Exam No. ___________


Internet Law

Professor Crouch
Fall 2010

This examination consists of two essay questions and a total of three pages.


Instructions: This is a 3 hour essay examination. It will be available for pickup in Room 203 at 1:00 pm on December 14, 2010 and must be returned by 4:00 pm on that same day.

The exam covers concepts derived from the assigned reading and in-class discussions. The best answers will rely upon those concepts to provide a full explanatory answer to each question presented.

Materials allowed. This is an open book, open note, and open computer examination. You may use class notes or outlines, commercial outlines, the Internet, or any other material. You may not rely on contemporaneous communications with any other person (either via local or remote communication). The honor code applies to this take-home examination. You must perform all work on your own and abide by the instructions on this page.

Avoid Plagiarism. Please take steps to avoid plagiarism or even the appearance of plagiarism.

Write your blind examination number in the space indicated above on this page. Do not put your name on anything in connection with this examination. At the end of the exam, you must return this paper.

Writing answers. The essay questions are divided into subsections. The best answers will follow the same exam structure. If you write your exam on computer, please take a moment to run the spell-check before printing.




Question 1.

Joseph recently started a new business that focuses on packaging and selling vitamins and herbal supplements. He named his company Joseph's Nutrition Center or JNC. JNC has no retail "bricks-and-mortar" stores, and instead sells to customers via its online storefront (www.JNC.com) and via Facebook and Twitter. Joseph lives in Missouri and ships his product from Missouri. Of course, he ships to customers nationwide using FedEx.

(a)  GNC is a well-established company that sells vitamins and herbal supplements. GNC has stores across the country and also operates online at www.GNC.com. In a recent news article, Joseph was quoted admitting that he "chose the JNC name as a way to help potential customers understand that JNC's product line is similar to GNC's product line."Discuss GNC's potential legal remedies against JNC.

(b)  As an extension of his business, Joseph started an affiliate program. In the program, Joseph allowed other venders to offer their goods through his website. Although Joseph does not review all of the products being sold, his company does receive a small percentage of each sale. Joseph recently learned of products on-sale by vendors on his website: (b)(1) one vendor has been selling a scanned e-book versions of the Harry Potter books without permission of the copyright holder as well as used copies of the books; (b)(2) another vendor has been selling marijuana (in pill form) through the JNC website; (b)(3) a third vendor has been posting ads on the JNC website that include negative comments against other JNC vendors. Please comment on JNC's potential legal liabilities and help provide a strategy for moving forward.

(c)   The Kansas Attorney General has contacted JNC demanding that the company collect sales tax for any products sent to the State of Kansas. Must JNC comply? Does it matter that two JNC affiliates are located in Kansas?

(d)  As part of the "culture" of the JNC website, both vendors and customers have begun communicating using the website. As private company, Joseph believes that JNC is fully within its rights to limit the type and content of those communications. However, he is considering developing a free-speech policy for the website that would involve JVC forfeiting its rights to limit the content of speech on its site -- in essence binding itself to the First Amendment of the US Constitution. Please advise.

(e)  JNC is expanding both its customer base and internal operations. Thinking internationally, are there reasons why JNC should refuse to ship products to certain countries? Are there reasons why JNC should move its computer servers abroad? (Please ignore tax issues for part (e)).

Question 2.

During the past year, WikiLeaks has released thousands of pages of US classified documents as well as corporate trade-secret documents. Going forward, the US and other governments are looking for technical mechanisms to limit the distribution of these types of files. One approach would allow the government to block particular files (or portions of the files) from passing through Internet servers. Another approach would push to reduce the level of anonymity available for internet users.

Should the governments be pursuing added layers of Internet control. Are there spillover effects (either negative or positive) from such activity?