This is an extended version of an article originally published in the IEE Consultants' Management Group Newsletter, Issue 8
© 2000 C J Coffin
The immediacy and all-pervasiveness of the Internet mean that your web-site can be a shop-window visible to billions of potential customers. But does it also mean you are prey to cybersquatters, intellectual property thieves and malicious litigants in far-away places? Read on for a few of the things you need to think about...
Copyright
The design and content of websites are both protected by copyright, so be careful about 'borrowing' interesting-looking material, even .gif files or JavaScripts. Without a licence you can only copy material for the purposes of bona fide research, comment or criticism, or for reporting current events. Even so-called 'freeware' still belongs to someone, it is just that they have chosen to license it on terms that make it available for free (usually on condition that you do not alter it or re-sell it for profit). Note that in order to use the defence of 'fair dealing' for the purpose of criticism or review or reporting current events which is enshrined in the Copyright, Designs and Patents Act 1988, the work quoted and its author must be given 'sufficient acknowledgement'.
In the UK, any work of 'literary or artistic merit' (a definition which includes software!) is automatically protected by copyright, and belongs to the author unless assigned to someone else, either expressly (e.g. by a commercial contract) or by implication (e.g. through a contract of employment). In the US however, it is necessary for authors to 'assert' their copyright by using the usual © symbol ('& c o p y ;' in html) and the date; this is a wise precaution for everyone since of course web-sites are accessible from outside the UK [ .Net magazine, March 2000 p.135].
Libel
There have already been a number of cases concerning e-libel. In 1997 Norwich Union had to pay £450k when a competitor successfully claimed that comments circulating on its internal e-mail system were defamatory. Earlier this year, Demon Internet agreed to pay physicist Lawrence Godfrey damages and costs amounting to £250k, having taken no action to remove a 'squalid, obscene and defamatory' statement from its news server after he had complained about it. In contrast, last December the New York State Court of Appeals dismissed a defamation law suit brought against the ISP Prodigy Services, on the basis that, under US law, an ISP is merely a conduit for information and not a publisher. However, the Court did not rule on whether an ISP is immune from liability even after it has received notice of a defamatory posting. So for once the situation in the US is perhaps the more favourable - but the message seems to be clear, you or your clients need to have a clear policies covering use of email (and misuse - there have also been several sexual harrassment cases), and at the very least take prompt action if undesirable material is posted on web-sites, newsgroups or e-mail systems under your control.
E-commerce and contracts between buyer and seller
When and where is a contract entered into on the Internet? Under English law, contracts can certainly be formed on line, but with the parties perhaps in different countries there is now a need to define exactly when and where offer and acceptance have taken place. In the absence (yet) of any specific legislation it is wise to specify both these points in the 'small print'. Bear in mind in the light of the Argos 'TVs for £2-99' affair that acceptance might occasionally take place sooner than the vendor would like - perhaps a clause covering 'manifest errors' would be a worthwhile safeguard.
Just as in consultancy 'Ts and Cs', the commercial imperative for making acceptance a painless experience is at odds with the need for a watertight contract. Ideally the customer will have to 'click through' a legal terms page before the deal is finalised, if only to ensure that the contract is subject to English law and the jurisdiction of English courts. Unfortunately these same courts have the discretion (under general consumer legislation and, for business-to-business contracts, under the Unfair Contact Terms Act 1977) to set aside your finely-honed contract terms if they are deemed to be unfair or were not brought adequately to the other party's attention.
Cybersquatting
This is perhaps becoming less of a problem than it once was, as in both the United States and the UK specific measures are in place to discourage people registering domain names in which they have no legitimate interest - though not before BT reportedly paid a hefty sum to acquire the rights to vio.com for its Vio joint venture with Israeli graphic arts firm Scitex. ICANN (the Internet Corporation for Assigned Names and Numbers) now have a policy involving two tests - 'legitimate interest' in the domain name, and use 'in bad faith'; the World Intellectual Property Organisation has a mediation and arbitration panel which applies the ICANN tests [for a case involving the World Wrestling Federation see the Financial Times, 31 January 2000]. In the UK, Nominet also have a dispute resolution service for cases involving the use of domain names. Using these procedures the author Jeanette Winterson has just succeeded in wresting control of jeanettewinterson.com, .net and .org back from a cybersquatter who was demanding a fee of 3 per cent of her gross earnings [The Times, 27 May 2000].
A domain name can be an important intangible asset, and particularly if it is unrelated to your name (or the name of your company) you may have no intrinsic right to it and it would be wise also to register it as a Trade Mark for added protection. Fortunately the old tort of 'passing off' is just as relevant to the modern world - Companies House are apparently still pondering whether the names S@insbury and M@rks & Spencers are 'too like' their more familiar counterparts to allow someone else to register them [The Times, 11 March 2000].
Conclusion
In a short feature it is only possible to scratch the surface of the legal pitfalls awaiting the burgeoning e-business (or, worse, its consultants!), and these few paragraphs certainly do not constitute watertight legal advice. The picture is liable to change quite rapidly (not least because of the impending E-Commerce Bill), and if you want to know more about specific issues you would be wise to consult a law firm that specialises in intellectual property and e-commerce.
I am pleased to acknowledge the help of Adam Taylor of Withers and Ian Penman of DLA (formerly Dibb Lupton Allsop) in the preparation of this article.
Chris Coffin MA MBA FIEE
Richmond Management Services Ltd
Useful sites:
World Intellectual Property Organisation www.wipo.org
Nominet www.nominet.org.uk
Some UK legal firms specialising in IT/ internet law and intellectual property:
Withers www.withers.co.uk
DLA (formerly Dibb Lupton Allsop) www.dla-law.co.uk
Tarlo Lyons www.tarlo-lyons.com
Copyright © 2000 Richmond Management Services Ltd
Last updated 20 July 2000