by Charu Mathur

Internet Overview
Trademarks n e-defamation
Putting ePresence, IPRs and warranties
eContracting
GlobalVillage
Privacy
 

Internet Overview

Internet is a recent phenomenon. It is so new that most of Internet companies do not recognize the pitfalls that can accompany doing business on-line. Most of us are still learning how to navigate the Internet safely! This article is intended to alert towards legal risks while doing business on net and route to deal with them is timely legal counseling.

Each Website is known to the world by a particular webname or Domain name as it is called, which is actually combination of few numbers call IP address that for our present information is not essential.
First step towards starting an Internet company is registration of the Domain name. Earlier it was only internetnic, which used to provide registration of domain. But today many of them are mushrooming with hidden cost. internetnic charges 70USD for registration for 2 years. Other better registrar is www.registrar.com that charges 60USD for 2 years.

Trademarks

Every company, even those not conducting significant business on-line, should be concerned about harm it may suffer due to the on-line conduct of others. The principal examples include trademark infringement, copyright infringement, defamation, and unauthorized access torts. Trademark risk has changed in the on-line environment. In the area of trademark law legal risks have changed due to the advent of the Internet. There is no such thing as a local or regional trademark on the Internet – the global nature of the Internet means that unregistered trademarks that previously did not conflict due to geographic or industry separation now find themselves in conflict when used on-line, where every web-based advertisement is accessible in every market.

 In contests over desirable domain names – the phrases such as "yahoo.com" that companies use to identify their web sites – unregistered marks are at a distinct disadvantage. In short, the Internet places an increasing premium on registered trademarks, and on unique "strong" marks. It also places a premium on diligence in policing the Internet to uncover infringing uses at the earliest opportunity. Recently our own Indian courts have passed injunctions against cybersquatting against the companies which registered domain names as "tanishq.com","bisleri.com" where they had no relation to the registered real world Trademark. And very recently courts have granted Injunction in favor of"rediff.com" to prevent"radiff.com" to use domain name radiff.com on grounds of deceptively similar. The first step should be to register domain names which do not conflict with real world Trademarks. Now the trends have changed and people really don't pay to purchase the domain names, which they can get from courts.

Another threat to companies is "e-Defamation". Defamation of companies and management on-line is increasing. Companies are also finding themselves under attack from negative web pages, which disparage their products, management, financial condition, employment practices, or other aspects of their business. Such pages frequently divert users from the company’s official page by closely mirroring its domain name or using the target company’s trademark on their own page to fool search engines into pulling up the critical page in response to a search request designed to find the official page.
Disparaging and potentially actionable material is frequently found in investment oriented chatrooms or chat rooms designed around a given industry focus. Many former employee sites have been established specifically for the purpose of airing grievances against former employers. In addition, as with conventional media, the Internet can be a venue for copyright infringement, and misappropriation of famous persons’ name or likeness. "Hacking" or improper access torts are becoming increasingly common.
 
 Putting ePresence

Everybody and anybody has some sort of Internet presence, ranging from developing homepages at tripod.com to paid static web page which is little more than a simple, electronic advertisement to complex web pages which allow a full range of electronic commerce activities to be performed on-line, including communication and contracting with the company’s supply chain, distribution channel, and ultimate consumers. In some ways the process of setting up a web page is easy (tripod is matter of 5 min.).

Then there are Professional web page developers who take care from the entire process from initial concept to final design. In many cases the developer will host the page on its server, handle updates, and arrange for electronic payment and encryption systems. However, such vendors frequently offer standard web page development and hosting agreements, which contain hidden time bombs that can result in substantial legal difficulties down the road. Here again culprit is IPR-Intellectual Property Right. The development agreements should be clear about ownership of intellectual property. The parties may not share the same assumptions as to who will own the intangible property rights in the developed product, including copyright, trademark, patent, and publicity rights. The 'work for Hire' doctrine under copyright law may not be applicable, resulting in the developer retaining full ownership of the copyrights to the work it creates for the other party. A development contract should specify who owns the content that goes into the web page, otherwise conflicts may erupt if the company decides to revise the page or move it to a new host.

Performance specifications and warranties are important features of any development contract. The contract also should specify procedures for acceptance and testing of the finished page. Web hosting agreements also raise concerns. Nobody likes a web site that is down, slow, or otherwise unreliable. A web hosting agreement should specify the level of service the company is paying for. A Company should consider being able to terminate the agreement for failure to maintain the contracted-for service levels.
Often hosting services take care of domain name registration. This is fine so long as the registration is done in the name of the company, or is transferred to the company. Problems may arise where the host owns the name and the company seeks to switch hosting services down the line.

