General Practice, Solo & Small Firm DivisionMagazine

Business and Commercial Law

Welcome to the Web: Pointers for setting up a site of your own

By Caroline H. Little

The first step into cyberspace involves getting a domain name, which is essentially an Internet address that allows the addressee to receive information from and provide information to others. There is nothing to prevent a third party from registering a name identical or similar to your client’s as long as the name does not infringe on your client’s trademark or service mark rights. By the same token, your client could be forced to stop using a domain name if it infringes the trademark or service mark rights of a third party. It is also recommended that businesses obtain the domain names for all of their valued trademarks.

Those publishing or distributing or "uploading" content on the Web need to ensure that publishing third-party content does not violate any third-party rights. The Website publisher must either own the underlying copyright in the content, or have obtained the license to upload the content. Generally, if the creator of the content is an employee, and the content is created in the scope of his or her employment, then the employer will own the underlying copyright of the content and is free to use the work however it pleases. On the other hand, if the content has been created by a third party then, absent a written "work for hire" agreement to the contrary, or an assignment of the content, the content must be licensed specifically for use on the Internet. The best approach when using content from freelancers on the Web is to obtain a "work for hire" agreement to maximize flexibility; if a freelancer refuses to enter into such an agreement, be sure to obtain all the rights necessary at the outset to avoid subsequent negotiations and additional costs.

The license agreement should be in writing and specify that the rights granted to the licensee are worldwide. The licensee distributing the content on the Internet should obtain representations and warranties from the licensor that the licensor has the right to grant to the licensee the right to upload the content online, that the content is original, and that the content itself does not infringe the rights of any third party, including without limitation, copyright, trademark, libel, defamation, privacy and other proprietary rights.

A few additional features should be considered in uploading photographs, art and other graphics. If a company’s Website includes photographs of an employee on the job, the company should obtain a release from the employee consenting to the use of his or her image online. Similarly, the photographer should obtain rights from any models, as well as the right to use the model’s likeness online.

If a Website owner uploads music online, the Website owner must ensure that it has the right to upload the musical composition. Performance rights for a musical composition may be directly licensed from the publisher or composer or, more frequently, from one of the performing rights societies, such as ASCAP and BMI. In addition to the public-performance license, the Website owner will also need an additional "mechanical" license to store a copy of the musical work, which is generally licensed by the music-publishing company, the Harry Fox Agency. Further, the Website owner will need to secure a license to Web cast the sound recording of the musical composition.

In some instances, a license may not be necessary to distribute content on the Web. For example, if the content is in the public domain (e.g., the copyright has expired) no license is required. The fair use doctrine may apply to permit the use of certain copyrighted material in very limited circumstances. More likely to be available in an editorial context than an advertising context, the doctrine depends on four factors: the purpose and character of the use; the nature of the copyrighted work; the amount or portion of the work used in relation to the copyrighted work; and the effect of the use on the market for or value of the copyrighted work.

A disclaimer provides additional protection online, particularly if a Website includes content distributed by third parties. It should disclaim any responsibility for third-party content, such as content posted on the Website in a chatroom or bulletin board or in an ad. Online defamation and copyright infringement are concerns. For publication of third-party content, the Website owner should be viewed as a distributor, not as a publisher of third-party content. Section 230 of the Communications Decency Act of 1996 protects online publishers from distributing defamatory statements originating from third parties.

A Website owner may want to include additional provisions in a disclaimer or other area concerning terms and conditions, depending on what is offered on the Website. For example, if subscribers enter into commercial transactions online and enter credit card numbers, Social Security numbers and other proprietary information, the Website terms and conditions should provide that the Web is not secure, and that the Website owner is not responsible for lapses in security, including improper use of such information by third parties. If the Website owner intends to use any content from a chatroom or other such board area, the Website owner should add in its terms and conditions that by participating in the chat room, the Website owner has an implied license to use such content. If your client seeks to facilitate commercial transactions or to have confidential information on the Internet, the confidentiality of financial information cannot be guaranteed and others need to be aware of this.

The use of consumer information regarding preferences provided by consumers should be consented to, knowingly, before a business uses the information. If a Website publisher offers advertising online, an agreement with the advertiser should provide that the advertiser is complying with all applicable laws pertaining to its business.

Any agreement with third parties for software downloads should address the export controls relating to software. Software containing encryption codes may be banned from export to certain countries or banned from export altogether without a license issued by the Department of Commerce.

Any content posted on the Website should contain the appropriate attribution to the underlying copyright holder. The business’ site should contain any other provisions that are relevant to the content. The disclaimer should contain the terms of proper use as well as additional permissions information. It should disclaim any warranties regarding use as well as responsibility for any technical errors. It should state any policies it has, as well as the fact that it is not responsible for any third-party content on the site. It should also state that the business is not responsible for any updating of the content on the site.

Just as a party distributing content over the Web needs to secure the necessary rights to do so, copyright owners need to protect their content, which in the online arena can be tricky. The disclaimer described above should include prohibitions against copying and further dissemination of content. The disclaimer should also prohibit "framing" – a variation of hyperlinking by which a party’s content is "framed" by another party, so that the framed party’s content, including ads, is hidden, and the Universal Resource Locator or "URL" of the framed content does not appear. It also can imply an undesired connection to the framing party.

Caroline H. Little is vice president of administration and general counsel of Washingtonpost.Newsweek Interactive, the new media subsidiary of The Washington Post Co..


- This article is an abridged and edited version of one that originally appeared on page 15 in Business Law Today, March/April 1998 (7:4).

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