More perils from the web

Marcus Handley from the Rights Lawyers on some of the issues to consider before attempting to trade online.

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By  Marcus Handley Published  October 26, 2008

Marcus Handley from the Rights Lawyers explains in the second of a two-part series what issues can arise from running a website.

There are many issues to consider before you should attempt to trade online, some practical, others purely technical, and those that stem from specific legal concerns.

This article attempts at the very least to draw your attention to those questions you should be asking before you open your online ‘shop window'.

What happens to the intellectual property?

We talked about some of the more practical issues last month. However, of primary importance to you might well be the protection of any and all intangible rights.

IP should certainly be high up on your checklist; to cover everything that you put in, anything the developer contributes, and of course, the IP in the new site.

Consider where your interests lie and ensure they are protected, particularly after termination of the relationship. Ask yourself, are you protecting your rights behind the content in the site supplied by you (in particular any confidential information) while still allowing restricted use by the developer for the purpose of building the site?

The developer will inevitably come to the party bringing its own IP. It will want to protect itself but the contract must also ensure that you have access after he completes the job.

The underlying code and the IP behind it must be dealt with in the event that the developer goes out of business, or if you move on to another supplier to maintain and host the site.

What's the best way to deal with this - assignment or perpetual licence? An escrow account to hold the source code until that day comes? Control is the key, but in actual fact, when it comes to these rights, compromise is the best way forward.

Importantly, if your contract fails to specifically address copyright ownership, the developer will automatically own the copyright in your new site and you will have only an implied licence to use the material created by him. This is clearly not the desired objective.

Among other things, a website development agreement should therefore deal with all content, the rights behind it all, who can use what, when, and for how long.

In addition, if the developer uses software owned by others without permission, you may well be liable for infringing the rights of others and using unauthorised material on your website. Make sure all third party rights are dealt with, and the required licence for use (both by you and the developer) are in place.

The why

The web poses extreme challenges for owners of intellectual property. These include:

• The internet is truly a global system, meaning your new website is extremely accessible, and the ease and speed at which anything can be copied or dealt with by a third party can mean infringement is rife.

• It is difficult to know which government's law we fall under, Jurisdiction in cyberspace, by definition a location without tangible boundaries, is impossible to define, and it is therefore very tricky to determine where an online action takes place on the web.

• Your product, service, or business name might easily conflict with another's legitimate and legal use of that name meaning that infringement potential is everywhere.

Even the most efficiently protected website can still face challenges, so always go that extra mile to make it easier right from the start. In order to do this, it is imperative that you ensure you control what you are putting out there and in your name.

Taking care of the above issues will at least put you on the front foot.

Marcus Handley is a solicitor with the Rights Lawyers.

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