Have a written agreement with the
developer and host of your web site (which
may be the same or different individuals or companies). Before
the site is created, address issues such as having a firm
timeline for completion of the site, acceptance testing of
the site to verify loading and operation, rights to third
party content, and ownership of the site content and deliverables.
When discussing hosting with your Internet Service Provider
(“ISP”), determine what type of Internet connection
is being made and who will be responsible for its maintenance,
ensure that the host properly maintains the server and has
the necessary back-up/mirrored server to protect against potential
problems, and address the issue of obtaining the domain name
for the web site up front and, if the host is obtaining the
web site domain name, require, upon termination of the hosting
contract, that the domain name be transferred to you and that
a forwarding link be left in its place. You may want to have
an attorney draft the Development and Hosting Agreements,
as well as Terms and Conditions for access and use of the
site and potential other legal content for the site.
If you collect
personal information from visitors to your site, you may need
legal privacy issues. At the moment, privacy policies are
not legally required on a web site unless an ebusiness is
directed toward certain consumers. Therefore, determine whether
you fall within the purview of these laws, and consider the
requirements of both United States and foreign laws, given
the international scope of the Internet. For example, the
Children’s Online Privacy Protection Act (“COPPA”)
applies to web sites directed at children or that knowingly
collect information from children under 13 years of age, and
must conform to the European Union’s Directive on the
protection of personal data that requires an individual’s
specific, informed and unambiguous consent for the use of
required or not, you must strictly adhere to the posted policy.
Forms of notice, choice, access and security should also be
Copyright Issues. Copyright
issues are some of the most problematic with regard to web
sites, mainly because it is so easy to copy and distribute
large amounts of content via the Internet. It is important
to remember that the absence of a copyright registration does
not mean that it is alright to copy the work.
Any original work fixed in a tangible medium is automatically
protected by copyright regardless of whether any copyright
formalities have been exercised. You may be liable for copyright
infringement for posting pictures, text, music and other third
party content on a web site. To avoid such issues, you should
obtain written permission from the copyright owner(s) prior
to posting such content on your site. Otherwise, you will
likely violate the copyright owner’s exclusive right
to reproduction, public display and public performance of
Third Party Content. You must also be concerned
with the use of other third party content on your web site.
Submissions on bulletin boards, chatrooms and the like give
rise to potential liability for defamation, harassment, and
copyright or trademark infringement.
What is Protected on the Internet? Unfortunately,
there is no easy answer to this question. However, it is safe
to say that original text, graphics, audio, video, HTML code
and all other unique elements that make up the original nature
of the material are protected by copyright laws.
Browsing. Browsing the Internet is an activity
shielded from legal liability. “Browsing” refers
only to the act of viewing a web page and does not include
printing or saving the content of the viewed web page.
Even when an unauthorized copy of a work has been created
and is available for viewing on the Internet, © 2003
Danica L. Mathes & Jeffrey L. Michelman www.EntertainerLaw.com
it is not the person who privately views the copy, but the
person who provided the unauthorized copy for
viewing on the Internet who is liable for copyright infringement.
Linking. A link can be considered a virtual
button that allows a web surfer to be transported, at the
click of a mouse, to another site without having to key in
the site address. One might think that just providing a link
to another web page could not possibly violate copyright laws.
Think again. While basic linking has not yet been found to
constitute infringement, the easy way to avoid the potential
for infringement is simply to obtain permission to create
the link. Most likely the web page owner will be happy to
share their link, as that means that their site will have
more visitors. However, “deep” linking (when a
link bypasses a third parties’ home page and advertisements)
and “framing” (if a third parties’ site
content is encapsulated in another site (i.e., the user cannot
tell that they are actually looking at a third parties’
site and believe they are still on a different site) can be
actionable. Obtaining permission to create a basic link
is often as simple as sending an email to the webmaster of
the site for which a link is desired. Permission for deep
links or frames may be more difficult to obtain. While formal
linking agreements are sometimes created, a back-and-forth
exchange of emails giving permission for the link will also
suffice. Just remember to get permission in writing and keep
a tangible copy of the agreement in a file cabinet in case
a dispute arises.
