2007 Lane Reports

Make Your Website an Asset and Not a Liability

Tuesday, May 1, 2007
by Cori A. Mathis, J.D.

Web site templates and inexpensive domain names have allowed individuals and companies of all sizes to own web sites. The sites serve as creative outlets and advertising tools, and they provide access to an audience of virtually unlimited size. However, along with these benefits come significant legal risks. All web site owners should be aware of these risks and how to navigate around them so that their web sites are a valuable asset rather than a liability.

This Lane Report article will identify a few ways that you may be vulnerable to legal liability as a web site owner and discuss strategies for limiting that liability. Since every web site is different, this is not meant to be an exhaustive list and in no way replaces a comprehensive web site audit that can be performed by a knowledgeable attorney, ideally before the site is even launched. A legal review is particularly recommended for web sites that include health, medical, legal, financial or investment topics, or that allow visitors to enter into transitions.

Web site ownership

A preliminary issue that is easy to gloss over is who actually owns the copyright in your web site content. The copyright owner owns all significant rights to a site. Therefore, it is important to ensure that you are the owner of your site and, if you are not, to take the steps necessary to transfer ownership.

If you created all of the content on your site from scratch and did not transfer those rights, it is probably safe to assume that you are the copyright owner.

Yet, more often than not, web site owners use employees, independent contractors and web design firms to create their sites. And, instead of creating all content from scratch, web site owners often borrow content, video or graphics from other sources.

If the site was created by an employee, you can assume that you own the copyright in the site as the employer. But, it is very important to confirm that your employee is just that and not an independent contractor. Regardless of the name you give that person, there are specific factors that distinguish employees from independent contractors. The distinction is significant because employers generally own their employee's work product, but do not own an independent contractor's work product. Entering into an employment agreement with all of your employees and a work-for-hire agreement with all of your independent contractors that addresses copyrights can ensure that you will own the content they create for you.

When you use a third party to create your web site, may it be a friend, college student, or web design firm, it is very important to confirm in writing that you own all rights to the web site content. If a form agreement is provided by the designer, it is highly recommended that you have an attorney who practices in this area review the agreement before you sign it to ensure that you will have the rights in your web site that you need.

If elements of your site were copied from other sources, you also need to make certain that you have permission to use the copied material. In order to avoid copyright infringement claims, it is best to obtain written permission for all third party material that is on your site. For example, if you include on your site an article written by someone else or a video clip that you did not create, you need to request and obtain permission from the appropriate source. If you use a picture from a clip art software disk that you purchased, you need to read the license agreement that came with the disk to determine how you can and cannot use that clip art.

Once you have confirmed that you own the copyright in your web site, documented that ownership in a written agreement, and obtained all third-party permissions, you will want to protect your content. You should include the appropriate copyright notice at the bottom of each web page and register the copyright with the United States Copyright Office. By doing so, you will be giving notice to all visitors to your site that you are claiming ownership in its content and will have certain rights to stop a third party that may copy that content.

Adding Links

Adding links to your web site may make that site more interactive and attractive. However, if not done properly, links may also open you up to unexpected liability.

A third party will generally not object to you adding a simple link to their homepage on your site. However, third parties very often object when web site owners add deep links to their site. Deep links are hyperlinks that connect to a web page other than the home page. For example, instead of linking to the homepage of a newspaper's web site, you link to an article that was posted on one of its web pages. You should obtain written permission prior to doing so, or avoid adding deep links on your site.

Third parties may also object when you use their logo as a link to their site. Logos are very often trademarks, and using third-party logos on your site may spur trademark infringement claims. Again, you should obtain written permission prior to doing so, or not include third party logos on your site.

Collecting Information

Your web site may collect information from visitors in a number of ways, including cookies, Web bugs, and a contact form that allows visitors to submit their personal information, comments or a question. Although these tools may be good business practices, they carry significant legal implications.

Various laws and regulations govern the privacy rights of individuals. These rights extend to the Internet. Accordingly, if your web site collects information from visitors in any way, it is important that you have a privacy policy on your site.

Privacy policies inform visitors of the type of information you are collecting, how you store that information, and if, how, and to whom you will share that information. The privacy policy should be accessible from each page of your site, and is often included as a link near the bottom of each page.

California has an online privacy protection statute that requires any site that gathers personal information from individuals in California to have a privacy policy. The policy must include all of the above, as well as an effective date, a statement that the company has the right to change the policy without notice, and a description of the process in which an individual can review and request changes to their personal information, if such a process exists. Many people believe that most, if not all, states will file California's lead and soon adopt online privacy legislation of their own.

Posting Visitor's Content

An interesting web site feature is adding visitor's content to your site. This is often done by inviting visitors to submit their stories, opinions, and testimonials for you to add to the site, or by including an electronic bulletin board which allows visitors to post their comments.

Whenever third party material is included on your site, it is important to make certain that you have the right to post that material and that the material is not defamatory, invasive of one's privacy, fraudulent, vulgar, confidential or infringing. This is often done through a "Terms and Conditions" document in which visitors grant you the right to use their material and warrant that their material is not unlawful. Ideally, the Terms and Conditions should be prominently placed on your site and visitors must affirmatively agree to the document by clicking an "accept" button.

Through the Terms and Conditions, you may also set out certain disclaimers and limits of liability that are important for all web sites, whether or not visitor content is posted on that site. Specifically, you may disclaim responsibility for any damage that may occur to a visitor's computer by using your site, require visitors to defend and hold you harmless from any legal action that may arise due to that visitor's use of your site and limit the remedies that visitors may seek from you.

Conclusion

Although web sites can be excellent business tools and creative outlets, they can also make the site owner vulnerable to legal liability. By being aware of these risks and having an attorney involved as early in the process as possible, you can limit your liability and make your web site work for you instead of against you.

An intellectual property attorney at The Law Offices of Marc J. Lane can help you develop your web site or review your current site. For further information, please contact Marc Lane in confidence via email at [email protected] or via telephone at (312) 372-1040 / (800) 372-1040 (outside Illinois).

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Cori A. Mathis, J.D., is an Associate Attorney with The Law Offices of Marc J. Lane, a Professional Corporation. Ms. Mathis received a certificate in Intellectual Property Law from the DePaul College of Law.


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The Lane Report is a publication of The Law Offices of Marc J. Lane, a Professional Corporation. We attempt to highlight and discuss areas of general interest that may result in planning opportunities. Nothing contained in The Lane Report should be construed as legal advice or a legal opinion. Consultation with a professional is recommended before implementing any of the ideas discussed herein. Copyright © 2007 by The Law Offices of Marc J. Lane, A Professional Corporation. Reproduction, in whole or in part, is forbidden without prior written permission.

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