So, You Want to Have an E-Commerce Site?


Many businesses sell goods or book services online. Others promote themselves and connect with potential customers online, via a website or social media.

All of these activities loosely fall into "e-commerce."

E-commerce businesses confront many of the same issues as a traditional "brick and mortar" business, but they also face legal issues specific to electronic transactions.

Ignoring e-commerce legal issues could result in financial liability, regulatory penalties, or infringement of company intellectual property.

Here are some issues to consider:

Company Name/Product Name/Domain Name: If your first choice of a domain name would require creative use of a hyphen, spelling, geographic tag, or a non-.com ending, you might have a trademark problem. You might not. Be very careful which site hosts your domain and where you search for availability. Some sites collect these searches and sell them, causing someone to snap up your name before you are ready to go. Trademarks are complex, with rights given by use, state governments or the federal government. Don't be afraid to consult legal help at this stage, as well as marketing help.

Works Made For Hire: Companies often assume if they pay for work to be done, they automatically own the work product. This is very seldom the case, so it is important to have an agreement with services providers such as website developers, website hosts, graphic artists and photographers that spell out who owns the intellectual property, information security and confidentiality, and search engine optimization practices.

Online Contracts: Traditional contract principles apply to online transactions. In addition to making sure a valid contract is formed, it is important to specify that your state's law applies, that the contract is entered into in your state, and that the exclusive place for bringing a lawsuit is in your county. You may also consider requiring arbitration instead of litigation.

Online Terms of Use: You should draft online terms and conditions that accurately describes what will happen on your website and how people should behave on your website/social media site. This should be easy to find on your website. It is essential you follow your posted policies every time. Policies may include prohibiting users from posting inappropriate content, warning users what content is from third parties, limiting the company's liability for harm to users resulting from website or web page use, and reserving the rights necessary to maintain website or web page security.

Rights of Privacy: Privacy laws, including laws designed to protect medical records, financial information, and information about children or teenagers, apply to online information. Post your carefully drafted privacy policy that accurately explains collection practices for personally identifiable information in accordance with applicable laws at the state and federal levels, and strictly comply with any such policy.

Avoid Copyright Infringement: Just because you CAN right-click does not mean you SHOULD right-click. Assume all content you find on the web is owned by someone else, including photographs, images and information. If you don't create your own content, make sure you have permission to use it, via a license, public domain or free site.

Protect Yourself from Copyright Infringement: If you allow third parties to post on your website or Facebook page, you might be at risk for copyright infringement. The Digital Millennium Copyright Act (DMCA) provides safe harbors for content providers. Have a notice and take down policy in your online terms and conditions. Also, there are technological methods that might stop or slow down others from copying your original content.

Avoid Trademark Infringement: Trademarks are infringed by using brand names or logos that are substantially similar to other people's brand names or logos and that cause confusion for potential customers. You can truthfully advertise your business connection with someone else's brand, and you can truthfully compare and contrast your brand with someone else's.

Rights of Publicity: Many states (not North Carolina) recognize the exclusive right to exploit one's likeness for commercial gain. Be very careful before using a celebrity's picture, name or part of their identity online without permission. Unauthorized celebrity Twitter accounts could be a bad idea, as are using news photos of celebrities without permission.

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