Sitesurfer Resources:

Internet Web Site Development: Legal and Practical Issues to Consider

William Shaw, Sitesurfer Publishing (October 1998)

I. INTRODUCTION

The ability to self-publish on the Internet's World Wide Web (Web) is one of the most useful aspects of the Internet - second only to electronic mail (email). It puts right into the hands of the content gardener the ability to communicate his or her message to vast numbers of people across the globe in very short order, and for very little cost. And unlike email which may be lost in transit, mis-addressed by the sender, or mistakenly deleted by the recipient, a published document on the Web, a Web page, remains posted in cyberspace for all to see until the publisher decides to edit it or remove it. Further, the Web enables communication forms far more sophisticated than the somewhat limiting ASCII text of an email, including graphics, images, specialized font styles and colors, audio, video, and real-time interactivity. A communications system with such claims would seem hard to knock - or would it?

The very element, ease of publication, that makes the Web so useful to so many people also leads many down a problem plagued path. Simply because the process of Web publication is technically easy (only requiring a computer with Internet access, a Web browser, and a few software programs available for free through the Internet), does not mean that Web publishing doesn't, or at least should not, require a careful thought and planning. Anyone desiring to publish content to the Internet should step back and consider the enormous communication power they will have at their fingertips. With proper planning the Web can be likened to the scalpel of a skilled surgeon. Without it, the Web is like a bullhorn in the hands of a two-year old.

Outlined below are issues that an organization should consider before publishing their first Web page. The concerns are intended to represent the viewpoints of lawyers, Web developers, and business persons - each having a unique interest in a Web site development project. Note, however, that every project is different and each comes with different issues to address. What works for one may not work for another. Careful planning before taking action should help identify problems likely to arise, so that they may be addressed adequately before it's too late. These issues should not deter a potential content publisher from, at the very least, planning a project. The outline simply notes items to pause over and encourages thought in order to help ensure a Web development project's success.

II. BUSINESS ISSUES

The Internet is cluttered with bad Web sites. Often organizations, in haste, jump online with a Web site simply because they can, or because their competition has. Both motivators doom a site almost from the beginning. Jumping online just because a competitor has done so is silly unless that competitor is able to better serve its customers through the Internet, likely enticing your customers away. And just because you can jump online easily, doesn't mean you should. An organization should only publish online when it makes business sense to do so, not simply because it is technically or economically feasible. Always keep in mind that first impressions only come around once. Consider the opportunity cost of publishing a lackluster or worse Web site which existing or potential customers may view. Important business issues to consider when planning a Web development project are:

A. Determine the communication purpose(s) of the potential Web site and develop for that purpose(s) - marketing, public relations, internal communication, external communication, information archiving, product development, electronic commerce, etc.

B. Consider the potential audience, internal and/or external, for the Web site and determine whether or not they have the technical ability or know-how to use the site as intended.

C. Develop an Inventory List of resources on hand. This essentially breaks down into three categories:

1) Human Resources - who within the organization has the technical ability to implement a Web site project, or who has a least the managerial ability to manage an out-sourced technical developer. Also, who will develop content for the site or track it down from other organization members.

2) Equipment - what hardware, software and connection options does the organization currently have enabling Internet access and Web publishing (development computer, hosting computer/server[often out-sourced], color monitor, modem, phone line[dedicated or not], cable, work station, publishing software, FTP software, graphics software, how-to books, browser client, and email client)

3) Content - what type of content will populate the site and where will it come from. Does the content already exist in another form or location, or does it have to be developed. Is it in hard form (paper or brochure) or soft form (digital on disk).

D. Develop before hand, and all through the life of the Web site, an Inventory List of ideas or projects that may potentially be useful if published on the Web site. This list will help the site owner and/or Web developer plan for future development. It is important to remember that a Web site is a dynamic, ever changing animal. Do not try to publish every idea at once. Set goals, using the Inventory List, and work towards them piece by piece. Give site visitors something to look forward to on each return to the site.

E. Research others on the Internet in similar businesses. Or, determine that no others exist online like your organization and reflect on the potential benefit of being an online pioneer.

F. Formulate objectives and strategies for Internet use. Make a plan and stick to it.

G. Formulate internal Internet use policies for the organization. Encourage exploration and experimentation, but not at the cost of productivity.

H. Determine any security issues that may arise such as what content should not be made available to the public, and whether a firewall (security gate) is needed to protect sensitive data.

I. Determine a budget. This should not be a lump sum number that is going to be cut at the beginning of a project, but a rather an on going budget item since a quality, dynamic site will need frequent maintenance and editing throughout the life of the site.

J. Determine what parts of the project to keep in-house and what to out-source. Often it is far less expensive to out-source initial site development and site hosting, while keeping routine maintenance and editing in-house.

