Related Contacts

  • Co-Chair
    215-751-2364
  • Co-Chair
    215-751-2254
  • Print
  • Email
  • Save as PDF

E-Commerce and Technology

Schnader has recognized experience in the laws of information technology.  Our lawyers have been at the forefront of E-Commerce and Internet law since the advent of the digital age.  Theresa Loscalzo, co-chair of Schnader's E-Commerce and Technology Practice Group, has taught electronic commerce at Villanova University School of Law and serves as the general editor and author of multiple chapters of the treatise Business to Business Internet Exchanges (September 2002). Ronald Karam, co-chair of the Firm's Intellectual Property Group and a former member of the technical staff at Bell Laboratories, taught computer and Internet law at the University of Pennsylvania Law School from 1997 through 2001.  As our clients’ technologies and needs evolve, Schnader’s lawyers have helped them navigate the legal issues that arise with compliance, government regulations, social media, and privacy and data protection.

Our lawyers also have a wide range of experience — in transactions, counseling clients, lobbying, court cases and arbitrations — in areas of the law that are at the center of the commercialization of the Internet. These areas include e-contracts, licensing, trademarks, copyrights, patents, restrictive covenants, trade secrets, privacy issues, free speech issues, antitrust issues and various other matters. Our lawyers have provided counseling to clients on a wide variety of issues involving companies in many different industries and have handled a number of high-profile cases involving e-commerce.  They are drawn from varied sub-practice areas within the Business Department and the Litigation Department that mirror the breadth and diversity of issues presented by computer-related communications.

Commercial Contract Issues

Our lawyers have handled a wide variety of transactional matters relating to e-commerce and the Internet. For example, we have:

  • Represented a major equipment leasing firm in the negotiation and preparation of licensing agreements and service level agreements to establish an Internet portal to automate decision making on credit requests by the firm's customers.
  • Handled all legal aspects of the establishment of the premiere online collaboration and project execution Internet portal for engineering and construction projects, including licensing of third-party technology used in the service, negotiation of hosting agreements, drafting of subscription agreements, terms of use and privacy policies, and protection of trademarks and other intellectual property.
  • Served for many years as principal outside counsel with respect to e-commerce matters to one of the country's leading online retailers of goods and services. We have handled dozens of transactions for this client, including affiliation and advertising agreements, development and licensing agreements, marketing agreements, linking agreements, data feed agreements, portal agreements, agreements with search engine operators and many others.
  • Served as principal outside counsel to the operator of one of the world's leading sourcing and buying websites for industrial products and services.
  • Drafted contracts between a broadcaster and advertisers pursuant to which the broadcaster is to provide Internet home pages to advertisers in exchange for purchase by advertisers of air time.

Members of our team have advised about and drafted a variety of contractual agreements, separate and apart from privacy and electronic communications-type policies described below, that are specific to and arise only from e-commerce and computer-related activities. For example, Schnader lawyers have:

  • Advised clients, including various online retailers, concerning how to structure their e-commerce dealings with suppliers and customers to limit their legal exposure for breach of contract, warranty claims, damages liability, etc.
  • Advised educational and other nonprofit institutions on Internet sponsorship and advertising issues and developed policies of general application.
  • Drafted customer agreements for financial institutions for use in Internet banking and web administration policy for online banking activities. 

Many e-commerce disputes arise from the basic contracts governing the parties' relationships. We have handled multimillion dollar suits and other traditional commercial types of disputes arising from Internet-specific issues. For example, Schnader litigators have:

  • Defended an Internet service provider (ISP) against a claim regarding a significant breach of a linking agreement.
  • Handled a breach of contract case involving the effectiveness (or lack thereof) of lead generation technology in an Internet subscription relationship.
  • Prosecuted ProtoComm v. Novell, a case that involved a claim, by a small software development company, that Novell and its predecessor, Fluent, breached a joint development agreement and misappropriated computer technology belonging to ProtoComm for video streaming. Schnader litigators tried the case and obtained a jury verdict for $12.5 million.
  • Handled a significant arbitration in Bentley v. Intergraph and obtained a substantial award for Bentley in royalties under its software license. 
  • Represented the First Judicial District of Pennsylvania in a dispute over the failure of the docketing system developed and installed by a vendor to be Y2K compliant.