Photographs, Graphics and Text. When copying
third party works from whatever medium -- Internet, book,
magazine, newspaper -- and scanning or typing the material
into the computer, one must obtain permission from the copyright
holder in order to reproduce the copyrighted work. One possible
solution is to use commercial clip art that can be purchased
and comes with warranties against copyright infringement.
However, if an individual or organization creates an original
photograph, musical composition or literary work, the work
belongs to that individual or organization and they own the
copyright. (Note: An organization should make sure to obtain
a work-for-hire agreement from employees and independent contractors
if they are creating works to avoid ownership disputes.) Be
sure to obtain a
“model release” from people in photographs before
posting the photographs on the Internet.
Music. When music is used in conjunction
with visual works, the music is considered to be synchronized
with the visual works. In order to incorporate third party
music into a web site, one must contact the copyright owner
of the work or the publisher to negotiate and obtain a synchronization
license to use copyrighted music on a web site.
Who Needs Copyright? This is Fair Use! In
some rare instances, copyrighted material can be used without
permission. The fair use exemptions to U.S. copyright law
were created to allow for use of copyrighted works for commentary,
parody, news reporting and research without having to obtain
the author’s permission. If applicable, the fair use
doctrine provides a complete defense to otherwise unlawful
copyright violations. Consult counsel to determine if a use
Trademark Issues. Trademark
issues have become a big area of concern for web site operators.
The issues that usually arise involve infringement, dilution,
linking, framing and cybersquatting.
Domain Names. Before you adopt a domain name
for your web site, it is strongly suggested that you conduct
an extensive trademark search to determine whether the domain
name could infringe the rights of a trademark owner. Even
if a domain name is not identical to a trademark, it could
still potentially infringe a trademark by confusing potential
customers as to the source of the web site. As domain names
are often akin to and as important as the sign on a brick
and mortar business, it is imperative that you protect yourself
from a potential infringement action by performing a trademark
search prior to doing business on the Internet. At the same
time, you should be analyzing whether your domain name should
be the subject of a trademark registration in its own right.
Once the domain name has been chosen and registered with a
domain name registrar2 and design of the web site has begun,
you should make sure that
any use of another’s trademark is entirely descriptive
and in good faith.
Cybersquatting. If you are unable to register
your trademark as a domain name, another entity may have a
legitimate claim to use the same domain name, or you may be
the victim of a cybersquatter. “Cybersquatting”
is a practice whereby individuals seeking extortionate profits
by reserve Internet domain names that are similar or identical
to trademarked names with no intention of using the names
in commerce themselves.” Cybersquatters often register
numerous domain names containing trademarks or trade names
for the purpose of holding them ransom or to divert Internet
traffic to their sites. To combat the rise in cybersquatting,
Congress enacted the Anti-Cybersquatting Consumer Protection
Linking. Often, a web site owner will try
to link its site to another party’s site. While ordinary
linking should not require permission, if you attempt to bypass
a third party’s home page with your attendant advertisements
- a procedure known as “deep linking” - you are
likely to be challenged as misappropriation and potential
trademark infringement. You will want to consider the possibility
of entering into a linking license with sites that you wish
to utilize as well as the issue of posting a disclaimer for
link material in order to advise visitors that they are leaving
your site and entering a third party’s site. A relative
of deep linking is the practice of encapsulating third party’s
content in another’s web site, which is called framing.
This practice may similarly constitute trademark infringement
and unfair competition. You will definitely want to use a
licensing agreement to engage in this practice.
Advertising, Promotion and Sales.
