sou · GQB3112 · 2003-01-01 00:00:00 — These differ- ences are of limited interest from a legal point of view as the in- struments, independently of how they are constructed, fulfil the same functions. However, this doesnt mean that the character of the mone- tary units and the kind of property they represent should be com- pletely ignored. Wordings and existing law have a considerable power over our thoughts. Therefore an analysis is possible without, on the one hand, metaphors such as handing over, possess and receive the digital coins kept in an electronic wallet, and, on the other hand, a comparison with rules and regulations regarding different kinds of property and instruments. 7 Payments and civil law issues The question when a payment with E-money is accomplished may be a suitable introduction to the legal issues that will arise. Most people are of the opinion that a payment with E-money is completed when the procedure to put the card into the terminal and push the button to accept – or make the same arrangements with network money – has led to the registration of the electronic monetary unit in the payees technical equipment. The idea is that the monetary unit is transferred from the payers technical aid to the payees. This action will probably also be apprehended as a legal act equivalent to the transfer of coins and banknotes. The question is how such an approach may be explained in legal terms. Normally payer and payee have not made any agreement be- forehand regarding how and on what conditions a payment with E-money should be made. E-money systems are meant to enable quick and simple payments, e.g. when goods are bought in a store. Consequently, it is important to be able to co-ordinate cur- rent legislation with the basic functions, even though the parties are free to agree mutually on these conditions. Another important issue is when the payment with an electronic monetary unit shall be considered to be binding with respect to third parties. Such is- sues are not possible to solve within contracts between payer and payee, as their agreements do not bind a third party. 7.2 E-money represents a claim With respect to what has been said regarding the character of data, it is not realistic to state that E-money is chattels – i.e. tradi- tional physical objects – and that legislation regarding ownership and transfer of chattels should be applicable, as a consequence of their character. There are substantial differences between tradi- tional physical objects and digital data. The same will apply re- garding judgements based on the opinion that the electronic monetary units should be banknotes. The directive (2000/46/EC) of Parliament and the Council of on the taking up, pursuit of and supervision of the business of E-money institu- tions, clarifies these issues partly thanks to the definition in the directive of E-money as monetary value as represented by a claim on the issuer. However, it is not enough to establish that the receiver of E-money obtains a claim. Completely different laws and regulations are applicable on non-negotiable claims and claims tied to negotiable instruments, and different kinds of bearer instruments tied to partly different laws and regulations exist. 7.3 An analysis of issues related to third parties Third party issues are particularly interesting for the matter of a functioning legal framework for E-money, as such issues of law are not possible to solve within contracts between payer and payee. An analysis based on functions may focus on the jurispru- dence regarding bearer bonds, non-negotiable claims and chat- tels. In this connection e.g. the following legal questions are of interest. What is the effect of holding the electronic monetary units (possession)? Does the possession function as an authori- sation or is it necessary for the payee to otherwise check the payers authorisation to dispose of the funds and to document his findings? If the Swedish laws regarding bearer bonds or chattels should be applicable, the possession of the E-money will author- ise. A right of disposition is presumed. An application of the Swedish provisions regarding non-negotiable claims will on the contrary not authorise the possessor. Thus, the payee should have to verify, at his own risk, that the payer has the funds at his dis- posal. The result is that a payee, who in good faith has acquired an electronic monetary unit and got it in his possession, is seen as the rightful owner, if the laws regarding bearer bonds or chattels are applicable, even if the payer has found a card containing the monetary units and used them unlawfully. On the other hand it should be possible for the owner who lost the card to reclaim the funds, despite the payees acquisition in good faith, if the provi- sions regarding non-negotiable claims were to apply. The same result will become visible if other legal issues related to third par- ties are analysed from these starting points. Consequently, the legal functions given by transfer (traditio) of traditional bearer bonds fit perfectly when traditional coins and bills are replaced by E-money systems. The technical and administrative IT-routines, modelled for coins and bills, have recreated the functions given by possession of traditional instru- ments and these routines are simple and functional from a legal viewpoint. 7.4 A Swedish law on emission of E-money This approach already seems to have been accepted in . The Government will shortly be taking a definite position to a to implement the EC-directive on E-money. The bill states in its travaux préparatoires that the legal principles applicable to other traditional bearer instruments, such as bearer bonds, bills and coins or chattels should be applicable to E-money. On the other hand, the provisions regarding non-negotiable claims may not be applied to E-money, as the stored monetary value is handed over when a payment with E-money is accomplished (prop. 2001/02:85 p. Consequently, the legislature has accepted a digital bit string as of a certain legal right and has not found any ob- jections to applying the legal concept of traditio in the electronic environment, provided that the system within which the digital instruments are used creates the analogous functionality as when handing over bills or bearer bonds. 