Cover image for CyberRegs : a business guide to Web property, privacy, and patents
CyberRegs : a business guide to Web property, privacy, and patents
Zoellick, Bill.
Personal Author:
Publication Information:
Boston : Addison-Wesley, [2002]

Physical Description:
xxi, 307 pages ; 24 cm.

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KF889.3 .Z6114 2002 Adult Non-Fiction Non-Fiction Area

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New government regulation, legislation, and technology trends are dramatically changing the Web, making yesterday's assumptions obsolete -- often, disastrously so. In this thought-provoking book, leading Web consultant Bill Zoellick offers an up-to-minute executive briefing on the enormous paradigm shift that's under way -- giving businesspeople the critical information they need to understand its impact, and influence the debate. Yesterday's popular notion -- that the Web's freedom-loving nature will sweep away existing rules, business arrangements, and governments -- has proven to be a hopelessly poor foundation for planning, strategy, and investment. Will yesterday's wide-eyed anarchy be replaced by tomorrow's cynicism and control? Can a middle ground be found that will protect the Web's vitality and your business interests? This book focuses on four key areas of public policy and Web technology: patent, copyright, privacy policy, and electronic signatures. For each topic, Zoellick presents a brief history of the issues, litigation, and legislation, and applies the state-of-the-law to a current Web business. The result: a "big picture" view that helps businesspeople recognize the issues, understand their short-term and long-term interests -- and impact the outcome.

Author Notes

Bill Zoellick is currently a partner in and founder of Fastwater LLP, a consultancy focusing on helping companies build effective web businesses. He frequently writes about the issues addressed in Web Engagement and speaks on them at user conferences such as Seybold and Internet World and at various user associations and seminars. He has been a software developer, business owner, executive in a $100 million software company, and, most recently, a management consultant and business analyst.




There is no "innate nature" of the Web. This was one of the key insights that Lawrence Lessig expressed in his important book, Code. 1 The coast of Maine has an innate nature. The Great Plains have an innate nature, as do the slickrock canyons of Utah. In each of these places, someone starting a business must contend with truly immutable dimensions of climate and geography. The fundamental character of such a place does not change except in geologic time; it exists apart from the people who live and work there. The Web is not like that. It is made up of computer code, which is made by people. If people don't like the effects of the computer code, they can change it, quickly. The typical way to change a complex application that is in daily use, like the World Wide Web, is to add layers. The layers can consist of new computer code that changes the way people and companies access and use the Web. The layers can also consist of legal code, often coupled with encryption and other technical constraints, that has the same effect. The fact that the face of the Web can be changed relatively quickly, over a matter of a year or two, means that talking about the "nature of the Web" is risky, if not out and out misguided. This has not stopped people from writing thousands of books and articles that do just that. The formula for such "Web nature" books is simple and, by now, familiar. They start by asserting that the Web changes everything and that old strategies cannot work in the new Internet era. Then, building on some set of assumptions about the supposed nature of the Web, the books reason forward to projections about what to do and what will succeed in the new Internet era of business. Starting a business built on assumptions about the nature of the Web is even riskier than writing books about it. For example, it was supposed to be in the nature of the Web to do away with the middleman ("disintermediation"), creating a new world in which digital content moved freely and without control. But the Digital Millennium Copyright Act and the rest of copyright law has intervened to change all of that. People involved in creating technologies to enable free exchange of DVD movies are now involved in lawsuits that could ultimately lead to jail terms. Napster, the free music-exchange Web site, is, as I write this, facing possible shutdown by the major music labels. Here is another example: it was supposed to be in the nature of the Web to enable new, personalized, one-to-one shopping, thus creating enormous new retail opportunities. Many things have gone wrong with this idea over the past three years, transforming it from an article of faith to something that is now viewed with deep suspicion. One critical thing that got in the way is that consumers became uneasy about the collection and use of personal information on the Web. This consumer malaise has a good chance of transforming itself into federal privacy legislation. The new legislation, if enacted, will create a new Web nature. The nature of the Web was also supposed to usher in a new era of business innovation. But it turns out that evolving patent law makes it possible for companies to own monopoly rights to such innovation for a period of 20 years. Sperry and Hutchinson, the S&H Green Stamps company that pioneered buyer incentive programs for retail stores, now licenses patented technology owned by Netcentives in order to offer incentive promotions on the Web. Once again, the intersection of law and the Web has transformed Web nature into something very different than people first expected. The Web Grows Up Not long ago people believed that the Web, by the force of its innate nature, would radically change business, opening enormous new opportunities. It was a great time to be in the stock market. It was a great time to be starting companies. There was the expectation of new beginnings. Many things came together to Excerpted from CyberRegs: A Business Guide to Web Property, Privacy, and Patents by Bill Zoellick All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Table of Contents

