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Scott Austin Adorno & Zeder, P.A. Scott Austin Adorno & Zeder, P.A. Fifteen Things You Need to Know to Advise Your Clients.

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Presentation on theme: "Scott Austin Adorno & Zeder, P.A. Scott Austin Adorno & Zeder, P.A. Fifteen Things You Need to Know to Advise Your Clients."— Presentation transcript:

1 Scott Austin Adorno & Zeder, P.A. Scott Austin 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. Austin

2 Contact Information: Scott R. Austin Adorno & Zeder, P.A. 700 S. Federal Highway, Ste. 200 Boca Raton, Florida Florida Bar CLE Seminar May 4, 2001 Copyright 2001 Scott R. Austin

3 Negotiating Key Agreements - Overview Site Development and Design Agreements a.Comparative Documents 1)Software Development Agreement 2)Multimedia Development Agreement 3)Independent Contractor Agreement 4)Construction Contract b.Expectations to address 1)Client expectations must match Developer’s for 1)specs, timing, payment, acceptance, ownership, etc. 2)Subjective “dimensions” misalign expectations 3)Set clear goals; maximize objective standards 4)Frequent communications using clear channels 5)Risk allocation; developer e/o insurance Copyright 2001 Scott R. Austin

4 Negotiating Key Agreements - Overview 2.Hosting Agreements a.Comparative Documents 1)Outsourcing Agreement 2)Lease Agreement b.Expectations to address 1)Service expectations, e.g., maintenance, site availability 2)Content updates 3)Security requirements 4)Performance standards: response time and throughput 5)Search engine/directory registration 6)Platform compatibility 7)Logs of traffic data and network metrics 8)Customer support 9)Host insurance for operations Copyright 2001 Scott R. Austin

5 A. Key Provisions 1.Scope of services: components & deliverables 2.Stages of development 3.Payment 4.I/P Ownership: Who owns content? 5.I/P Ownership: Who owns the completed site? 6.Usage data 7.Termination/Transfer contingencies 8.Warranties and disclaimers 9.Indemnification provisions 10.Insurance coverage Copyright 2001 Scott R. Austin

6 A. Key Provisions 1.Scope of services a.Site components 1)Domain name/URL 2)Business model: B2B v. B2C 3)Interactivity 4)E-commerce b.Functional Specifications - Owner 1)Site features and functions 2)Design format, storyboards 3)Look & feel, navigation 4)Access speed 5)Browser compatibility 6)OS compatibility 7)PDA/phone versions Copyright 2001 Scott R. Austin

7 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 Copyright 2001 Scott R. Austin

8 A. Key Provisions 2.Stages of Development a.Competing “schedules” 1)Owner wants content accurate/complete (but running ASAP) 2)Developer wants to complete the job and get paid ASAP 3)Lawyer must reconcile: put dangers of rushing into uncertainty (e.g. litigation) into perspective b.Attached Schedules – Payment and deliverables timeline 1)Use MIS expert assistance to create 2)Realistic deadlines 3)Establish party representatives for communication 4)Page design layouts 5)Content organization/text Copyright 2001 Scott R. Austin

9 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 Copyright 2001 Scott R. Austin

10 A. Key Provisions 3.Payment a.Tied to progress milestones b.Coordinate with development schedule c.Developer prefers time and materials; maintenance/changes Copyright 2001 Scott R. Austin

11 A. Key Provisions 4.I/P ownership: Who owns content? 4.Owner created 5.Third party licensed to Owner 6.Developer created 7.Third party licensed to Developer 5.I/P Ownership: Who owns the completed site? 4.Believe it or not it gets left out – exclusive ownership 5.Provide for move or be held hostage 6.Developer pre-site rights; subject to owner rights 7.Cross licensing 8.Residuals clause? 9.Developer coordinates initial and other transfers with site host 10.Site must function per specs for browsers and platforms spec’d for site host Copyright 2001 Scott R. Austin

