There are many laws and regulations that apply to doing business on
the internet or operating a web site. Violating a law can subject
a web site owner to substantial civil liability, including the risk of
defending a class action lawsuit. In addition, some online
activities such as offering an illegal lottery instead of a legal
sweepstakes can impose criminal liability if not done properly.
Web site owners should know and understand what laws or rules apply to
their web sites.
-
The
Children's Online Privacy Protection Act of 1998: If
you operate a commercial web site or an online service directed to
children under 13 that collects personal information from children or
if you operate a general audience web site and have actual
knowledge that you are collecting personal information from
children, you must comply with COPPA. The Federal Trade
Commission may bring enforcement actions and impose civil penalties
for violations of COPPA.
-
Trademark
Issues: Does the name
of the web site or your product name infringe on any federally
registered trademarks or service marks? Does the web site use
any meta tags that contain registered trademarks or service marks
that might create trademark infringement?
-
Anticybersquatting
Consumer Protection Act: Does the web site's domain
name infringe on any federally registered trademarks or service
marks? In lieu of actual damages, the Act authorizes the court
to impose statutory damages on cybersquatters of not less than
$1,000 and not more than $100,000 per domain name.
-
Domain
Name Issues: Do any existing domain names infringe on
your trademark(s) or service mark(s)? Does the web site owner
actually have "legal title" to the domain name or is it
held by the web site developer, the internet service provider or an
employee? Does the web site owner have any written evidence
from a reliable source that shows who owns the domain name? We
all can find the title to our car and the deed to our house, but can
you find anything to show that you own your domain name? Do
you know who will get the notice from your domain name registrar
that the domain name renewal fee must be paid to avoid losing the
domain name? What would happen if the renewal notice was sent
to a person who is no longer employed by your company? When is
your domain name renewal fee due? Have you paid the renewal
fee for a period longer than one year?
-
Copyright:
Does the web site owner actually own the copyright to the web site
or is it owned by the web site developer or an employee? Does
the web site display proper copyright notices? Did the web
site owner file a copyright registration for the web site with the
U.S. Copyright Office? Should the owner obtain a federal
copyright registration? Does the web site owner
understand copyright issues as they relate to web sites and
copyright infringement?
-
Digital
Millennium Copyright Act: Does the web site take
advantage of the safe harbor provisions of the Act to eliminate or
reduce the risk of copyright infringement caused by content uploaded
to the web site by users? Does the web site notify its users
of the name and email and mailing address of the agent authorized to
accept notices of alleged copyright infringement? Has the web
site filed a notice with the U.S. Copyright Office designating its
copyright agent?
-
Privacy:
Does the web site have a privacy policy? If so, is it
adequate and is it being strictly followed? Do the proper
employees know and understand the privacy policy and make sure that
the policy is followed? Does it make sense to obtain Trust·e
and/or BBBOnline privacy
certification?
-
User
Agreement: Does the web
site need a user agreement? If the web site has a user
agreement, is it legally binding? Does the web site user
agreement have a choice of law provision that provides for exclusive
jurisdiction and venue in your state and county if a dispute
arises? Does the agreement limit the web site owner's
liability and disclaim all warranties?
-
Legal
Issues: Does the web site disclaim
liability for the accuracy of information contained on the web site
or on web sites to which the web site links? Does the web site
display other necessary disclaimers?
-
Affiliate
& Content Provider, & License Agreements: Does
the web site owner have written agreements for all transactions
involving third parties that provide content or data or that receive
content or data? Do the agreements contain confidentiality
provisions to protect the confidentiality of user data? Do
content providers represent and warrant that all content will not
infringe on the intellectual property rights of any third party and
agree to indemnify the recipient of the content from any alleged or
actual intellectual property right infringement?
-
Sweepstakes
and Contests: If the web site offers a sweepstakes or a
contest, is it legal or is it an illegal lottery? If the prize
is more than $5,000, did the web site provide proper notices to the
States of New York and Florida and post any necessary bonds?
Does the sweepstakes have adequate rules posted on the web site?
-
Advertising:
Does the web site comply with advertising laws and guidelines such
as the Federal Trade Commission's rules applicable to bait and
switch, catalogs, children's advertising, comparative ads, contests
and sweepstakes, credit, disclosures and disclaimers, endorsements
and testimonials, food ads, franchises and business opportunities,
free claims, guarantees, internet advertising, leasing, mail order
advertising, pricing, and rainchecks?
-
Framing
and Linking: Does
the web site use frames when linking to other web sites or deep
linking in such a way so as to create liability?
-
Insurance:
Do you carry the proper types of insurance for your online
activities? Are you covered for intellectual property
infringement on your web site or for defamation that is published on
your web site by you or a user? Does your insurance cover
invasion of privacy and other types of privacy liabilities?
Would your insurance cover you if a hacker obtained credit card
information from your database or if an employee improperly used
credit card information?
-
Tax
Issues: If the web site
sells products nationally, does it collect sales taxes for sales in
jurisdictions in which it has "nexus" when required by
law?
-
International
Law: Does the web site offer goods or services to
citizens of countries outside the United States? If so, does
the web site comply with applicable foreign law? For example,
if the web site collects personally identifiable information from a
citizen of a European Union country, the European Union requires
that the web site not collect any information until after it first
obtains the consent of the user. Note: Your U.S.
attorney cannot advise you on compliance with foreign laws.
The attorney who performs a web site audit
must have a broad range of experience in internet law. Ask
the attorney some of the questions raised above to determine if he or
she is familiar with the issues and can respond knowledgably. Do
not hire anybody who cannot adequately discuss the above issues with
you. Use caution when engaging the services of a lawyer who is an
intellectual property lawyer and who also claims to be an internet
lawyer. Intellectual property law is important to web site
operations, but it is just a small piece of the big legal pie.
Most intellectual property lawyers have a limited knowledge of internet
law unless they have spent substantial time becoming educated as to
internet law.
They say "an ounce of prevention is
worth a pound of cure." How much is it worth for a web site
to discover that it violates the Children's Online Privacy Protection
Act so that it can eliminate the problem and avoid being the subject of
an expensive and nationally publicized Federal Trade Commission
enforcement action? How much is it worth to find out that your use
of users' personally identifiable information violates privacy laws and
could cause you to become the defendant in a class action lawsuit?