Acknowledgmentsp. xv
Introductionp. xvii
Part 1 Copyrightp. 1
Chapter 1 Creating and Resisting Changep. 3
Brief Backgroundp. 4
Copyright and Policyp. 4
Setting the Stage for Napsterp. 8
Infringement by Users?p. 10
Contributory Infringement?p. 11
Taking Care of Business in the Courtsp. 13
Controlling the Marketp. 14
An Alternative and a Threat to Controlp. 15
Does Anyone Have the Time?p. 16
Business Takes Care of Businessp. 17
Postscriptp. 18
Lessons from Napsterp. 21
Notesp. 23
Chapter 2 Congress Asserts Controlp. 27
The Digital Millennium Copyright Actp. 28
The DMCA in Actionp. 30
Scope: The Question of Commercially Significant Purposep. 30
Restriction of Accessp. 31
Consequences and Causesp. 32
Making Problems Simplep. 33
Engagement and Time to Learnp. 34
Keeping Up with Developmentsp. 36
Notesp. 36
Chapter 3 Control Put into Practicep. 39
Electronic Distribution as Threat and Opportunityp. 39
Four Strategiesp. 41
Technical Protection Servicesp. 41
Contracts and Licensing Agreementsp. 42
Licenses as a Way to Constrain a User's Rightsp. 43
Digital Distribution and New Laws Make Use of Licensing Easierp. 45
Changing the Publishing and Distribution Modelp. 45
From Specific to Generalp. 46
Changing the Business Modelp. 47
Convergence: Complete Controlp. 48
Technical Restrictionp. 48
Licensing: The Second Side of the Trianglep. 49
Closing the Triangle: The DMCAp. 49
A Complex Message for a Complex Problemp. 50
Notesp. 51
Chapter 4 Copyright Policy and Progressp. 53
The Perspective from Marsp. 53
Licensingp. 54
Implications for Businessp. 56
Value Moves Downstreamp. 56
Business Focuses on Licenses, Not Sale of Copiesp. 57
Value Increases through Aggregationp. 57
Practice and Policyp. 58
Starting on the Wrong Footp. 59
Moving Forwardp. 59
Chapter 5 Copyright: Further Readingp. 61
Part 2 Patentsp. 65
Chapter 6 Subdividing the Internet Frontierp. 67
The Power of Patentsp. 68
Why Have Patents at All?p. 68
Basic Rulesp. 69
Amazon's 1-Click Patentp. 70
What's So Obvious?p. 71
Where's Alice?p. 73
Postscriptp. 75
What to Make of All Thisp. 77
Notesp. 78
Chapter 7 Patent Sprawlp. 81
Some Recent Internet Patentsp. 81
Concerns Raised by These Patentsp. 85
High-Level Approach Rather Than Detailed Technologyp. 85
Application of Traditional, Offline Approaches to the Internetp. 86
The "Obviousness" Problemp. 86
Impediment to Innovationp. 88
Not Necessary for Growthp. 89
Intellectual Property Time Bombs for Internet Businessesp. 89
Burdensome Expenses of Litigationp. 90
Making Sense of the Disputep. 90
Notesp. 92
Chapter 8 What Is Patentable?p. 93
Softwarep. 94
Adding a Computer to a Known Processp. 95
Software Patents at the Start of the Internet Boomp. 98
Notesp. 99
Chapter 9 Claiming More: Business Method Patentsp. 101
An Initial Setbackp. 102
Expanding the Scope of Patentsp. 103
The Impact of State Streetp. 104
Subject Matter and Breadthp. 105
State Street in a Nutshellp. 106
Notesp. 107
Chapter 10 Predicting the Impact of Internet Patentsp. 109
A Market without Patent Protectionp. 110
What If?p. 111
The Argument against Patentingp. 112
The Argument for Patentingp. 113
A Market with Patent Protectionp. 114
A Potential Deal with Microsoftp. 115
The Deal Goes Sourp. 116
The Patent Worksp. 116
Financial Outcome, Thanks to the Patentp. 117
Pros and Cons: Patent Policyp. 118
Notesp. 119
