Wednesday, January 18, 2012

Websites: Seven Deadly Sins a Business Owner Should Avoid.

You can hardly be in business in this day without a website, but before the website goes live you need to take the appropriate steps to protect the website content and reduce exposure to claims by persons accessing the website.  Below are seven important areas a business should address before the final version of the website becomes available to the public.  Do not commit any of the Seven Deadly Sins of website development as any one of them can create substantial liability or damage to your business.

  1.  Failing to Make Sure You Own What Others Develop.  You need to take proper measures to ensure you own all the underlying intellectual property and other rights relating to the website.  If you are  outsourcing the website development, do not execute an development agreement or accept the services of the developer until a written agreement is in place which gives your business ownership of all of the content, rights and intellectual property associated with the website.  If an employee or consultant is handling the website development, review the employment agreement or consulting agreement to make sure it grants the company ownership of all the rights.  I have reviewed many website development agreements for clients only to find that the agreement does not clearly address the issue, leaving open the possibility that a third person can claim it owns the intellectual property and content of your business website.  Similarly, do not let the developer incorporate any content or intellectual property of a third party without your approval and a proper license/permission to use the content.

2. Not Protecting Your Content.  Take the following steps to protect the website content:

                  a.  Copyright the Website:  Include a proper copyright notice on each page of the website, similar to the following:  Copyright  © 2012 The Berkman Law Firm, PLLC.  All Rights Reserved.

                  b. Trademarks:  If you are using any trademarks you have registered include the registered superscript ® symbol after the mark; and if you are applying for a trademark, include the superscript .  You should also determine whether you want to seek registration of any trademarks.

                  c. Patent:  If your site has a unique function or capability, speak to a patent attorney as to whether you have any patentable aspect before you upload the website -- while there are rules allowing you to go public before applying for a patent, there are time limitations and other issues that you should discuss with a patent attorney to ensure you do not jeopardize any of your potential patent claims.

3.  Failing to Include Relevant Terms and Conditions of Use.  Your website should include Terms of Use that are posted in easily accessible manner.  These Terms of Use not only spell out rights of users in accessing the website, but the restrictions, limitations, disclaimers on access and use of the website -- i.e., your business policies.  As I have written in a prior post, do not just cut and paste the terms from another website as the Terms of Use (and the Privacy Policy) should be tailored to your business and your website.  For example, if your website sells a product, it may not be sufficient to have a link to the Terms of Use at the bottom of the home page (referred to as bellow the fold) if the terms contain an important restriction a customer should be advised of prior to placing an order.

4. Failing to Include an Appropriate Privacy Policy.  Similar to the Terms of Use, the Privacy Policy should be drafted in accordance with the nature of your business operations and policies.  As an example, there are important restrictions and disclosure required if you are marketing to your customers or wish to store their customer information for future use.  You do not want to violate the privacy rights of customers/users, as the exposure can be devastating to the business.

5. Not Incorporating an End User License Agreement.  If a user is downloading any software or application from the website, as a condition of the download the user should consent to an end user licensing agreement (EULA).  While the terms of a well-drafted EULA are for another discussion, the important point is access to any downloads should be preceded by the user's consent to the EULA.

6. Failing to Make any Necessary Disclosures?  Aside from certain standard information or disclosures you might need to include in the Terms of Use or the Privacy Policy, there may be disclosures you will want to prominently include in the website.  For example, a retail business may want a separate link to its return policy; or if your website recommends goods or services, the fact that you receive a fee for the recommendation must now be disclosed under Federal Trade Commission rules.

7. Oops, Do I Own the Domain Name?  You would think that this  issue would have been discussed as the first topic, but it is meant to illustrate how ridiculous it is that some businesses start developing a website, branding and promoting their products/services before checking if the domain name is available.  It is a simple process to check the availability of a domain name:  check the WHOIS link on the site of any domain registrar, and it will tell you if the domain name is available.  If it isn't, unless you have a case for trademark infringement or cybersquatting, move on and find another available domain before you waste time and money. And, before you choose a domain name, make sure no one else owns a trademark so you do not face an infringement or cybersquatting claim.  After you register a domain name, consider filing for a trademark to protect your rights.

As a business owner, you do not want to make any of the above seven mistakes when putting up a website because the liability, and/or the cost of rectifying, one mistake can be substantial and even destroy a business.  

Disclaimer:  The discussions in this blog do not constitute legal advise nor create any attorney-client relationship.  You are urged to seek the advice of an experienced lawyer who can provide counsel with respect to your corporate/business law matters.