Computer & Internet Law

Computer and internet law encompasses multiple issues. Some of those issues include online contracting, privacy, website development agreements, mail and internet usage policies, and domain name disputes. Many other types of law fall under the umbrella of computer and internet law; these are just some of the issues.

1. Software License and End User License Agreements (EULAs)

A software license is a contract that authorizes a licensee to make use of software or a website according to the terms set forth in the license. Read more at IP Licensing.

2. Terms and Conditions Agreement

Businesses that license or sell products or services on the Internet should consider using a click-wrap agreement or a browse-wrap agreement on their website. These agreements can help protect against unfair and fraudulent practices, credit card fraud, trademark and copyright infringement, and lawsuits.

A click-wrap agreement is typically a contract for the license, purchase or use of products or services offered through an online seller. The online purchaser must agree to the terms of the contract by “clicking” (usually an icon labeled “I accept,” “I agree” or “I wish to continue”) before he or she can complete the transaction. Browse-wrap agreements differ from click-wrap agreements in that the purchaser is not required to actually click on a link before completing the purchase. In a browse-wrap agreement, the online purchaser “agrees” to the terms of the contract by “browsing” the website. The terms are usually included on a link entitled something like: “Terms,” “Terms and Conditions” or “Conditions of Service.”

The following basic points are useful to consider in click-wrap and browse-wrap agreements.

  • The agreement should clearly notify the purchaser at the time of purchase that the transaction is subject to the agreement. The purchaser should know that she is entering into a binding legal contract.
  • The agreement should include a conspicuous warning that describes the conduct that will denote acceptance. For example, if a purchaser must agree by clicking on an icon before completing the transaction, the agreement should clearly state this requirement.
  • The agreement must comply with all relevant laws and regulations, including consumer protection, electronic commerce and privacy laws.
  • The website should provide a method for the user to review purchase information and correct any errors.
  • The agreement should be drafted so that the nature and terms of the agreement can be easily understood. If the agreement contains terms that are uncommon in an industry or likely to surprise or affect the decision of the purchaser, the agreement should highlight those terms. Many businesses put such terms in all capital letters or a larger font size.
  • The website must give reasonable notice of the click-wrap or browse-wrap agreement. The terms should be easily accessible.

3. Privacy

Many times online sellers have access to private consumer data. Visitors to the website expect this data to be kept private. Failure to respect consumer privacy can result in diminished confidence in the web-based business. Legal liability is also a paramount concern.

If a website collects information about its visitors, the home page should display a link to a clearly understandable privacy policy. The privacy policy should at least specify the following:

  • the consumer information to be collected by the website
  • the manner in which this information will be used
  • the manner in which this information will be kept secure
  • the circumstances in which the information will be disclosed

Although some users may not bother to read the policy, many Internet consumers do read privacy policies before entering into web-based transactions. The best approach is to be proactive when dealing with privacy. Consumers are more likely to trust the business behind the website. We will continue to see lawsuits filed against companies that compromise the privacy of consumer data.

4. Website Development Agreements

Many companies do not have the capabilities, resources or desire to produce a website. As a result, they must rely on independent website developers.

The company should first develop a clear vision of what the website will do. Does the company merely wish to use the website for advertising? Or does the company want consumers to order products or services through the website by using a credit card or other form of electronic payment? Will the company handle the online transactions, or will a third-party or the developer be responsible for the transactions? The answers to these questions will shape the agreement between the company and the website developer.

A website development agreement should address:

  • Services. The agreement should describe the scope of services that the developer will provide. The company may want detailed schedules that describe the work to be done and the time frame for delivery.
  • Cost. The project could be billed hourly or by the task.
  • Technical considerations. Many companies want a website, but they are not aware of what technology is available. A company could negotiate to have the developer use the most up-to-date, commercially available technology. The company should clearly specify the functions to be included on the website.
  • Advertising and promotion. The agreement may provide that the developer will promote the website, place advertising on the website, or both. Many people use search engines to find websites, and the agreement could obligate the developer to list the website with search engines. The website developer may want to include an acknowledgement on the website to highlight its work.
  • Editorial and artistic control. The company should retain control of the website content. The company should have the right to inspect and approve the content and any changes or updates.
  • Intellectual property ownership and protection. The agreement should specify who will own the website content.
  • Hosting services. Some website developers possess the capability to host the website. If so, the agreement should set forth the terms of the hosting arrangement.
  • Updates and new features. Companies often wish to change the functions and features available on their websites. The website developer may wish to update the website. If the website developer will retain responsibility for updates and modifications, the agreement should set forth payment terms and schedules appropriate to the circumstances.