Chapter 11 The Business of Inventingp. 121
A Business Method Laboratoryp. 125
Inventing from Value and Extending Valuep. 127
Walker Digital's Big Ideap. 130
Learning from Walker Digital's Practicesp. 131
Notesp. 132
Chapter 12 Congress and Patentsp. 135
Scope of the American Inventors Protection Actp. 136
Congress Meets State Streetp. 137
A Limited, Adapted Responsep. 139
Looking Forwardp. 141
Notesp. 144
Chapter 13 Maximizing Benefit, Minimizing Costp. 145
Who's Behind the Change?p. 145
The Courtsp. 146
The Patent Officep. 147
Businesses Seeking Patentsp. 148
An Invisible Hand?p. 148
Where We Are Headedp. 150
What to Do?p. 150
Getting a Patent Policy that Worksp. 151
Notesp. 153
Chapter 14 Patents: Further Readingp. 155
Part 3 Electronic Signaturesp. 159
Chapter 15 Matching the Legislation to the Problemp. 161
What the Legislation Doesp. 161
What the Legislation Does Not Dop. 163
What Is the Problem to Be Solved?p. 164
Unresolved Issuesp. 165
Summary of the E-SIGN Act Approachp. 169
Notesp. 170
A Deeper Look: Technical Background on Digital Signaturesp. 173
Notesp. 177
Chapter 16 The Impact of the Legislationp. 179
Analysis and Suggestionsp. 180
Chapter 17 Learning from the Electronic Signatures Actp. 183
Recognizing How Little We Understandp. 184
Restricting Government Action to What Is Necessaryp. 184
Accepting the Fact That Markets Need Time to Workp. 185
The E-SIGN Act as Modelp. 186
Chapter 18 Electronic Signatures: Further Readingp. 187
Part 4 Privacyp. 189
Chapter 19 A Market for Privacyp. 191
Putting a Price on Private Informationp. 191
The Value of Aggregationp. 193
Developing a Framework for Privacy Policyp. 194
Notesp. 195
Chapter 20 The Right to Privacyp. 197
The Right to Be Let Alonep. 197
The Basis for Privacy Rightsp. 199
The Nature of the Privacy Rightp. 203
Conflict with Other Laws Adds to the Confusionp. 204
Recent Developments: Telemarketingp. 205
Summarizing the Nature of the Privacy Rightp. 206
The Law and Privacyp. 207
Notesp. 210
Chapter 21 Consumer Concernsp. 213
The DoubleClick Storyp. 213
Consumers and Web Privacyp. 217
Let's Make a Dealp. 218
Cede Some Controlp. 220
Make It Easyp. 221
Expandp. 223
Broader Privacy Concernsp. 223
The Tone of the Concernsp. 224
Concern about Technologyp. 224
Creating Fertile Soil for Web Businessp. 226
Notesp. 227
A Deeper Look: Technical Background on Cookies and Web Bugsp. 231
Cookiesp. 232
Web Bugsp. 234
More Informationp. 235
Notep. 235
A Deeper Look: Technical Background on the Platform for Privacy Preferences Projectp. 237
What Is in a P3P Privacy Policy Statement?p. 239
User Agents and Servicesp. 241
What Bothers Privacy Activistsp. 243
Encoding the Industry View of Privacyp. 243
Making Data Collection Easierp. 244
Distracting from Creation of Meaningful Privacy Regulationsp. 244
P3P in the Business Contextp. 245
Is P3P a Good Thing?p. 245
Notesp. 246
Chapter 22 The Privacy Debate in Congressp. 249
Coveragep. 251
Consentp. 252
Accessp. 254
State Lawsp. 255
Enforcementp. 256
Safe Harborp. 257
Notice of Changep. 258
Assembling the Piecesp. 258
Notesp. 261
Chapter 23 A Privacy Frameworkp. 263
Privacy as a Rightp. 264
Monetizing Privacyp. 265
The Fallacy of the Powerless Customerp. 269
My Viewp. 269
Notesp. 271
Chapter 24 Privacy: Further Readingp. 273
Printed Resourcesp. 273
Web Sitesp. 275
Epiloguep. 277
Indexp. 287