You may want to register your web site with search engines
in order to achieve maximum exposure.3 In this regard, you
should be careful regarding the use of key words and metatags
-- hidden text that directs traffic to a web site -- in your
web site HTML code that will attract
search engine activity. The improper use of third party trademarks
within metatags can constitute trademark infringement and
dilution. However, a descriptive use of a mark – or
using a mark to refer to its owner’s actual product
-- can be a non-infringing use if it does not create an improper
association in consumers’ minds between the descriptive/nominative
user of the mark and the actual owner of the mark.4
When analyzing your metatags, make sure the
use of another party’s trademark in a metatag is a fair
descriptive use and not an attempt to lure visitors away from
sites operated by the trademark owner. Because metatags are
used to catalog the web site and attract new visitors, any
use of someone else’s trademark should be done only
as a way to describe the web site’s products and services,
any other type of use could be infringing. Once again, adherence
to the FTC Act5 regarding advertising should be reviewed,
as online advertising is no different from all other advertising
as far as FTC compliance is concerned.
Depending on the type of product or service
represented by your web site, you should also analyze the
applicability of Federal Trade Commission (“FTC”)
Act6 with regard to certain types of activity that, for example,
may mirror the mail and telephone order business. For instance,
according to the FTC’s mail and telephone order rule,
orders must be shipped within the time promised (or within
30 days) or the seller must inform the consumer of the delay,
provide a revised shipment date and give the buyer the option
to agree to the delay or cancel the order and receive a refund.
These rules are also applicable to your web site.
Only Two Things in Life Are Certain,
Death and…Taxes are another important factor
in your web site. You should evaluate which taxes will be
imposed upon any transactions conducted through the web site.
It is unknown whether the temporary ban on discriminatory
taxes associated with Internet access and services, which
is currently in effect until November 1, 2003, will be continued,
given the pressure by state governments to begin taxation
of Internet sales. At a minimum, if you have an office or
other physical presence within a state, the chances are they
will be liable for sales tax for online transactions.
International tax issues, such as VAT taxes,
customs duties and sales and use taxes must also be addressed
for the sale of products online and in international territories.
In any case, working with your tax advisors will be essential
with regard to your Internet sales activities.
# Doing business online may create jurisdiction over the web
site owner depending upon the type of web site which is operated.
A purely passive “mere advertising” web site is
unlikely to provide personal jurisdiction in any state other
than where the web site entity resides. On the other hand,
making online contracts and doing business in other states
will create jurisdiction in these other states, although the
exact level of activity that must take place is not a bright
line test and will depend on the circumstances in each case.
# There are a number of international issues that arise if
the web site is intended for use beyond residents of the United
States. In addition to the tax issues and jurisdiction issues
discussed earlier, you would be wise to discuss with foreign
counsel the web site’s compliance with local law in
terms of its activities within a given foreign jurisdiction.
You may even consider offering different versions of the same
web site for different foreign markets and affirmatively point
foreign visitors to those different versions.
# You should also consider whether or not your sale of products
online in multiple territories will
conflict with or breach any pre-existing agreements with distributors
of your products in those
# Be sure to address security issues as part
of the initial development concepts. Examples of security
issues include such things as use of digital signatures, electronic
payments, authentication methods, certification authorities
# The DMCA also bans trafficking in and marketing of devices
primarily designed to circumvent the use restriction protective
technologies. This may be a factor in your site.
# Other matters to consider include whether you understand
the liability you may incur through the transmission of unsolicited
commercial e-mail (“spam”). Make sure your emails
comply with state and potentially federal spam laws.
# Obviously, the last thing you should consider is whether
you have the infrastructure to handle the success that may
result from the web site. Ultimately, this may be a problem
that is beyond the normal purview of counsel, but yet, if
addressed early enough, can prevent serious repercussions.
Conclusion. The laws relating to the Internet are much like
the Internet itself, newly developing, changing rapidly, increasing
explosively and reacting to user demand. Tread carefully,
as there are no certainties on the Internet. Ask permission
to copy from and link to other sites, and make sure content
is owned by or licensed from the proper parties. The safest
course of action is to contact an intellectual property attorney
to review a web site for any potential infringing content
and other legal issues. Good Luck!