John A. Rothchild

Making the Market Work: Enhancing Consumer Sovereignty Through the Telemarketing Sales Rule and the Distance Selling Directive

This article analyzes the provisions of the Telemarketing Sales Rule, which the Federal Trade Commission promulgated in 1995 pursuant to the 1994 Telemarketing and Consumer Fraud and Abuse Prevention Act. The author proposes a framework through which the Rule may be understood as embodying a regulatory strategy of controlling abusive telemarketing by enhancing the effectiveness of market forces. In particular, the Rule works by improving the quantity and quality of information flowing to consumers, preventing the occurrence of transactions that the consumer does not truly intend, preventing telemarketers from evading the effects of market forces governing availability of payment mechanisms, and enhancing the effectiveness of the contract regime.The article then applies the same framework to the 1997 Distance Selling Directive of the European Union, yielding several recommendations that EU member countries may find useful when transposing the Directive into national law. The author also discusses some of the special considerations that EU member countries should take account of when transposing the Directives requirements in the context of electronic commerce.

Understanding Network Neutrality

The idea of network neutrality has dominated telecommunication policy discussions over the past few years to an extent unprecedented in the history of that subject matter. In March 2015, the Federal Communications Commission (“FCC”) issued a detailed scheme of regulation that makes network neutrality the law of the land, via a regulatory framework called the Open Internet Order. The path by which the FCC arrived at the Order was anything but direct, and the fate of the Order is yet to be decided by the courts. This chapter offers a guide through the thorny paths of network neutrality. The chapter begins with a review of the historical precursors to network neutrality regulation, starting with a 1956 court decision that disapproved an effort by AT&T to ban the attachment of non-harmful devices to the phone system, and continuing through FCC rulemakings in the 1960s and 1970s that governed the participation of telephone companies in the provision of services that involved processing of data. These competition-enhancing rules led to a 2005 FCC policy statement that set forth a set of principles that the FCC would apply to ensure that Internet service providers would not be able to distort competition by discriminating against particular content, applications, or non-harmful devices. The principles underlying the policy statement were then implemented in a 2010 rule. In a 2014 decision, the D.C. Circuit invalidated the Order as inconsistent with the FCCs statutory authority. The FCC thereupon initiated a new rulemaking, which resulted in its issuance of a new Open Internet Order in 2015. As of the writing of this chapter, a challenge to the 2015 Order is pending before the D.C. Circuit.The chapter continues by analyzing the content of the 2015 Order, placing it in the context of its historical antecedents. It concludes by addressing several objections that opponents of network neutrality regulation have raised to network neutrality regulation.

Exhaustion of intellectual property rights and the principle of territoriality in the United States

The geographical scope of exhaustion is a highly contested issue in intellectual property law. Exhaustion occurs when the owner of an intellectual property right transfers ownership of a particular embodiment of that right, such as by selling a book or a DVD embodying a copyrighted literary work or movie, a machine with a patented design, or a consumer product sold under a trademark. Geographical scope refers to the geographical limits, if any, within which the sale must take place, or the article must be manufactured, in order to trigger exhaustion. Under a regime of national exhaustion, intellectual property rights to a particular article are exhausted only if it is sold or manufactured within the country whose intellectual property laws the rights owner has invoked. With international exhaustion, the location of sale or manufacture is irrelevant, and any authorized transfer of ownership results in exhaustion. The difference between the two exhaustion regimes is of great importance to both producers and consumers. National exhaustion offers the producer a tool by which it may segment markets geographically, preventing parallel importation of intellectual-property-containing products that are intended for another national market, and allowing it to sell the product at different prices in different markets. Consumers, on the other hand, may prefer a regime of international exhaustion, which may result in a broader selection of goods on the secondary market as well as the ability to purchase a cheaper version of a good that was originally sold at a lower price in a foreign market.Courts that have addressed the scope of exhaustion under the U.S. patent and copyright laws have sometimes invoked the well-established proposition that those laws have no extraterritorial reach. Some courts have held that this principle of territoriality implies a regime of national exhaustion.In this chapter I seek to clarify the relationship between the geographical scope of exhaustion and the territorial limits on the effectiveness of intellectual property laws. I demonstrate that, contrary to what some courts have held, national territorial limits on the scope of the intellectual property laws are consistent with a regime of either national or international exhaustion. I also show that the principle of national treatment, which underlies the system of treaties that governs international aspects of intellectual property protection among most of the world’s countries, is likewise consistent with both national and international exhaustion.