Scott Austin [email protected] Adorno & Zeder, P.A. Scott Austin [email protected] Adorno & Zeder, P.A....

Scott Austin Scott Austin [email protected]@adorno.com

Adorno & Zeder, P.A.Adorno & Zeder, P.A.

Scott Austin Scott Austin [email protected]@adorno.com

Adorno & Zeder, P.A.Adorno & Zeder, P.A.

Fifteen Things You Need to Know to Advise Your Clients

About Websites

Florida Bar CLE Seminar May 4, 2001

Copyright 2001 Scott R. AustinCopyright 2001 Scott R. Austin

Contact Information:

Scott R. AustinAdorno & Zeder, P.A.

700 S. Federal Highway, Ste. 200Boca Raton, Florida 33432

[email protected]



Negotiating Key Agreements - Overview

Site Development and Design Agreementsa. Comparative Documents

1) Software Development Agreement2) Multimedia Development Agreement3) Independent Contractor Agreement4) Construction Contract

b. Expectations to address1) Client expectations must match Developer’s for

1) specs, timing, payment, acceptance, ownership, etc.2) Subjective “dimensions” misalign expectations3) Set clear goals; maximize objective standards4) Frequent communications using clear channels5) Risk allocation; developer e/o insurance


Negotiating Key Agreements - Overview

2. Hosting Agreementsa. Comparative Documents

1) Outsourcing Agreement2) Lease Agreement

b. Expectations to address1) Service expectations, e.g., maintenance, site availability2) Content updates3) Security requirements4) Performance standards: response time and throughput5) Search engine/directory registration 6) Platform compatibility7) Logs of traffic data and network metrics8) Customer support9) Host insurance for operations


A. Key Provisions

1. Scope of services: components & deliverables2. Stages of development3. Payment4. I/P Ownership: Who owns content?5. I/P Ownership: Who owns the completed site?6. Usage data7. Termination/Transfer contingencies8. Warranties and disclaimers9. Indemnification provisions10. Insurance coverage


A. Key Provisions

1. Scope of services a. Site components

1) Domain name/URL2) Business model: B2B v. B2C3) Interactivity4) E-commerce

b. Functional Specifications - Owner1) Site features and functions2) Design format, storyboards3) Look & feel, navigation4) Access speed5) Browser compatibility6) OS compatibility7) PDA/phone versions


A. Key Provisions

1. Scope of services (cont.)c. Technical specifications - Developer

d. Deliverables

e. Content conversion

f. Site promotion/registration

g. Security

h. Confidentiality/no unauthorized public release


A. Key Provisions

2. Stages of Developmenta. Competing “schedules”

1) Owner wants content accurate/complete (but running ASAP)2) Developer wants to complete the job and get paid ASAP3) Lawyer must reconcile: put dangers of rushing into

uncertainty (e.g. litigation) into perspectiveb. Attached Schedules – Payment and deliverables timeline

1) Use MIS expert assistance to create2) Realistic deadlines3) Establish party representatives for communication4) Page design layouts5) Content organization/text


A. Key Provisions

2. Stages of Development (cont.)c. Testing/acceptance

1) Set period for testing/acceptance of scheduled deliverables

2) Pro owner v. pro developer distinctions

3) Contingencies for failure and cure period

4) Final acceptance and transition to host server

d. Change orders; limits, cost, signed form

e. TOE

f. Post acceptance updates of content and/or software


A. Key Provisions

3. Paymenta. Tied to progress milestones

b. Coordinate with development schedule

c. Developer prefers time and materials; maintenance/changes


A. Key Provisions

4. I/P ownership: Who owns content?4. Owner created5. Third party licensed to Owner6. Developer created7. Third party licensed to Developer

5. I/P Ownership: Who owns the completed site?4. Believe it or not it gets left out – exclusive ownership5. Provide for move or be held hostage6. Developer pre-site rights; subject to owner rights7. Cross licensing8. Residuals clause?9. Developer coordinates initial and other transfers with site host10. Site must function per specs for browsers and platforms spec’d

for site host


A. Key Provisions

6. Usage Dataa. Developer provides reports

b. Confidentiality

7. Termination/transfer contingencies


A. Key Provisions

8. Warranties and Disclaimers: Warrantiesa. Developer

1) Non-infringing/non-defamatory2) Validity of licenses/releases3) Compliance with law4) Compliance with specs/unique design5) No third party obligations/advertising6) No viruses or disabling software7) Authority8) Free of defects (“Developer lite”)

b. Owner1) Non-infringing/non-defamatory2) Authority 3) No third party obligations


A. Key Provisions

8. Warranties and Disclaimers: Disclaimersa. Implied warrantiesb. Merchantability and FFPPc. Content accuracy/completeness

9. Indemnification Provisionsa. Claims based on breachb. Claims based on willful misconductc. Claims based on infringement