Free Speech Issues

Schnader's general media experience:

How do varied state and national laws relating to defamation, pornography, commercial speech and political advocacy apply to the world of cyberspace — a world that by its nature transcends jurisdictional boundaries? Schnader has broad experience in the law of libel and other communications-related torts through its long-standing representation of media clients, and it carries this knowledge to the world of cyberspace publishing. The Firm offers 24-hour pre-publication advice to communications media about whether speech presents a risk of liability and providing specific advice on ways to publish that are likely to help clients avoid liability. The Firm also counsels on reporting techniques, including wiretap statute requirements. Schnader has had extensive experience defending libel and similar tort cases — including precedent-setting decisions in the Supreme Court of the United States and more traditional litigation in federal and state trial courts.

Specific applications to e-commerce:

Our lawyers were among the first to begin to parse the free speech implications of the use of the Internet. Our lawyers were making presentations in this area from the infancy of the Internet and have been rewarded by being asked to participate in several high profile cases. For example, Schnader lawyers have:

  • Acted as counsel for amici in the U.S. Supreme Court both in ACLU and American Library Association v. Reno, involving constitutional challenges to the Communications Decency Act of 1996, and in Ashcroft v. American Civil Liberties Union, involving a constitutional challenge to the Child Online Protection Act of 1998.
  • Counseled ISPs and provided opinion letters regarding liability as a "content provider" under Section 230 of the Communications Decency Act based on a variety of our clients' activities.
  • Defended an aviation industry website in an action brought for allegedly defamatory comments made on the site.
  • Counseled an ISP and provided opinion letter regarding liabilities arising from the criminal acts of a customer.
  • Defended a major newspaper in a defamation action involving the publication of plaintiff's website in the newspaper as an illustration in an article on Internet pharmacies.
  • Defended an online newspaper from allegations that it made defamatory statements on its website and should also be liable for statements made by others in its chat room.

Intellectual Property Issues 

Intellectual property issues involving computers and the use of the Internet have created a hotbed of litigation activity. Schnader lawyers have addressed issues in the following areas, among others:

What copyright protections apply to materials created and disseminated on computer networks, and what liabilities attach to the use of downloaded materials? The Firm's lawyers advise software licensees, publishers and broadcasters on copyright questions ranging from registration to fair use.

What trademark or other protections apply to domain names? Our lawyers have handled an array of domain name disputes, in many different forums, including state and federal courts, as well as through the Internet Corporation for Assigned Names and Numbers (ICANN). We have represented the trademark holder, the challenger and the registrar in connection with these types of disputes. For example, Schnader litigators:

  • Represented domain name registrars in several disputes over domain names.
  • Represented NSI in litigation concerning pre-registration practices.
  • Represented trademark holders in various domain name disputes through the use of ICANN's dispute resolution procedures.
  • Successfully obtained transfers of more than a dozen domain names for various companies through uniform dispute resolution arbitrations before the World Intellectual Property Organization and through settlement negotiations and unilateral demands.

Schnader litigators also have handled complex litigation involving disputes relating to the development of sophisticated software products. We have represented both plaintiffs and defendants in these types of actions.

Our lawyers also have been involved in various lobbying efforts relating to the domain name system.

Privacy Issues

What privacy rights attach to electronic communications over computer networks? Or through websites? Or in connection with maintaining the confidentiality of leases and finance proposals, sending e-mail or publishing on a website in connection with certain financial transactions? With the proliferation of e-mail over private companies' local area networks, tensions have arisen between the privacy expectations of e-mail authors and the institutional concerns of employers and network administrators who need to monitor network communications. And, with the rapid expansion of interactive websites, tensions too have arisen between the privacy expectations of customers, and the interests of website operators who want to utilize customer data for marketing purposes.

In addition to generating the need for counseling, training and vigilance in protecting proprietary interests, privacy issues have arisen in both tort suits for invasion of privacy and in litigation in the bankruptcy context, such as cases in which a company that represented that it would not sell its customer lists then attempts to do so as an asset in bankruptcy. Issues have arisen under the FTC privacy guidelines; the new federal health and financial privacy laws; federal and state wiretap laws; and increasingly also under foreign privacy laws, including the European Union's directives in this area and the "safe harbor" provisions.

