Past JLTP Abstracts - Volume 2002 Issue 1


In Defense of Cyberterrorism: An Argument for Anticipating Cyber-Attacks

Susan W. Brenner & 
Marc D. Goodman


The September 11, 2001, terrorist attacks on the United States brought the notion of terrorism as a clear and present danger into the consciousness of the American people. In order to predict what might follow these shocking attacks, it is necessary to examine the ideologies and motives of their perpetrators, and the methodologies that terrorists utilize. The focus of this article is on how Al-Qa’ida and other Islamic fundamentalist groups can use cyberspace and technology to continue to wage war against the United States, its allies and its foreign interests.

Contending that cyberspace will become an increasingly essential terrorist tool, the author examines four key issues surrounding cyberterrorism. The first is a survey of conventional methods of “physical” terrorism, and their inherent shortcomings. Next, a discussion of cyberspace reveals its potential advantages as a secure, orderless, anonymous, and structured delivery method for terrorism. Third, the author offers several cyberterrorism scenarios. Relating several examples of both actual and potential syntactic and semantic attacks, instigated individually or in combination, the author conveys their damaging political and economic impact.

Finally, the author addresses the inevitable inquiry into why cyberspace has not been used to its full potential by would-be terrorists. Separately considering foreign and domestic terrorists, it becomes evident that the aims of terrorists must shift from the gross infliction of panic, death and destruction to the crippling of key information systems before cyberattacks will take precedence over physical attacks. However, given that terrorist groups such as Al Qa’ida are highly intelligent, well-funded, and globally coordinated, the possibility of attacks via cyberspace should make America increasingly vigilant.

The Internet, Regulation and the Market for Loyalties: An Economic Analysis 
of Transborder Information Flows

Paul D. Callister


As the Internet has gained prevalence, attention has turned to its regulation. Indeed, regulation proves to be a unique and complex problem, given the Internet’s lack of traditional borders and boundaries. Highlighting possible avenues of regulation, the author discusses neo-classical economic theory, specifically Monroe E. Price’s “market for loyalties” theory. Although originally applied to the regulation of broadcasting, the author contends that the “market for loyalties” theory can also be applied to the Internet. Building on Professor Price’s pioneering analysis, the article extends the theory to examine market elasticity’s effect on the loss of monopoly control over information flow (as a result of the Internet).

Because the fundamental nature of information defies traditional legal and economic models, regulation of the Internet is problematic. In addition, the sheer scale, social aspects, and functional design of the Internet itself make effective regulation difficult. Governments are also faced with the dilemma of limiting Internet access while still leveraging its economic benefits. Nonetheless, governments have attempted to regulate the Internet through content filtering, Internet surveillance, and self-policing.

By applying the “market for loyalties” theory, the article analyzes the behavior of states in regulating transborder information flow and predicts the consequences of unsuccessful regulation. After summarizing the theory and setting forth its elements, the author explores the relationship of exchange between identity and the competition for loyalty and identifies factors which destabilize the status quo (in terms of diminished loyalty). Indeed, in the interest of self-preservation, the government asserts monopoly power over the market for loyalties. Thus, regulatory schemes change when the balance of power shifts, or when existing regulation proves inadequate to maintain the status quo.

By comparing the efficiency of two different markets, citing Singapore and China, and considering the role of elasticity in each market, the article details the possible ramifications of a loss of monopoly control for each market. Because elasticity is a function of the prior penetration into the market of competing products (or identities), the author concludes that the most restrictive regimes face the greatest turmoil (as expressed in decline in loyalty resulting from increased competition). Finally, the author delineates the “market for eyeballs” theory and why the “market for loyalties” as expanded in his discussion provides a more thorough analytical framework.

Selective Refusals to Sell Patented Goods: The Relationship Between Patent Rights and Antitrust Law

Seungwoo Son


On the issue of whether a patent right includes the right to selectively refuse to sell, differing viewpoints have been taken among the Circuits, in addition to, the Federal Trade Commission (“FTC”), on whether such refusals violate antitrust law. This article takes the position that patent rights are limited to the extent of balancing the promotion of a competitive marketplace and granting incentives for continued development of intellectual property (“IP”). The article analyzes its position in the context of technologically innovative markets. The article first provides a background on antitrust law on refusals to deal outside the context of IP rights. Next, a study is made of the effects of changing technology on the patent system. This is done by first looking at the first-sale, repair, and patent misuse doctrines. An economic analysis and empirical study is then made looking specifically at innovation and competition within the context of the patent system. From the perspective of high-technology markets, studies have shown that innovation is generally driven more by competition that by patent rights. The author therefore suggests that a patent holder’s right to refuse should be redefined when viewing hightechnology markets. An alternative approach is proposed for redefining a patent holder’s rights of refusal by looking to the first-sale and repair doctrines, actual business reliance, dynamic competition and public interest arguments. This alternative approach is then applied to the case law with the intention of reconciling the differing viewpoints among the courts and the FTC to provide a clear line between circumstances where refusals to deal by an IP holder will and will not be subject to antitrust scrutiny. The article finally offers what a proper remedy would be in the case of an unlawful unilateral refusal. to license by a patent holder. This includes looking at some of the potential remedies used to restore competition in the case of illegal refusals to deal such as trebling of damages, injunctive relief, compulsory licensing, price regulation, duties to deal and non-discriminatory selling. The author concludes that pure refusals to deal by an IP holder will as a general rule promote innovation and competition. An IP holder will be scrutinized from an antitrust perspective, however, where it engages in conditional or selective refusals to deal.


Spying on the Mob: United States v. Scarfo – A Constitutional Analysis

Nathan E. Carrell


The Pioneer and Generic Drug Manufacturer Agreements: Is the Sherman Act Big Enough to Swallow these Pills?

Peter J. Prommer


The Presumption Against Implied Transfer of Electronic Rights in Licenses Under Section 201(c) of the 1976 Copyright Act: A New Right for the Bundle?

Robert H. Thornburg