8 Electronic places and incoming documents A similar survey of incoming electronic documents and the ap- proach to laws and regulations, founding their effects on the exis- tence or location of a certain physical object and place, may re- veal the need for electronic equivalents to traditional instruments and places of storage. Under Section 10 of the Act (1986:223), a traditional document – according to the main rule – is deemed to have been received by an agency the day on which the document has been delivered to the agency. This means that the paper document must have arrived on the agencys premises. The natural thing may be to apply the same principle to messages transmitted electronically and consider an e-mail, for example, to have been received by the agency when the data which represents the document has reached the agencys mail- receiving function. This may be applicable whether this receiving function is physically located in the agencys information system or has been relegated to a mediating company which furnishes a service in which the mailbox is physically located on the medi- ating companys premises. However, different approaches to the interpretation of this , and the corresponding provisions in the Swedish Code of Judicial Procedure, have been established. Some experts advocate the principle of accessibility with reference to the provisions on incoming documents according to the Freedom of the Press Act (Chapter 2, Section 6). An exten- sive application of a principle of accessibility in the procedural field could, however, entail the disadvantage that electronic documents put on a publicly available website – which is acces- sible to administrative officials but never visited by them – could be deemed to have been received by the agency. A restricted principle of access may on the other hand complicate the applica- tion of the principle of the risk, if the item of mail is de- layed or will not arrive. Further, the point of delivery would lose its connection to the function established as the authoritys elec- tronic mailbox, where delivery receipts are generated and posted according to established information system architectures. Other legal advisers claim that the procedural provisions on incoming documents should be interpreted in accordance with a principle of print-out; viz the document is deemed to have been received by the agency the day on which the message is printed on paper by the authority. The arguments for this interpretation have been limited to the statement that it has to be questioned whether it is possible to incorporate the usage of electronic documents in a time-honoured demand to communicate in writ- ing; i.e. no document exists before the print-out. Such a principle leads to a situation where only the authority is able to bring about the circumstances that will result in delivery and, consequently, will have the time of delivery at its disposal. A similar approach with the same effects is recommended in the commentary to the Swedish Code of Judicial Procedure – a principle of taking into custody – meaning that an electronic document is not deemed to have been received until a competent representative of the au- thority has taken care of it. These interpretations are difficult to reconcile with the legal rights of the individual. A party must be able to secure his rights when certain time limits are to be upheld. Consequently, when electronic filing and electronic mailboxes are put into practice the authority creates an electronic equivalent to a post-office box as- signed as the electronic place of delivery, either housed on the authoritys premises or outsourced or otherwise located some- where else, but functionally equivalent to a mail-receiving func- tion within the authoritys office. This does not mean that an electronic message must have arrived at the administrative offi- cials mailbox for incoming electronic mail within his PC. The determining factor should be when it has arrived at the server for incoming e-mail; cf. that a traditional postal letter must not have arrived at the administrative officials desk. Such a principle of electronic custody is consistent with the actual usage and proba- bly applied in the authorities daily work (c.f. prop. 1996/97:100 part 1, p. 461 et seq. To claim that an electronic message is not a document accord- ing to the Code of Judicial Procedure until data has been printed out is an example of old-fashioned jurisprudence, according to which judgements could be derived from interpretations of cer- tain general notions; so-called Begriffsjurisprudenz in a bad sense. Such an opinion will be in glaring contrast to the accep- tance, in the Government bill on E-money, of a digital bit string as of a certain legal right, controlled by the possessor and possible to hand over (traditio). The approach chosen in the Government bill makes it – simplistically described – possible to treat electronic docu- ments as documents, electronic cash as cash, account-based systems as account-based disposals, within current law. On the other hand, an approach based mainly on the historical meaning of the wordings – disregarding the practical usage – will call for extensive amendments of laws and regulations. Hopefully, the virtual IT based structures and instruments, shaped by the information system builders, will be accepted by the legislator and in case law. These concepts and categories of thought need to be reassembled into co-ordinated approaches for the IT-environment, whatever steps forward the of , will take. The question is how to create this basis without being hampered by stifling