October 15, 1997

BUILDING A WEB SITE? DON YOUR LEGAL HARDHAT

Edited by Dennis Berman

It's finally time for your company to build a site on the World Wide Web. Whether you call that site a homepage, storefront, or Web environment, it will likely contain a collection of text, graphics, multimedia materials, and possibly computer software. Most businesses will not create these materials alone but will hire a consultant or agency (or ask their existing advertising agency) to assist in building and maintaining the Web site.

Even though contractors will handle much of the site-building gruntwork, a company should keep a close watch over the this construction. In particular, a new Web site raises a number of crucial legal issues, three of which are addressed here.

Site Ownership: This is often the most contentious issue of the wired world, but it need not be. Web presences are made up of many different elements, which may have been contributed by you, the developer, or a third party. Keep in mind that when you hire a contractor (as opposed to an employee), you don't automatically own the copyright for the text, graphics, and computer programming the developer creates for you. Transferring this ownership requires a written contract under the law.

Moreover, to protect its ability to do business in the future, the developer may stake a claim to its proprietary programming or creative techniques. A good contract will therefore spell out which elements are to be owned outright by you, and which (if any) are owned by the contractor or a third-party developer. That material may then be licensed to you only for a specified purpose. If you do receive a license, make sure it's broad enough to cover all the ways you anticipate using the material because it's hard to negotiate more rights after a contract has already been signed.

Regardless of how cordially you and your developer work together, at some point the arrangement will terminate, and each of you will have to move on. Before you can do that, however, you will need to make sure you have the right to continue using (and ability to troubleshoot and modify) any proprietary materials included by the developer and licensed to you. Make sure your license to the materials extends past the termination of the contract. Remember, you may also need access to technical documentation or more detailed program elements after the end of the relationship.

Content Review: Any company, from the smallest sole proprietorship to the largest public company, has things it should not, or may not, say in public communications. A Web site is among the most public of communications, particularly since the publisher has little or no control over who in the world will see it. It is crucial then, that all content on the Web site be reviewed regularly by someone aware of both business and regulatory requirements. Failure to do so can be costly. In November, 1995, Virgin Atlantic Airlines was fined $14,000 by the U.S. Transportation Dept. because certain fare information on Virgin's Web site was inaccurate. (Keep in mind, too, that communicating with, and advertising to, children has additional legal and public-image ramifications that should not be overlooked. See "Related Web Links" below.)

Chats and Message Boards: Choosing to allow users to chat or post messages on your site is not a simple decision, because it puts others in control of information going out to the world under your name. While chat can be a wonderful way to build repeat traffic and interact with your customers, it can also open your company to potentially damaging lawsuits or, at the very least, cause embarrassment. For example, while Sony designed the Batman Forever movie site for kids, its discussion group quickly filled with messages titled "Nicole Kidman is Fantastic and Hot!!" and more explicit material.

Legally, your responsibility for your site's contents depends on how much editorial control you can and do exercise. If a judge finds you always edit messages, you may be held directly accountable for what gets published. Online service Prodigy, for example, was sued for libel by the Stratton Oakmont brokerage firm after a user made disparaging statements about Stratton Oakmont on the Prodigy Money Talk bulletin board in October, 1994. Because Prodigy ran a "dirty words" filter and had other editorial policies, the judge found that it could potentially be responsible for the user's posting (although the case was later settled).

That said, you should not leave all user musings untouched. Both good business sense and certain criminal laws require you to take action in specifically egregious situations, such as the posting of child pornography or an infringement of intellectual property. The best (though not guaranteed) approach is to warn users that the public message areas are not under your control and are accessed at their own risks. Also, reserve your right -- without obligation -- to edit or remove postings.

The questions of ownership, content review, and chat liability are best addressed through a combination of good contracts, internal procedures, and thoughtful site design. The contracts should clearly set forth each party's responsibilities and provide for ownership that makes economic and practical sense, realistic required delivery dates, and orderly termination of the relationship. The procedures and the design should include regular and ongoing review of content by knowledgeable people, provide plain-language disclaimers stating the intended audience and limits on the owner's responsibility for the site's contents, and allow for fast and simple updates when problems do arise. And remember, others are going through this too. Don't be afraid to seek out industry colleagues who may have faced (and may have answers for) these questions and the other legal concerns.

Related Web Links: The Better Business Bureau's CARU (Child Advertising Review Unit) Guidelines can be found at http://www.bbb.org/advertising/caruguid.html. For more information on the Prodigy suit, visit http://www.lawtrek.com/articles/prodigy.htm

By Jonathan I. Ezor in New York

Ezor(jezor@ny.poppe.com) is the director of legal affairs for Poppe Tyson Inc., a multinational interactive and traditional advertising and marketing agency based in New York City. His work focuses on Internet and traditional advertising and marketing as well as copyright and trademark issues. The opinions expressed here do not necessarily reflect those of Poppe Tyson or its affiliates.