K. Consider how the site is going to be marketed. There are two elements to site marketing:

1) Traditional Marketing - that effort which an organization usually would or could use to promote a new idea or fact about the organization. This could include changing business cards, letterheads, voice mail messages, signs, print advertisements, radio advertisements, television advertisements, cocktail party conversations, notifying trade organizations, etc. The point is to try to hit all of the traditional communication channels that an organization is already accustomed to using.

2) Technical Marketing - that effort a Web developer puts forth to ensure proper placement on an Internet search engine, directory service, Usenet group, or listserv. It also may include instructing the members of an organization how to utilize the Web and email in ways that will help promote the Web site. Technical marketing is one of the most difficult and under valued processes in a Web development project.

L. Determine and stick to an aggressive updating schedule. Some of the most important information that any Web site could contain is also the most time sensitive. Outdated or erroneous information on a Web site is killer. With millions of Web sites to choose from, don't give a site visitor any excuse to leave your site, or, worse yet, deter him or her from returning.

M. Determine the costs and benefits of conducting online electronic commerce. Consider security issues, transaction charges, 24 hour technical help availability, network outages, merchant account availability, online check clearing, fulfillment issues, credit cards to accept, secure server options, shopping cart options, and consumer confidence in online purchasing.

N. Consider the use of, and strength of, encryption technology for sending secure digital information over the Internet. Determine what strength of encryption may legally be exported outside of the U.S.

III. LEGAL ISSUES

There is a host of legal issues to consider before an organization should attempt to venture online, but most important to many online publishers or site owners may be the protection of intellectual property intangibles. The Internet poses new challenges for owners of intangible property due to the widespread accessibility of such properties, and the ease and speed at which these properties can be copied. Also, because the Internet is a global system, a product, service, or business name can easily conflict with another's legitimate and legal use of that name.

Even if the intellectual property issues could be resolved, which government's law does the resolution fall under. Jurisdiction in cyberspace, a place without tangible boundaries, is a nightmare. It is extremely difficult to pinpoint where an online action takes place on the Internet. Similarly, contracting issues arise when parties are trying to determine where the contract is taking place, what action constitutes the mailbox rule, or how to determine and authenticate party identity.

Governments are equally concerned with defining the "where" in the Internet for regulatory and taxing purposes. This is especially so in recent years as electronic commerce has exploded.

Below is a synopsis of some of the most important legal issues organizations, their counsel, and Web developers should consider:

A. Trademarks

1) Consider registering all new domain names, icons, and specialized hypertext link names developed and designed for a Web site.

(a) file service marks and trademarks with state and federal registries

(b) consider filing marks with governments of non-U.S. territories

2) Check domain name availability before registering a service mark or trademark.

(a) determine what authorities currently issue domains (e.g., InterNIC)

(b) determine what Top Level Domains (TLD) are currently available for licensing (e.g., .com, .net, .org, etc.)

(c) determine any domain name licensing policies that deal with conflicts between trademark registration and domain name registration

3) Hypertext linking issues

(a) Determine whether it is permissible to use another's trademark as a hypertext link to the trademark owner's page. The courts have thus far not had an opportunity to rule on this issue. See Ticketmaster v. Microsoft, Civil Action No. 97-3055 (CDCal 1997), settled.

(b) Determine whether "deep links" are permissible. Deep links are hypertext links which link deep into the site of another, bypassing the intended entry page or pages of that particular site, potentially diminishing the value of that site to its owner. See Washington Post v. Total News, 97 Civ. 1190 (SDNY 1997) settled. It appears that where only a textual link is used, and not a trademarked logo, the risk of infringement is low. However, where a trademarked logo is used, the risk of infringement is much higher.

4) META Tags

(a) Consider using META tags (computer code attached to a Web [HTML] page that can not be seen through browser software, but can be read by search engine computers) to increase search engine rankings, but avoid using copyrighted or trademarked content of third parties in the tag. See Playboy Enterprises, Inc. v. Calvin Klein, 985 F.Supp 1220 (NDCal 1997).

(b) Search other sites' META tags for infringement of your organizations copyright or trademark

5) Frames

(a) Pay close attention to the use of HTML frames (coding device which allows a browser to display multiple pages simultaneously through multiple frames in the browser window). Frames can allow a Web site owner to publish original content from their own site along with possibly copyrighted or trademarked content of another's site, raising issues such as unfair competition, misrepresentation, or passing off. . See Washington Post v. Total News, 97 Civ. 1190 (SDNY 1997) settled.

(b) Search other sites for infringement of your organizations copyright or trademark through the use of frames.

B. Patents

1) Consider design patents on non-functional format and design of a Web site

2) Consider design patents on Uniform Resource Locators (URL) selection and placement

C. Trade Secrets

1) Consider security issues that may help hide back-end computer programming that an organization may have developed, but is keeping secret.

D. Copyrights

1) Determine Web site ownership - If developed in-house, the copyright remains with the organization. If developed outside of the organization, the copyright remains with the author, the outside developer, unless specifically noted in the development contract that the project is a work for hire. If the outside developer indeed does own the copyright, consider an assignment, in writing, of the copyright.