10. Insurance


B. I/P Rights and Content Control

1. Content Dangers - Copyright Infringementa. All media is expression; unless content is public domain

copyright must be dealt withb. Inquire early about developer’s experience with site content

clearances, releases c. Online providers of photographs, audio, video and other media

are readily available d. Specify source of content anticipated to be uploaded to the sitee. Developer supplied content must be subject to user/owner

approvalf. Requires cooperation of parties to determine acceptability and

limitations of content



2. Developer indemnifies owner fora. All third party content supplied by Developerb. All third party software used to provide search engines, appletsc. Any claim for failure to adequately license use of copyrighted materials

3. Privacy and Trademark issues must also be considereda. Photos, logos, or other brand names possibly used at the siteb. Obtain releases of personnel depicted at the site

4. Separate “developer-original” content from “third-party-acquired” content

5. Direct copy of existing Developer “sample” site should be avoided unless cleared

6. Beware of “work made for hire” (employees v. subcontractors)



7. Require transfer or license to the site owner/publisher8. Carefully document site content for subsequent battles9. Completed site represents “multiple owners of various

content rights”a. Owner should obtain assignment from developer of copyrightb. Compilation of the components is a copyrightable collective

workc. Insures copyright infringement protection against a copy-cat

site1) By Developer2) By third party



10. Who Owns What?a. Owner should own the “site”

1) domain name2) substantially all content unless licensed from third parties, developer

or hostb. Owner should own site user datac. Developer may provide reports and license aggregate user informationd. Developer owns content provided by developer or proprietary software

licensed to Ownere. Host owns hardware unless purchased/leased by owner; server software

and personnel monitoring site

11. Who fixes?a. Directly related to ownership in most casesb. Finger pointing starts when developer/host blames slow throughput on

Owner-provided content (graphics)



12. Who keeps at default?a. Owners keeps as much as possible of content, domain name

and the rights during transition1) Establish up front in agreement2) Require daily backups from developer/host of entire site3) Check with registrar that Owner = technical, billing and

administrative contact for domain name4) Turnover deadline regardless of whether Owner is in

breachb. Developer keeps content provided by Developer or proprietary

software licensed to Ownerc. Host keeps server hardware unless purchased by Ownerd. Host keeps proprietary server software


C. Legends, Click-Wraps and Home Page Disclaimers

1. Legendsa. Home page

b. Copyright notice

c. Legal Terms and Conditions link or “jump page”

d. Prohibits entry until read and interactive registration of assent to terms

e. Additional page allows additional terms


C. Legends, Click-Wraps and Home Page Disclaimers 2. Click Wrap Agreements

a. Accept/Decline box

b. Cases upholding enforceability (stronger than “shrink-wrap” cases)

c. Legislation supporting

d. No access unless acceptance and use consistent with terms/conditions


C. Legends, Click-Wraps and Home Page Disclaimers 3. Disclaimers

a. Content accuracyb. Information only/no advicec. Chat room special requirements; DMCA safe harbord. Disclosure of use of user data e. Privacy policy and opt-out provisionsf. Downloads of site material; one copy for personal/non-

commercial useg. No transfer of I/P rightsh. Loss disclaimers, as is, implied warranties disclaimersi. Unique industries: lawyers, political candidates, securities

brokers and issuers


D. Linking Agreements

1. The web is a system of linksa. Banner advertisementsb. URL in e-mail

2. Origination site needs destination’s consent to the link3. The relative bargaining power between the origination

and destination site controls4. Co-branding v. linking agreements: destination site

benefits/proposes referral5. Basic document similar to licensing agreement6. Destination page has superior bargain power in linking

agreements7. Origination page has superior bargaining power in co-

branding agreements



8. Key provisionsa. Clear right to establish hyperlink between origination and

destination siteb. Form and placement of link on origination site (location, location,

location)c. Origination site provides technical specifications/graphics to

destination site owner for approvald. Charges to origination site by linking site tied to value of linking

site to origination sitee. Charges based on a per visitor basisf. Charges may also be a one time chargeg. Reverse in co-branding – destination site pays originating site for

referralh. Charges/payments

1) may be one time or more2) keyed to number of visitors referred or revenues



9. Additional key provisionsa. Term: term of years with evergreen/auto renewal

b. Don't use destination site logo as origination link point

c. Establish level in destination site which link will appear i.e. home page or other Ticket Master v. Microsoft Corp, 97-3055 RAP (C.D. Cal

1999) (deep link to box office information bypasses Ticket Master home page)

d. Placement may reference a number of pages "deep" below home page

e. Set specific location on home page which will not require scrolling



9. Additional key terms (cont.)f. Reference return link

g. Trademark license from destination site to origination site

10. Additional key conditions a. Destination site remains accessible

b. Indemnification of origination site against claims arising due to the link


E. Domain Names and Trademarks - Overview Selection and Assignment: Internet History

1969 - ARPANET; DOD selects gov. sites decentralized net to survive attack

1980’s - NSF NET; NSF selects research sites 1980’s - TCP/IP introduced at CERN develops Internet in Europe and

gives birth to WWW and HTTP in late 1990. 1993 - NSI awarded 5 year contract to provide Internet registration

services private contractor subsidized; paid costs plus fixed profit public assigned names without charge