legislation or case law, based on details and technical solutions, incompatible with the speedy de- velopment driven by the Internet and World . Is there really anything to imply that there is a new legal field worth the name of IT-law? Isnt this simply a trade- mark invented by lawyers to describe all the services performed in response to demands from the information society – albeit in a new format? Or is there merit to the idea that the 21st century has brought with it a legal discipline distinct enough from other legal areas to deserve independent recognition and specialised practi- tioners? In a world where the finer points of law have been the sub- ject of analysis and debate for decades, the concept of IT-law would be considered a mere baby – all but newborn – compared to the senior citizens of general civil law. To illustrate the forego- ing, let us take a closer look at the matters requiring the attention of someone practising IT-law, and in doing so, perhaps arrive at a conclusion – is there or is there not anything out there de- serving the epithet of IT-law? 2 The scope of IT-law In , the IT field in its broadest sense is characterised by a notable dearth of court cases and literature compared to most other legal fields. In many instances, there are so few rulings that guidance has to be sought from other countries where similar matters – albeit based on national law – have been adjudicated. There is a distinct international flavour surrounding IT- practitioners which is also very much influenced by our dominant neighbour in the West. The American software industry, whose anxiety, or perhaps paranoia (as the case may be), regarding un- authorised use of software, has helped form the basis for the legal framework surrounding many of these products, has impacted heavily. Although comparing the Swedish legal tradition and its American counterpart is like comparing apples to pears, the American influence in is tangible and growing. is a member of the IT . presentation in 1. weed quietly finding its way into a bed of roses, the American legal tradition of complex, detailed contracts spelling out exact boundaries for use and crying out for impossible damages, is un- obtrusively being adopted in . Through the medium of American licence agreements fed to Swedish through subsidiaries, franchise agreements, license rights, and over- ambitious lawyers equipped with the latest small print imported from the west, the Swedish IT industry seems content enough to do business deals moulded in legal clay vastly different from own. Let us examine some issues that would allegedly fall within the scope of IT-law. All questions relating to the Act (1998:204) and other matters pertaining to the capturing of personal data – including the construction and mining of databases and any ensu- ing use and transfer of their contents – would typically spring to mind. Regulation of information handling may be thought of as state-of-the-art IT-law in its purest form, but this could merely stem from the fact that the legal environment must mirror the ef- fects of technical development to protect personal privacy as time goes by. Rather than allowing legislation on information process- ing to be considered as IT-law merely because the processing is performed by obvious IT devices such as computers and servers, this could easily be viewed as yet another area where the individ- ual is enabled to enjoy his privacy by appropriate legislative measures in the same tradition as the expansion of the 1949 Freedom of the Press Act to cover new media, for example. The Swedes, who harbour a deep respect for matters organ- ised and streamlined, have developed a number of standardised IT agreements, addressing such matters as system deliveries, IT consulting services, support and maintenance and outsourcing of IT services1. In some cases these agreements have been drafted by the supplier side only. In some cases they have been negoti- ated or at least reviewed by both sides prior to public release. Al- though these standard agreements are widely used by both sellers and buyers, including their lawyers, and are often referred to as IT-agreements, they constitute proof of the concept of IT- law. On the contrary, interpretation and understanding of these agreements normally calls for a lawyer with a good grasp of gen- eral contractual principles, i.e. somebody who understands the principles of entering into, being bound by, and terminating a contract. The fact that the object of these contracts – IT equip- Avtal 96, Utveckling –92, ABDAKA -96, Drifttjänster-99 etc. ment and services – has come to label the same, does not in itself provide any evidence of a new legal repertoire. Typically, an IT-practitioner would also come into close contact with matters such as software development, customised systems and system integration agreements as well as on-line services, electronic commerce (including internet marketing), telecommunication services and computerised crime, all of which are distinguished by their focus on services rather than goods, and more often than not by their obvious lack of physical form. There are also contracts for services performed by IT-consultants and the question of ultimate ownership to the intellectual prop- erty rights created compared to work products developed by em- ployees. However, these matters are, at the risk of repeating my- self, much more typical of contractual law, marketing law, labour law, and criminal law etc., etc. than anything else. Then we have the issues of intellectual property rights that will appear in almost every instance. There are the complex mat- ters of proprietary rights to all tangible and intangible work products that are being produced every day of the week in this age. Many, many hours are also spent in commercial negotiations when lawyers try to find a common ground to agree on matters such as recognition of ownership, agreement on joint use, regula- tion