YOUR BUSINESS AUTHORITY
Springfield, MO
by Joe Johnson
for the Business Journal
In the past decade, Internet use in business has literally exploded. Unfortunately, few laws have developed for Internet users that clearly define their rights, obligations and liabilities. The only certainty is that Internet laws change almost daily and will certainly continue to change in the future.
Numerous Inter-net users have found themselves in court, sometimes in far-off venues, for seemingly innocuous activity on the Internet. Recent lawsuits have included battles over First Amendment issues, copyright disputes, trademark disputes, pirating of information and contract issues, to name a few.
So, how do you steer clear of potential legal problems? First, proceed with caution. Second, keep up on current trends in the law applicable to Internet usage. Here are some legal do's and don'ts to get you started.
Contracts. Typically, businesses wishing to use Internet services enter into an agreement with an Internet service provider or other online service. Be careful, because most of these contracts indemnify the service provider and place all the liability on the business owner who operates and maintains the web site.
Keep in mind that electronic contracts, where the parties signify assent by clicking an icon, are generally as enforceable as a written and signed agreement. Contracts with web page designers should transfer all the rights in the finished product to the owner of the web site.
Copyrights. After contracting with the web designer, make sure that all materials incorporated in the site are either original, used with the owner's express permission, or a part of the public domain.
That's because transferring images, sounds or video over the Internet does not generally alter the copyright protection originally provided for that material.
In other words, merely placing a photograph from a magazine onto the Internet does not extinguish the original copyright held by the photographer or magazine publisher. Taking sounds from the radio, compact disc or other source does not abrogate the original rights obtained by the performer.
And, the owner of the business that operates the web site may be ultimately liable for any copyright infringements for materials found on their sites.
Generally, the Internet provider and the web page designer will have immunity under the Telecommunications Act of 1996 or will have obtained indemnity through their contract with the business owner.
Trademarks. Like copyrighted material, trademark rights persevere and apply on the Internet. Incorporating the trademarks of others into a web site without permission may give rise to liability for infringement.
Tort Liability. Yet another concern relates to liability arising from the advertisement of goods or services on a site. Business owners who advertise on a web site are ultimately liable for any fraudulent, false or misleading advertising.
The web site host may also incur some liability for advertisement of defective goods or goods that ultimately harm a consumer.
Other dangers for business Internet users include the risk of defaming another person, liability from providing false or misleading information, invading the privacy of another and unfair competi-
tion.
The laws relative to Internet use on each of these areas are not well defined.
Jurisdiction. One of the obvious perils of doing business over the Internet is the potential for lawsuits in far-away places. Courts are divided on the issue of jurisdiction (i.e., where a person may be sued) based on Internet use.
Earlier decisions established that a lawsuit could be maintained in any jurisdiction in which you intended a person to be able to access your Internet site. That meant your company could be sued by someone in Washington and held responsible under the laws in that state.
Recently, more courts have been looking at the significance of the contacts between the person or business providing the Internet service and the person or entity claiming injury from those goods or services.
Hyperlinking. Hyperlinking allows a web site operator to direct users immediately to other sites by clicking on a symbol or icon. It is not uncommon when designing a web page for a business to borrow icons from other sites in order to allow users to quickly access other web pages or databases by hyperlink or "linking."
Recent litigation has addressed issues arising from linking one site into the middle of another site, thereby bypassing the entryway into the second site. That means bypassing sponsorship ads on the first page of a site.
By allowing a user to link into the middle of another site, bypassing the entryway (and the ads), users are deprived of total access to the second web site, and site owners possibly lose advertising dollars.
The current trend is to enter into linking agreements whereby a contractual arrangement defines linking requirements. Before linking to any other web sites, the Internet user should contact the potential link site operator and determine whether an agreement is necessary or whether the operator desires to have a link.
If hyperlinks are going to be placed without contacting the linked site operator, it is advisable to link to the entryway of the linked sites.
Privacy and secrecy. The number of products or services purchased with credit cards on the web has dramatically increased, thus increasing the need for security on a web site.
After all, consumers expect their credit card numbers will be safe and secure, even on the Internet.
Moreover, they do not anticipate that their names and addresses may become part of a customer list, which will be sold to vendors.
A web site should clearly communicate if the business intends to sell or otherwise use a consumer's name, address or other information.
Keep in mind that virtually any information posted on the Internet can be accessed by others, so if you want to keep information private, you must use adequate security measures.
Limiting liability. Recent court cases have determined that providing an "I Agree" icon, which requires the consumer to click on the icon prior to obtaining services or goods, does create a binding contract.
Therefore, if there are any policies, obligations, duties or liabilities that the business owner wishes to impose on the consumer, it is essential to set forth the language on the web page and require the consumer to agree to those terms prior to providing the services or goods by clicking on the "I Agree" icon.
Sounds like a lot to keep in mind when dealing on the Internet, but remember, the Internet itself is a good source for Internet law.
There are also several books which give guidance on how to set up and operate an Internet site in a manner designed to eliminate many of the potential liabilities.
However, since laws pertaining to Internet use continue to change, some books on Internet law are out of date at publication. So, your best bet for specific questions on novel areas of liability is to talk with an attorney familiar with Internet issues.
(Joe Johnson is a member of the intellectual property group of Lathrop & Gage LC in Springfield.)
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