September 1995 - Subsidy ends; NSI begins charging registrants $50/yr. October 1995 - Internet defined: www.fnc.gov/Internet_res.html

§ Domain name defined in ACPA, 15 U.S.C. §1127 1997 - ARIN established to administer/register IP numbers for NSI

beginning 3/98



1998 - Department of Commerce issues White Paper to privatize DNS 2 millionth domain name registered by NSI - 5/4/98

1998 - DoC signs with ICANN to transition DNS from gov to industry

1999 - DoC extends agreement with NSI to May 2001 1999 - ICANN begins test of additional registrars of

domain names; 98 exist by year end.



2000 - VeriSign acquires NSI; 10 MM names registered as of 4/00

2000 - ICANN selects 6 new gTLDs: .aero, .biz, .coop, .museum, .name, .pro

2000 - VeriSign tests non-English second level domains but no TLDs; China objects - registries in Chinese its sovereign right.

2001 - VeriSign contract extended: 2007 for .com, 2006 for .net and 2002 for .org; and keeps its registrar - as a subsidiary; DoC approval expected 5/14/01

2001 - Future issues - ccTLDs; govt run or .tv Corp for Tuvalu


F. Domain Names and Trademarks - Selection Selection and Assignment: Guidelines

Trademarked names prevail, so search required Generic may provide advantage (e.g. “Sting.com”, cello.com) Shorter is better for marketing Max characters increased from 26 to over 60 Hyphens permitted but not preferred International characters: test phase

See www.verisign-grs.com/idn/keypoints.html See http://chinesedomainservice.com

Old .org, .net requirements removed .edu also changing Personal names also limited (e.g. Julia Roberts) New gTLDs: .aero, .coop, .museum, have qualification requirements Telephone numbers


F. Domain Names and Trademarks - Selection Selection and Assignment: Issues

Buy all the gTLDs for your mark? No right of 1st refusal for .coms Online brand may be different than offline mark Same mark but different classes; what then? Will new gTLDs reduce warehousing, price gouging?

See Bulkregister.com, register.com Pending or common law trademark owners?


G. Domain Names and Trademarks - Assignment Assignment: Issues

For domain name, check registrar site for policies and forms.

For marks, check USPTO site and consult qualified I/P counsel


H. Domain Names and Trademarks - Enforcement/Dispute Resolution Enforcement:

Check search engines at registrar sites e.g., www.networksolutions.com (a VeriSign company!) check for typo-squatters (enter singular/plural,

hyphenated, other variants) if possible infringement detected, check registrar policy

and consider UDRP and ACPA, as well as state and federal unfair comp and dilution options.


H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: UDRP - highlights

Developed under ICANN - adopted August 1999 Applies uniformly to all ICANN .com, .net, .org registrars Quick (goal is resolution within 45 - 60 days - being met) Fees low Panels/Arbitrators come from 3 service providers:

WIPO - 61% of cases (800 arbitrators/67countries) NAF National Arbitration Forum - 31% (former

judges/professors) eResolution - www.eresolutions.ca (professors)

80% of over 2400 decisions to date favored Complainant (provider)

In rem available


H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: ACPA - highlights

Adopted November 29, 1999 - 15 U.S.C. §1125(d) Separate statute for personal name disputes Provides statutory damages and injunctive relief for bad

faith registrations with intent to profit that are: same or confusingly similar to distinctive mark same or c/similar or dilutive of famous mark infringe names of well known charities (e.g. Olympics) bad faith factors include warehousing, gouging, intent

to divert, tarnish, etc.


H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: ACPA - highlights

Damages: $1,000 - 100,000 per offending domain name, at court’s discretion. $100,000 per name - Electronics Boutique v. Zuccarini $ 50,000 p/n - Shields v. Zuccarini $ 25,000 p/n - Gallo $ 10,000 p/n - United Greeks

Injunctive remedies available (transfer name to plaintiff) In rem available (where registry or registrar located) (join

campaign to bring root server to Florida!) and held constitutional (Ceasars World, Heathmount)

Safe harbor for reasonable belief of fair use or otherwise lawful Retroactivity (names registered pre 11/29/99): cases unsettled


H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: Interaction between ACPA -

UDRP UDRP filing does not waive right to file under ACPA No duty to use UDRP before filing under ACPA as

“mitigation” UDRP decision not binding on court Courts have reversed UDRP decisions. Courts have also stayed civil actions pending outcome of

UDRP


Contact Information:

Scott R. AustinAdorno & Zeder, P.A.

700 S. Federal Highway, Ste. 200Boca Raton, Florida 33432

[email protected]



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