The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the "CAN-SPAM Act" or "Act") became effective on January 1, 2004. The Act, which regulates the use of commercial email, not only affects traditional "spammers" but is equally applicable to all businesses that use email and the web for marketing purposes. Background The CAN-SPAM Act was primarily enacted in response to the rapid increase in the volume of unsolicited commercial email. Congress was also responding to the action of the California legislature which enacted a law, to become effective on January 1, 2004, that would have prohibited sending spam unless the recipient specifically "opted-in" to receiving such emails. Congress passed the federal CAN-SPAM Act, in part, to preempt state legislatures from establishing conflicting standards of spam regulation. Applicable Parties - "Initiators" and Businesses who Derive an Economic Benefit The provisions of the CAN-SPAM Act apply to "initiators" of unsolicited email. If, however, a business does not send unsolicited email, but (i) knows or has reason to know that its good or services will be promoted through such email, (ii) receives an economic benefit from such promotion, and (iii) takes no action to prevent or report the unsolicited email, it will be liable under the Act, even though it did not itself send the email in question. Applicable Content - Commercial Email The CAN-SPAM Act applies to all "commercial email." The Act, however, does provide a limited safe harbor for "transactional and relationship messages" between a business and its customers. Affirmative Requirements of the Act If your business is sending electronic communications subject to the provisions of the CAN-SPAM Act, these communications must now contain the following information:

• Notification that the communication is an advertisement or commercial in nature;
• An opt-out mechanism meeting certain requirements allowing the recipient to choose not to receive any future unsolicited email messages from the sender; and
• A valid postal address for the sender.

Additional requirements apply if the email contains sexually-oriented material. Civil Prohibitions of the Act The CAN-SPAM Act also provides civil penalties for any of the following acts:

• Using a deceptive header or transmission information;
• Harvesting email addresses without authorization;
• Using "open proxies" or "relays" to deceive ISPs or recipients as to the origin of the email; and
• Falsifying header and registration information to obtain email accounts, domain names or IP addresses.

Criminal Prohibitions of the Act In addition to the civil penalties stated above, the CAN-SPAM Act imposes criminal penalties if a party commits any of the following acts:

• Accessing another party's computer without authorization to sending or retransmitting unsolicited messages;
• Materially falsifying header information in multiple commercial email messages; or
• Making a false representation in the registration of five (5) or more IP addresses and sending prohibited emails from these addresses.

Enforcement The CAN-SPAM Act does not provide for a private cause of action by a recipient of an unsolicited email. The Act may be enforced only by the Federal Trade Commission, state attorneys general, other federal agencies authorized to enforce the Federal Trade Commission Act, and internet service providers (ISPs). Individual states may also enforce their own anti-spam email laws, but only to the extent such laws prevent deception in sending commercial email. On March 4, 2004, the first lawsuit under the CAN-SPAM Act was filed against BobVila.com for sending email in violation of the Act. Since then, America Online, Earthlink, Yahoo! and Microsoft have all begun to enforce the provisions of the CAN-SPAM Act by filing numerous lawsuits. If you have further questions with regard to electronic marketing practices, please contact Bob Felber or Mark Plotkin of the Intellectual Property Group. The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.