of future development, global marketing rights, potential li- censing, franchising rights, publication rights etc., etc., etc. The industry further expanded the legal horizon by bringing into focus the great importance attached to domain names. Without going into too much detail, it is clear that the domain name issue, and of course its underlying relationship to the regulations surrounding trade marks, is a key legal issue to anybody working in this setting. However, the area of intellectual property rights has seen the light of day in the context of the information society, although, admittedly, the recent techni- cal developments which will allow any ten-year-old to download the long-awaited movie from the Web five days af- ter its world premiere, have certainly highlighted the need for ap- propriate and speedy legal action. In conclusion, there seems to be hard evidence that there is indeed any such thing as IT-law. It would seem more ap- propriate to use the term as a general heading for a number of le- gal areas that become involved. Legal areas which have been brought together by the fact that the object that triggered the need for legal expertise is composed of intangible electronic data flow- ing at lightning speed and calling for different legal analysis and opinions at different intervals. Thus, it would seem that the cen- tre of legal attention is an IT-object, but the legislation involved is not. If it is difficult to find enough of reason for designating IT-law as a legal field in its own right, is there some common ground that will serve as a denominator for IT- practitioners, those le- gal fellows who work with the legal aspects of IT-related matters on a daily basis? Perhaps IT-practitioners may be characterised by the interest they take in a new and unexplored field that presents its own challenges in terms of technical complexity, terminology, and le- gal impact. Although this would seem to also require some tech- nical understanding and insight into electronic devices and their operating principles far beyond the interest of a typical lawyer, the IT-practitioners are probably better identified by their appar- ent appetite for working at the legal frontier and affinity for an innovative industry in a very dynamic environment. But maybe there is also a genuine to leave a legal footprint some- where in cyberspace? How do IT-practitioners practise? To begin with, she (or he, please interpret the further use of she as the simplification it is) probably needs to fine-tune her communication skills more than most lawyers, since an integral part of her work involves acting as a go-between and interpreter between the technical staff and the legal requirements. Although the comparison may be less than flattering, the IT-lawyer could be likened to a legal trans- former or even a processing filter, i.e. somebody who eases the communication between the legal world and the information world. Does this distinguish her from other lawyers with other le- gal specialities? This might very well be the case, as the informa- tion technology society seems to require more of its appointed legal counsel than most. Not content to remain bystanders, the citizens of the electronic world expect their lawyers to take an ac- tive part in their business, involve themselves in the task at hand and develop an understanding of their products. Many times, a client will not only ask for legal advice relating to a contract, but will also expect the IT-lawyer to provide an insight into his needs; guidance is required in more respects than traditional drafting and negotiations: the lawyer must also assist in defining what the client wants, how he should go about obtaining it, and what the contract is actually about. This is an environment where buyers are frequently unsophisticated in terms of insight and pro- fessional assessment of their own corporate needs. This is proba- bly explained by the fact that although IT-products are purchased by most if not all companies today, the buyers are usually in different industries altogether. Buying IT-products and ser- vices does not constitute the bread-and-butter of most buyers; the products are necessary, but not necessarily understood or even desired. the feeling of operating on unfamiliar territory. the increased need to rely on experienced lawyers. What other interesting distinctive features might we find in the IT-practitioner? That the IT-lawyer must be curious as a cat, interested in technical solutions, more service-minded than most, and certainly be able to switch effortlessly between legal lingo and technical mumbo-jumbo. It probably helps if she has a hands-on personality and does not mind having to do a great deal of client handholding as well. To sum it up – here is somebody who has to be very adept at out of the box thinking and able to function in the most real of real-time environments. 4 Experiences of Internet law If we hesitate to award the concept of IT-law a status of its own, is there something called cyber law available to IT-practi- tioners? The explosion of the industry in the late nineties served to illustrate a crucial point to lawyers working with the expanding Internet industry. There was no such thing as cyber law reaching across the national borders of the member coun- tries of the EU. Here was an area that did not emerge as a homo- geneous legal field, even though its late coming of age could have been a model example of how to create European legal harmonisation. When the many Internet rushed to establish them- selves across Europe a few years ago, legal advice was much in demand in respect of the planned launches on mar- ket. What every company, (especially those involved in busi- ness-to-consumer operations) interested in establishing itself across Europe discovered, was that substantial amounts had to be spent on obtaining legal advice to ensure that a site was in com- pliance with the legal framework of each country.