2) Determine content ownership - It is safest to use all original content when building a site. Therefore, no existing copyright will be infringed. However, if third-party content is needed, determine who holds the copyright and how permission to use the content can be obtained.

3) Determine what "fair use" issues may arise if small portions of third party content are needed.

4) Edit existing contracts to make sure that "electronic media" is covered.

5) Although not required to protect copyright interests in the Web site, mark all pages with a copyright notice, such as © Sitesurfer Publishing LLC, 1999, and make the notice a hyperlink to a Copyright Notice and Permissions page. This will put visitors on notice that the organization is serious about protectint its copyrights and will deter a defense of innocent infringement. The Copyright Notice and Permissions page can explain to visitors how they may obtain permission to use copyrighted material.

6) Consider embedding digital fingerprints or watermarks in digital graphics. This serves evidentiary purposes in determining whether or not a third party did indeed infringe a copyright. It also allows a potential user of a copyrighted work to easily find and contact the copyright holder to gain permission for use.

E. Jurisdiction

1) Determine how passive or active the commercial activity of the Web site will be. It is far more difficult for a foreign court to assert jurisdiction over an organization that is only passively displaying information to citizens of that foreign jurisdiction. However, it becomes much less difficult for a foreign court to assert jurisdiction over the "active" commercial activity of an organization not located physically in its jurisdiction. Courts across the United States and abroad have ruled with varying results.

2) Consider using a click-through Web Site Users Agreement where by a potential user of the organization's Web site has the option of contractually choosing specified choice of law and choice of venue options before conducting any activity on the organization's Web site.

F. Privacy Issues

1) Determine any legal issues which may arise from the capture, use, or sale of captured visitor information. Visitor information may be captured by 1) the Web server access logs of the site owner, 2) by software cookies(small software programs that can be placed on a visitor's computer, which in turn will gather and send back detailed information to the Web site owner about the visitor's software or hardware configurations, or their travel habits on the Internet), 3) by online submission forms, or 4) by email submissions. Note that an important business issue arises here. Even if the site owner can legally capture, use, or sell visitor information, does it make good business sense to do so?

G. Regulatory issues

1) Consider the regulatory laws that apply to your physical place of business. Those same laws apply to your business over the Internet. However, site owners are left to deal with the issue of where the business is actually taking place. Also, what may be legal in the jurisdiction of your business, may be illegal where your Web site reaches. Pay special attention to contests and gambling activities.

H. Contract issues

1) Consider digital signature technology that attempts to authenticate the source of an electronic transmission. Are third-party authentication services available? See Digital Signature Guidelines: Legal Infrastructure for Certification Authorities and Secure Electronic Commerce, American Bar Association, Information Security Committee, Science and Technology Section (Aug. 1, 1996).

2) Consider what constitutes a signed writing. Courts, again, seem to be up in the air on this issue in the context of electronic communications on the Internet.

3) Consider the issues associated with "shrink-wrap" licenses, and how proposed Article 2B may frame digital information issues into the Uniform Commercial Code. Article 2B also proposes to redefine the "mail box" rule for online transactions (making receipt, not dispatch the rule) for two reasons. First, online transmissions have a higher probability of not reaching the intended receiver, due to technical issues, than does traditional postal mail. And second, successful transmissions of electronic communications are received almost instantaneously by the intended receiver.

4) Consider the use and placement of Web Site User Agreements. Courts are more apt to hold a Web Site Use Agreement binding if 1) it is written in plain language, 2) follows generally accepted contract principles, and 3) is placed prominently on the site so that it can easily be found upon a visitors entry. Keep in mind that visitors do not always enter a site through the intended "home" page, but could potentially enter at any page of the site.

I. Liability Issues

1) Determine what liability the Web site owner may have for sending unsolicited email (spam) to individuals in given jurisdictions.

2) Consider defamation issues.

3) Consider content accuracy liability.

4) Consider Y2K issues.

J. Taxation

1) Determine the level of business activity that a particular state or government may consider adequate for their taxing system to apply. If the taxing system does apply, how is the tax determined.

2) Consider how sold or licensed intellectual property intangibles are to be valued for the purpose of determining sales or income tax.

IV. CONCLUSION

The issues above are in no way exhaustive, but rather primers for thought. Simply being aware of the many issues that may arise in a Web development project can help suppress anything from misunderstandings to full fledged court battles. It is important, though, to remember that Internet technology is advancing so quickly that the law is not likely to catch up. Preparation, flexibility, creativity, and an ear to the railroad track are the keys to serving and protecting the interests of organizations, counsel, and developers.

Sitesurfer Publishing is an award-winning Internet development and electronic publishing agency serving regional, national, and international clientele. For more information, contact William Shaw at info@sitesurfer.com or at 321.574.5004.

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