Schnader's experience: Our lawyers have a deep understanding of the parameters of privacy law on Internet and computer-based communications. For example, we have:

  • Reviewed and provided counsel on national and international customer privacy issues arising in context of worldwide joint venture agreements between entertainment and gaming clients.
  • Offered counsel on the adequacy and implementation of privacy policies for organizations that include online retailers, hoteliers, software companies, educational institutions and tobacco companies.
  • Counseled various online retailers regarding the scope of various privacy directives and regulations, including COPPA.

Internet Use/Misuse Issues

A plethora of issues have surfaced regarding the use and misuse of electronic systems. These issues arise in a broad range of contexts, ranging from investigations challenging inappropriate political activity by a company's employees and a nonprofit institution's use of sponsorships and advertising to help fund its website operations to suits under Title VII in which inappropriate e-mail transmissions form the basis of the charges. Issues have also arisen in breach of fiduciary duty suits in which employees are charged with inappropriately transmitting confidential company information outside the company and in various litigation matters involving alleged violations of statutes enacted to address computer communications and use.

Our lawyers have written and lectured extensively in the area of Internet use and misuse and have handled numerous matters for a variety of clients. For example, we have:

  • Reviewed existing policies, and drafted new policies, governing employee use of electronic systems in a wide array of industries.
  • Assisted in developing electronic data retention policies.
  • Conducted training sessions for employees of client companies.

Antitrust Issues

Schnader has extensive antitrust experience, spanning many decades, that encompasses both traditional litigation and counseling. We have represented both defendants and plaintiffs and been involved in many significant and even precedential matters involving all aspects of trade regulation — restraints of trade, distribution arrangements, mergers and acquisitions, price and promotional discrimination and the like. This experience has positioned us to handle any antitrust issues that might arise in the e-commerce context. Specific applications to e-commerce: We have already been called upon to represent various clients in antitrust matters relating to the Internet. For example, Schnader lawyers have:

  • Represented various publishers in Robinson-Patman Act litigation challenging pricing and promotional policies as favoring Internet book retailers.
  • Counseled various companies in an array of industries regarding the propriety of various proposed Internet sales terms and distribution arrangements.
  • Consulted with various clients and prospective clients concerning alleged antitrust violations involving e-commerce.

Many of the e-commerce and high technology issues that have arisen since the explosion of Internet communications are industry-specific and, thus, require an understanding of how business in a particular sector of the economy is done. The following list of matters undertaken by Schnader e-commerce lawyers highlights the broad range of industry sectors in which they practice:

Financial Industry:

  • Advised a financial institution on various litigation and regulatory issues involving its ISP subsidiary.
  • Drafted customer agreements for use by a financial institution for Internet banking.
  • Drafted and advised on web administration policy for online banking activities.
  • Negotiated and drafted agreements to establish an online portal to facilitate credit decisions.

Telecommunications Industry:

  • Advised ISP regarding liability for acts of its customers.
  • Advised a telecommunications provider with respect to effect of wiretap laws on ability to monitor employees' online marketing communications with customers.

Computer Industry:

  • Defense of Packard Bell/NEC, Inc., in class action dispute over alleged flaws in floppy disk controller.
  • Prosecution of Valitek v. Hewlett Packard Imation and Iomega patent litigation involving technology related to a personal computer's parallel printer port.
  • Representation of Bentley Systems in Bentley v. Intergraph, a case concerning royalties under Bentley's software license to Intergraph.
  • Representation of Astea in Mitsubishi v. Astea, a litigation concerning an alleged breach of an agreement to set up an ASP.
  • Representation of an Internet services provider in the automobile insurance industry pertaining to claims of misappropriation of software and source code.
  • Representation of an airline against claims that its software infringes a U.S. patent and misappropriates the trade secrets of the patent holder.
  • Representation of a hardware company in breach of contract and fraud litigation arising out of agreement to provide software, source code and related services for computer routers.
  • Representation of SAP in Logistics Exchange v. SAP, a case involving claims of misappropriation of proprietary software technology.
  • Representation of SAP in Global Knowledge v. SAP, also a case involving misappropriation of proprietary software technology.

Schnader has provided similar services for Primavera Systems (and its PrimeContract.com division), Radian Group Inc., Thomas Publishing, Inc. and New England College of Finance.