STLR Link Roundup – February 13, 2013

eShopping and the Constitution: How Far Does State Taxation Power Extend?

Last week, Amazon and challenged a New York state law requiring the collection and payment of sales tax on all online transactions for which a New York-based entity “directly or indirectly refer[ed the] customers.” States have the authority to tax sales that occur within their borders. However, “virtual presence” has blurred state lines and created a valuable, tax-free e-commerce market.

In the 1992 decision in Quill Corp. v. North Dakota, the Supreme Court held that retailers who do not operate within a particular state need not collect sales taxes on sales to buyers in that state. New York, however, has tried to skirt the issue by defining the Supreme Court’s “nexus” requirement as one satisfied by the presence of third-party referrers, an action Amazon and Overstock dub unconstitutional. Only time will tell if New York has gone too far.


Standards-Essential Patents: Court-Mandated “Sharing” of Intellectual Property Rights

Last Friday, ITC’s (U.S. International Trade Commission) Administrative Law Judge Pender dismissed one of Nokia’s patent infringement claims against HTC, holding that the patent was “standards-essential” and, therefore, must be available to other companies on a fair, reasonable, and nondiscriminatory (FRAND) basis.

U.S. Patent No. 7,366,529 grants Nokia the exclusive (not so much anymore) rights to the use of a “communication network terminal supporting a plurality of applications.” Basically, the patent claims a method for synthesizing information for the performance of multiple applications and effectively transmitting them for use on a smartphone. Judge to Nokia: It is your property. But they get to have it too. At a “fair, reasonable, and nondiscriminatory” price.


Life, Liberty, and Tax-Free Internet Access

In difficult economy times, Senators Ayotte (N.H.) and Heller (Nev.) look to protect the Internet from government opportunism. The surge of Internet communication has resulted in a significant hit to the U.S. Postal Service, causing the Postal Service to max out its available credit of $15 billion in loans from the U.S. Treasury, and the Internet has been eyed at all levels of government as a lucrative, potential revenue source.

In 1998, Congress passed the Internet Tax Freedom Act, which barred all levels of government from taxing the use of e-mail and various other forms of Internet access and usage. The current Act is due to expire near the end of 2014. Ayotte and Heller hope to extend the ban on Internet taxation indefinitely in an act they claim will “provide certainty to the marketplace, helping the Internet continue to be a driving force for jobs and growth.” “In this world nothing can be said to be certain, except death and taxes.” But then again, Benjamin Franklin did not have the Internet.


Illegal Spammers Migrate to Legal Alternatives for the Lower Pricetag

Spamming has become a serious problem ever since the ubiquitization of the Internet and cheap, almost-zero-marginal-cost modes of communication. The never-ending deluge of legal and governmental attacks, constantly reengineered mail filters, and sophisticated Internet security measures have failed to quash, or even successfully temper, mailbox inundations. However, the almighty dollar has significantly ameliorated the spamming problem.

With the overwhelming popularity of Facebook and similar social networking sites, it has become more cost-effective for would-be-spammers to buy banner space than to pursue their more sordid alternatives. Depending on the selected “universe” to which one’s advertisement is posted, side-of-the-page Facebook ads cost only pennies per click.

Never underestimate the power of a dollar.

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