It’s not sufficient merely to have a web site; rather, surfers expect updated information. For this reason, the web host should provide specified tools to enable remote updating through file transfer from the company. Some web hosts will provide updating services. Other companies may opt to have their initial developer provide updates. In any event, a company ought to consider who will provide the updates, and how they will be incorporated into the web site. The hosting agreement should also deal with responsibility for security. Sophisticated software and the use of "cookies" can provide important information about visitors to the site and their use of the site. Visitors may also be asked to provide personal information through registration or in connection with transactions. Such information can be used to further modify a site to better serve its users. Often a company will want to control any information obtained through its web site, however, this information may also be valuable to the hosting service. The hosting agreement should state which party has what rights to information obtained from users.
Finally, a company must be able to move its web site to another host’s server on short notice, especially in the event of a breach of the web hosting agreement. The contract should require the web host to transfer the contents of a site in a medium selected by the company on 24 hours notice. The web host should also be obligated to provide reasonable assistance in effecting the transfer to another server, at least where the termination is not due to a breach by the company.
 
 
 eContracting

The Internet is an ideal environment for contracting, as it is essentially instantaneous and interactive. Contracting on-line can be structured to eliminate ambiguities that can result from the exchange of paper documents in the real world. The so-called "battle of the forms" often results when businesses contract with one another by exchange of pre-printed forms. While those forms will probably agree on basic terms like price, quantity, delivery and the like, they may contain varying boilerplate terms regarding arbitration clauses, forum selection, limitations of warranties, opportunity for cure, and the like. Internet contracting can be set up with only one form – the offeror’s – with acceptance limited to the offered terms. Collateral terms offered in free text can be avoided by providing that acceptance can be indicated in only one manner – by "clicking" or typing "I accept" in a given box. Similarly, the instantaneous nature of the Internet avoids disputes over the timing of offer and acceptance.
A web page is an ideal platform for contracting for other reasons as well. Disputes over whether a purchaser or seller was made aware of certain terms, such as limitations of remedies, can be avoided on-line by structuring the web page in such a manner that the purchaser must view the desired text before proceeding to the execution page. Disputes over the validity of clickwrap licenses can be avoided by careful structuring of the web page.

The need to keep legal disclaimers in their place. Business people do not want their web page cluttered up with legal disclaimers and boilerplate provisions

Digital signature legislation.
The new ecommerce Act, 1999 provides for Digital signatures. We have yet to witness as to how these lawmaking efforts turn out, will they in fact make electronic commerce easier, safer and more reliable?
 
 
 eGlobalVillage

The global nature of cyberspace is its strength but can also pose dangers. A company may only want to reach a small, select audience with its message, but once the company’s web page is posted it will necessarily reach the entire world. This can cause problems when the company’s message is illegal in certain jurisdictions, or when communicated to certain audiences such as minors. Industries traditionally regulated on a geographical basis, such as insurance and securities, need to consider how to avoid making offers or other communications on-line which are unlawful in certain jurisdictions because they have not been pre-approved or filed, or because the entity making the offer or communication is not registered or licensed there.
Perils exist in less regulated industries as well. Regulations regarding subjects such as advertising, defamation, and decency differ substantially in each foreign jurisdiction.

Personal jurisdiction may depend on the interactivity of a web site. In addition, doing business on-line, or even just advertising on a web page, may subject an entity to suit in distant jurisdictions. Parties entering into contracts over the Internet can anticipate this risk and attempt to contract around it with choice of law, choice of forum, or arbitration clauses. But some torts, like defamation or trademark infringement, do not require any transaction to take place to be actionable. The law in this area remains unsettled and continues to evolve. If any trend can be discerned it is that interactive web sites, which invite the viewer to register, provide data or information, and generally enter into an on-line relationship with the web page sponsor, are more likely to support assertion of jurisdiction over a distant web page sponsor than a mere static web page.
 
 
 
 Privacy

Privacy is another area of great concern. There are many websites, Interactive and non-interactive, which collects Data and pass on to various companies for a price. Sometimes data is asked directly where there is a clause that it will be passed to group companies, and sometimes discreetly by cookies etc, or even on Interactive websites and passed to unscrupulous websites end result is harassment to user.

Internet and e-mail policies and the workplace
Employees tend to use electronic mail differently than paper communications such as letters or memorandum in the work place. The popularity of electronic mail largely results from its dual nature of being as efficient and informal as a spoken conversation, while also having the permanence of a written letter or memorandum. Unfortunately, this informality often is accompanied by inappropriateness. Employers need to warn supervisors and employees to use the same care in drafting e-mail messages that they would in drafting a letter or memorandum. Furthermore, companies should be adamant that their electronic mail may be monitored by supervisory personnel. Employees must understand that e-mail frequently lasts longer than messages that are sent to individuals on paper, and is far more easily forwarded to other (unintended) users both within the company and outside the company.

Record keeping and retention
A common use for e-mail or an intranet is to communicate requests for vacation, family leave, training, disability accommodations, promotion or transfer, adjustments in compensation, and even timekeeping. These items are typically considered personnel records and need to be retained. There must be policies to retain records indicating both transmission and receipt of such documents are essential.

Conclusion
The above issues are relevant to all companies doing business on the Internet, and even to those not doing business on net, like they have to protect there trade mark from infringement in cyberspace.
The legal risks posed by the Internet can be managed in ways that do not detract from its attractiveness as a medium in which to do business. As prevention is better than cure, so every CEO, CIO owes it to him or herself to understand those risks and obtain appropriate advice.
 

by: Charu Mathur. Charu is a law student at Government Law College, Bangalore.
 

References:
1.Journal of the Indian Law Institute 1999 Vol. 41 No.1
2. Various web links like:
a. http://ecommerce.internet.com
b. http://www.indiaip.com
c. http://www.marksonline.com
3. All India Reporter Bombay and Delhi 2000
4. Newspapers like Economic Times, Hindustan Times, TOI