAX: 727-8209 or by email to jirosenblatt@mindspring.com

So! - What’s New ?

It’s not often. I have a chance to write a lead in with two kinds of sentencing ending punctuation marks, which are not periods or semicolons and where I can throw in italics for emphasis. But that is what a Palm Bay writer gets for asking about a classic “sleeper” legislative enactment, intended to make our “Internet life” easier and which, to date, has not received its due in the form of recognition or notoriety. Our writer says she has heard about a new law allowing people to fix their signatures to electronic documents for transmission over the Internet and would like to start sending signed documents by email, avoiding the expense and time in sending the paper article (not to mention saving the forests). She has a special interest as the purchasing manager for a growing technology company anxious to close the gap in “on time delivery” and anxious to show her technical co-employees she is operating on the very edge of the law and technology. INTRODUCING - THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT The Electronic Signature Act (ESA), signed into law on June 30, 2000, is intended as a business efficiency measure, allowing business to take advantage of the speed and efficiency of the Internet while also protecting consumers. Electronic signature is seen as critical to the development of electronic commerce, important to business or consumer transactions are over long distances, making the Internet an ideal medium for the “signature on the dotted line. While Congress believed this act to be unprecedented, any lawyer asked will be able to recite case book examples where the now “old” technology such as first class mail, facsimile and in the real old days, the telegraph, produced other problems, not related to the presence of a signature, and which should not be expected to be solved by ESA. Of particular significance is in enacting the ESA, Congress has attempted to create a uniform system where contracts have the same validity across all 50 states, when executed according to the ESA, while leaving to those who choose to use electronic signatures, the choice of the particular format or software it uses. However, before entering this brave new world, Congress chose not to overlook certain protections in personal and consumer transactions, by requiring critical notices such as insurance cancellation and mortgage foreclosure notices be sent on paper, allowing consumers the right to receive any documents on paper if they so choose, and denying the use of electronic signatures on personal documents such as wills. The ESA applies to all transactions affecting interstate or foreign commerce, but given the current interpretation of “interstate commerce,” it is likely only the most local of transactions, for example local real estate sales, would not be included. The electronic signature starts with two parties agreeing with one another, electronically or otherwise, on the contract terms and conditions (a process leading to many a prospective legal fee) and the electronic signatures and electronic records they will use in their transaction. However, a thought comes to mind here of the case where the parties agreed to sign the contract in separate original copies (4 to be exact) and each original had different wording for what turned out to be the same disputed clause. There is no guarantee something similar might not happen given separate copies of a contract being passed over the Internet or signed by the two or more parties. While efficiency in business transactions is a desirable goal, the ESA will not allow it at the expense of the purposely deliberative pace of a consumer transaction, intended to give the consumer information and time to reflect on the transaction, before making a binding commitment. For example, the ESA requires a consumer contract be made available to a consumer in writing, with the substitution of the electronic record only if the consumer affirmatively consents to receive an electronic record after receiving a clear and conspicuous statement of the consumer’s rights or options. Exceptions are those agreements required to be provided to the consumer in paper, by law. Where the electronic signature is made legally valid, the electronic record of the document authenticated by the electronic signature is made equally as valid. However, as an ESA requirement, the electronic document must be in a form that may be filed and accessed and copied, as with any other paper contract. Getting to the details of just what is an electronic signature, the ESA says it can be any technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities, operable by an electronic agent meaning a computer program or an electronic or other automated means used independently to start, or respond to, or complete a transaction, or to record an electronic document, without intervention by a human operator. This sounds like an invitation to rush to the Patent Office with applications related to the completion of electronic transactions or arrangements for their security. Indispensable to the electronic signature is the electronic record it validates. The record of course is information on a tangible medium (paper for example) or if an electronic record, it must be “stored in an electronic or other medium and must be “retrievable in perceivable form.” That could mean a word processing text file, stored on magnetic medium or a graphic file of any kind as long as it provides information in a transaction-related record. For those who might remain perplexed, examples of electronic signatures are all around us. At the U.S. Patent and Trademark Office, the signature requirement on an electronically filed trademark application is fulfilled by the applicant or applicant’s attorney typing in a self-chosen word used to represent the signature. In the case of an electronically filed patent application, the signature requirement is met by adding the “profile” of the person filing the application. The profile uses PKI encryption, which uses a public key and a private key. The two keys are used to decrypt the transmitted patent application and to authenticate the signature of the person signing the transmittal. The reason for the different treatment is that patent applications are confidential while trademark applications are not. While the PKI system can be used for authentication of any signature, the ESA permits any electronic means “attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” So, what does all this mean with regard to the Internet. First, those doing business through the Internet, whether as sellers or web site hosts/developers, a secure means for electronic signature affixation and authentication, may become a customer requirement and no web site dare “leave home without it,” (stealing a line from American Express). Second, as the electronic record is important in the electronic signature scheme, the backup storage infrastructure may need updating to assure its reliability. And, third, to make sure the right authentication methodology went with the right signature, it would be better to use the same electronic signature scheme, changing it a little or as infrequently as possible. At this time there is no 50 state formal agreement in the form of a Uniform Electronic Transaction Act (UETA), so confusion exists about consumer consent due to the number and complexity of the ESA’s preemptions. This is important because the jurisdiction where an action may be brought over an electronic transaction may depend on the location where the electronic contract was signed. As a general rule, in a case where parties in separate state jurisdictions negotiate by phone or the Internet, using email for example, and the final document intended as final expression of the parties’ intent is sent by the seller by email, signed electronically by the buyer and returned to the seller in the other state by email, unless the contract says otherwise, any lawsuit involving seller as defendant will have to be brought in the seller’s jurisdiction. Next month I’ll write about Free Speech and the Copyright Law.

Biography

Joel I. Rosenblatt is state Supreme Court certified and available for mediation and arbitration. He practices as a registered patent attorney in patents, trademarks and copyrights. Specific areas of practice include commercial law related to electronics, computers, data processing, telecommunications, materials and mechanical engineering, the Internet and entertainment and in the development and licensing of technology and creative works. As Intellectual Property and Licensing Counsel for Fortune 200 corporations, he has acquired numerous patents for electronics and computer related inventions, and has prepared and negotiated design, development and distribution agreements for software, telecommunications, electronic technology, and creative works. As a logistics attorney, he has provided counsel and representation in the field of customs, logistics services, and in loss and damage claims. Mr. Rosenblatt is available for mediation and arbitration in the fields of general law, intellectual property, entertainment, and technology law, and in logistics law and loss and damage claims. Emphasizing technology and the arts, he serves a wide range of intellectual property and commercial needs for individual and business clients. Mr. Rosenblatt, as a senior level attorney can provide clients easy access and quick turnaround. Education and Professional Affiliations: Mr. Rosenblatt holds a Bachelor of Electrical Engineering Degree from the New York Polytechnic University, an MBA from the Wharton School of the University of Pennsylvania, and a JD from the Catholic University of America Law School. Mr. Rosenblatt is a Registered Patent Attorney with the U.S. Patent and Trademark Office and a member of the Florida and New York State Bars. Admitted to practice in the Court of Appeals for the Federal Circuit, the United States Court of Appeals for the 11th Circuit, the United States Court of International Trade and the United States District Courts for the Northern, Southern, and Middle Districts of Florida. Florida Supreme Court Certified for Circuit Court Mediation and approved by the Florida Bar as a Mediator of Computer Law Disputes. Mr. Rosenblatt has completed Florida Supreme Court Certified Arbitration Training and is certified as a Mediator and Arbitrator in the United States District Court for the Middle District of Florida. jirosenblatt@mindspring.com .

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