In the year In 1997, Thelen Reid & Priest established an Internet practice group of attorneys from various company departments dedicated to legal issues arising in the growing online business environment. Since then, the number of Internet law cases handled by the firm has increased significantly. But since the Internet is such a recent phenomenon, many companies still don’t realize all the pitfalls that can lead to doing business online. Even business people and general counsel are learning how to surf the Internet safely. This article aims to inform businesses of those legal risks – and how to avoid them with timely legal advice.
- Controlling the Internet
- Managing your online presence
- Contract on the Internet
- Exposure to foreign jurisdiction risk
- Internet and Email Policies and Workplace
- Public company affairs
- Internet Practice Group by Thelen Reid & Priest
1. Controlling the Internet
Any company, even one that does not do significant business online, should be concerned about the potential harm caused by the online behavior of others. Prime examples include trademark infringement, copyright infringement, defamation, and unauthorized access crimes. We recommend that all our customers be proactive in controlling the Internet to protect their interests. Brand risk has changed in the online environment. Legal risks in the area of trademark law have changed with the advent of the Internet. There is no such thing as a local or regional trademark on the Internet – the global nature of the Internet means that unregistered trademarks that previously did not conflict due to geographic or industry separation have come into conflict when used online. – Native advertising is accessible in all markets. In the competition over desirable domain names — phrases like “thelenreid.com” that companies use to identify their websites — unregistered marks are at a particular disadvantage. In short, the Internet places an increasing premium on registered trademarks and unique “strong” marks. It places great value on diligence in securing the Internet to detect infringing uses as early as possible. Over the past year, we have dealt with several cases involving disputes over ownership rights, some of which resulted in litigation or the threat of litigation, while others were resolved by one of the disputing parties purchasing the domain name.
Online defamation of companies and management is on the rise. Companies are bombarding themselves with negative websites that disparage their products, management, financial status, work practices, or other business practices. Such sites regularly trick users away from the company’s official site by closely mirroring the domain name or using the target company’s trademark on their own pages, and pull the critical page based on the search query intended to find the official page.
Offensive and actionable content can be found in investment oriented chat rooms or chat rooms organized around a specific industry focus. Many ex-employee sites have been established specifically to air grievances against former employers. Additionally, like conventional media, the Internet can be a hotbed of copyright infringement, misappropriation of celebrities’ names or likenesses. “Hacking” or improper access torture is becoming more common.
Many of our customers conduct Internet searches to find trademark infringement, copyright infringement, or misrepresentation. Others ask us to do that service for them. The good news is that we can usually get the infringing or defamatory material removed without litigation, but sometimes it is impossible to negotiate a reasonable settlement and achieve the results of litigation. In the year In the summer of 1998, Thelen Reed attorneys obtained a preliminary injunction in federal court against the promoter of such a fraudulent website on behalf of a non-profit group whose mission and message was compromised on the site. The defamation site diverted users from the company’s official site by using (and misusing) the company’s trademarked name. The preliminary injunction was upheld by the Third Circuit, and the permanent trial of that case is ongoing.
2. Setting up your online presence
Most companies now have some internet presence, which allows them to carry out a complete range of electronic business activities online, from simple, electronic advertising to complex web sites, including online communication and communication. Execute contracts with the company’s supply chain, distribution channels and end consumers. In some ways, the process of developing a website is simple. Professional web developers can take your company through the entire process from initial concept to final design. In most cases, the developer hosts the page on the server, handles updates, and sets up electronic payment and encryption systems. However, such providers frequently offer standard web development and hosting agreements that contain hidden time bombs that can cause major legal problems down the road.
Development agreements should be clear about ownership of intellectual property. The parties may not share the same assumptions about who will own the intangible property rights, including copyright, trademark, patent, and publicity rights, in the developed product. Silence on this matter, however, should not be taken as consolation. Under copyright law, the work for hire doctrine may not apply, leaving the developer to retain full ownership of the work he creates for the other party. A development contract should specify who owns the content for the site, otherwise conflicts may arise if the company decides to upgrade the site or move it to a new host.
Performance specifications and warranties are essential features of any development contract. The contract should specify procedures for receiving and testing the finished page. Web hosting deals also raise concerns. No one likes a website that is down, slow, or otherwise unreliable. A web hosting agreement should specify the level of service the company will pay for. Considering the ability of a company to terminate the agreement due to failure to maintain the agreed service levels.
Often hosting services take care of domain name registration. This is fine as long as the registration is done on behalf of the company or transferred to the company. Problems can arise when the host owns the name and the company wants to switch hosting services online.
Having a website is not enough; Instead, passengers expect updated information. For this reason, the web host must provide tools specified by the company to enable remote updating via file transfer. Some web hosts offer updating services. Other companies may choose to have their original developers provide updates. In any case, a company should consider who will provide the updates and how they will be integrated into the website. The hosting agreement should also include security responsibilities. The use of advanced software and “cookies” can provide useful information about site visitors and their use of the site. Visitors may be asked to provide personal information during registration or in connection with transactions. Such information may be used to further improve a site to better serve its users. Often a company will want to control any information found on its website, however this information may be useful to the hosting service. The hosting agreement should specify which party has the right to access information obtained from users.
Finally, a company should be able to move its website to another hosting server at short notice, especially if it violates a web hosting agreement. The contract requires the web host to broadcast the site’s content through the company’s chosen media at 24 hours notice. The web host is obligated to provide reasonable assistance in transferring to another server, at least if the termination is not due to a breach by the company.
The above outlines the factors that should be carefully considered in creating an internet presence. Just because everyone from startups to Fortune 500 companies has websites, it doesn’t mean that the form agreements offered by web developers and web hosts provide the necessary protection for a company looking to do business online.
3. Contract on the Internet
In some ways, the Internet is an ideal environment for contracting with business partners or end consumers. Because it is essentially real-time and interactive, an online contract can be structured to avoid the ambiguities that can arise from exchanging paper documents in the real world. The so-called “war of the forms” often occurs when businesses exchange pre-printed forms when entering into contracts. While those forms may agree on basic terms such as price, quantity, delivery, and the like, they often include different boilerplate terms regarding arbitration clauses, choice of forum, warranty limitations, opportunities to cure, and so on. An Internet contract can only be set up in one form – the provider – only accepting the terms presented. Acceptance of binding terms presented in free text can be avoided by providing that it can be expressed in only one way – by “clicking” or writing “I accept” in a box. Similarly, the instantaneous nature of the Internet eliminates misunderstandings in the timing of offer and acceptance, such as whether the offer was outstanding at the time…