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Don’t Get Snagged on the Web
Avoid these legal pitfalls when launching your site.

From purchasing supplies to online investing, from B2B portals to airline reservations, the World Wide Web is changing the way we do business. Most likely you, too, have been tempted to “ride the wave.” And it might seem easy—all you need to do is set up a Web site and register a domain name, right? How hard can that be?

Wrong, says attorney Steven Weeks, of the Hartford law firm Shipman & Goodwin LLP. Plenty of problems can potentially ambush a would-be Web site.

Who owns the design?

First of all, says Weeks, your small business may not have the resources or the skills to design a Web site in-house. And that means dealing with vendors who offer a broad range of services—from a bare-bone Web site to a full-blown custom-tailored design.

“You have to check the contract very carefully,” cautions Weeks, “just to make sure you understand who owns the end product. According to copyright law, the author of a design owns the copyright to the design. That means that unless you spell out in the contract that you are the owner, you may end up not owning the copyright to your own business’s Web site design.”

Jacqueline Scheib, an attorney with Robinson & Cole in Hartford, adds another caveat: Make sure your Web site design doesn’t infringe on someone else’s. You may also need to explore whether your company’s name or its logo or service mark is already in use on the Web. And if your own site has an original design, you might want to trademark it to ensure that no one else can use it. An attorney who specializes in copyright and trademark issues should be able to help you.

Who owns the data?

It’s also important to understand who owns the data collected at your Web site.

One of the Internet’s unparalleled advantages is its interactive capability. However, the very act of collecting the data required to conduct business may touch off privacy issues regarding the ownership of the data and its reuses.

Suppose you take merchandise orders online. “In a situation like that, you’ll collect a tremendous amount of information about your clients,” says Scheib. “If you aren’t careful, your Internet service provider (ISP) could end up owning the data, which means they can sell that data to other companies—for example, direct mail houses. Or, there may be security issues to be considered if you’re planning to take credit-card orders over the Internet. All of these issues should be spelled out in your contract with your ISP.”

Who will host your Web site is another issue to address before you sign on the dotted line. You also need to know what the host is willing to promise in terms of performance. You should consider, for example, whether you want your site accessible 24 hours a day, seven days a week. Some ISPs may not offer round-the-clock availability, so make sure your site will be available when you want it to be.

“What you need to remember,” says Weeks, “is that the contract becomes the vehicle where both parties can spell out their expectations of each other, and make sure they both understand what will happen and when. Whether its fees, design, registration and renewal, or timing, these are all things you need to get spelled out in advance.”

You’re selling to the world.

Once your site is up and running, be prepared to consider even broader issues.

“A Web site is a lot more than just a storefront,” points out Weeks. “Once you join the Internet community, you’re literally a part of the global economy in ways you might never have expected.”

For example, if your business involves shipping products, you might find yourself dealing with import and export issues you’ve never before had to deal with. As a part of the global community, you must consider the effect that different legal systems and cultures could have on your business. There may be tax ramifications, advertising laws, or cultural considerations that could affect your business in ways you’ve never considered. Again, an appropriate expert, such as an attorney or an international trade specialist, may be in order.

The World Wide Web offers exciting new opportunities for businesses both big and small. With careful planning, a good understanding of the potential issues and challenges, and a clear contract, you can join the e-commerce revolution without getting snagged.

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