These are just a few of the terms your company may want to include in the website development agreement. Ultimately, the agreement should be tailored to the company’s specific needs and preferences and anticipate the issues that may arise during the life of the website.

5. E-mail and Internet Usage Policies

Many businesses need clear e-mail and Internet usage policies. The contents of such a policy will vary based upon the nature of the business. The policy should address a variety of activities including: use of e-mail, voice mail, fax machines, Internet and intranet access, bulletin board systems, chat rooms, Usenet newsgroups and electronic mailing lists and all other company communications equipment. The policy should prohibit obscenity, sexually explicit messages, pornography, threats, intimidation, libel, slander, harassment and discrimination of any kind, offensive humor and stories, chain e-mails, spam and any activity in violation of applicable law, privacy and intellectual property rights.

The policy must be communicated to the employees. The policy should be in writing and printed in employee handbooks and manuals. Discussion of the policy should be included in any new employee orientation. Consider posting the policy on the company server. The company should require each employee to sign an acknowledgement that he has received, read and understood the policy. The employee should acknowledge his agreement to comply with all terms and conditions of the policy. The employee should acknowledge and consent to the company’s right to monitor electronic communications. The acknowledgement should state that violations of the policy are subject to disciplinary action.

An e-mail and Internet policy may not, and probably will not, completely eradicate unauthorized activities. Unless a business eliminates employee access to these applications, there is likely to be some abuse, but an e-mail and Internet policy can help curb it. A business should review its policy periodically to ensure that it conforms to emerging technologies and new legal requirements. Consistent employee education and enforcement of the policy will contribute to its effectiveness. Monitoring can help ensure compliance. Any violation and appropriate discipline should be clearly documented.

6. Domain Name Disputes

Domain names and addresses on the Internet are registered on a first-come, first-serve basis. The domain name registration services do not inquire into the motivation of the person or entity electing to register the domain name. As a result, some individuals with unsavory motives, known as cybersquatters, can register domain names.

The Anti-Cybersquatting Consumer Protection Act, or ACPA, was adopted to address the problems caused by cybersquatters. Under ACPA, a person or entity can bring suit in federal court against anyone who in bad faith registers or uses a domain name that is identical or confusingly similar to a distinctive trademark.

ACPA gives the court broad powers to deal with cybersquatters. The court has the power to cancel the domain name registration. The court could also transfer the domain name to the injured party. The injured party may be able to recover statutory damages ranging from $1,000 to $100,000 per domain name.

Because litigation can be expensive and time-consuming, many trademark owners take advantage of an alternative procedure for resolving domain name disputes, which is more streamlined. The Internet Corporation for Assigned Names and Numbers (ICANN) is the policy-making body that oversees domain name registries. In 1999, ICANN adopted a Uniform Domain Name Dispute Resolution Policy (UDRP). All parties that register domain names must consent to UDRP. When a registrant registers a domain name, the registrant warrants that the domain name does not infringe upon or violate the rights of any third party and that the domain name was not registered for an unlawful purpose.

Under UDRP, all registrants agree to submit to an administrative proceeding to determine the status of the domain name if a complaint is filed. The complaining party must prove all of the following:

  • the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
  • the holder of the domain name has no right or legitimate interest in the domain name; and
  • the holder of the domain name is using the name in bad faith.

There are no hard and fast rules for determining bad faith. Bad faith is likely to be found if the domain name was registered for the sole purpose of selling the domain name to the trademark owner or to prevent the trademark owner from using its trademark in its own domain name. Proof of bad faith can also be demonstrated where the domain name is registered primarily to disrupt a competitor’s business or to unfairly divert Internet users from the trademark owner’s website.

The holder of the domain name can retain the name by showing rights or a legitimate interest in the name. If the holder was commonly known by the domain name before the dispute, or the holder uses the name for a noncommercial purpose, the holder may prevail.

UDRP provides an exclusive remedy, which is to transfer the domain name to the complainant or to cancel the domain name registration. UDRP is designed to be a cost-effective and efficient alternative to litigation. Disputes are typically resolved within 45 days after filing the complaint. If the trademark owner seeks a limited remedy in a short amount of time, UDRP can be an effective tool to combat troublesome domain name registrations.

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