12 A. Key Provisions 6.Usage Data a.Developer provides reports b.Confidentiality 7.Termination/transfer contingencies Copyright 2001 Scott R. Austin

13 A. Key Provisions 8.Warranties and Disclaimers: Warranties a.Developer 1)Non-infringing/non-defamatory 2)Validity of licenses/releases 3)Compliance with law 4)Compliance with specs/unique design 5)No third party obligations/advertising 6)No viruses or disabling software 7)Authority 8)Free of defects (“Developer lite”) b.Owner 1)Non-infringing/non-defamatory 2)Authority 3)No third party obligations Copyright 2001 Scott R. Austin

14 A. Key Provisions 8.Warranties and Disclaimers: Disclaimers a.Implied warranties b.Merchantability and FFPP c.Content accuracy/completeness 9.Indemnification Provisions a.Claims based on breach b.Claims based on willful misconduct c.Claims based on infringement 10.Insurance Copyright 2001 Scott R. Austin

15 B. I/P Rights and Content Control 1.Content Dangers - Copyright Infringement a.All media is expression; unless content is public domain copyright must be dealt with b.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 site e.Developer supplied content must be subject to user/owner approval f.Requires cooperation of parties to determine acceptability and limitations of content Copyright 2001 Scott R. Austin

16 B. I/P Rights and Content Control 2.Developer indemnifies owner for a. All third party content supplied by Developer b.All third party software used to provide search engines, applets c.Any claim for failure to adequately license use of copyrighted materials 3.Privacy and Trademark issues must also be considered a. Photos, logos, or other brand names possibly used at the site b.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) Copyright 2001 Scott R. Austin

17 B. I/P Rights and Content Control 7.Require transfer or license to the site owner/publisher 8.Carefully document site content for subsequent battles 9.Completed site represents “multiple owners of various content rights” a.Owner should obtain assignment from developer of copyright b.Compilation of the components is a copyrightable collective work c.Insures copyright infringement protection against a copy-cat site 1)By Developer 2)By third party Copyright 2001 Scott R. Austin

18 B. I/P Rights and Content Control 10.Who Owns What? a.Owner should own the “site” 1) domain name 2) substantially all content unless licensed from third parties, developer or host b.Owner should own site user data c.Developer may provide reports and license aggregate user information d.Developer owns content provided by developer or proprietary software licensed to Owner e.Host owns hardware unless purchased/leased by owner; server software and personnel monitoring site 11.Who fixes? a.Directly related to ownership in most cases b.Finger pointing starts when developer/host blames slow throughput on Owner-provided content (graphics) Copyright 2001 Scott R. Austin

19 B. I/P Rights and Content Control 12.Who keeps at default? a.Owners keeps as much as possible of content, domain name and the rights during transition 1)Establish up front in agreement 2)Require daily backups from developer/host of entire site 3)Check with registrar that Owner = technical, billing and administrative contact for domain name 4)Turnover deadline regardless of whether Owner is in breach b.Developer keeps content provided by Developer or proprietary software licensed to Owner c.Host keeps server hardware unless purchased by Owner d.Host keeps proprietary server software Copyright 2001 Scott R. Austin

20 C. Legends, Click-Wraps and Home Page Disclaimers 1.Legends a.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 Copyright 2001 Scott R. Austin

21 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 Copyright 2001 Scott R. Austin

22 C. Legends, Click-Wraps and Home Page Disclaimers 3.Disclaimers a.Content accuracy b.Information only/no advice c.Chat room special requirements; DMCA safe harbor d.Disclosure of use of user data e.Privacy policy and opt-out provisions f.Downloads of site material; one copy for personal/non- commercial use g.No transfer of I/P rights h.Loss disclaimers, as is, implied warranties disclaimers i.Unique industries: lawyers, political candidates, securities brokers and issuers Copyright 2001 Scott R. Austin

23 D. Linking Agreements 1.The web is a system of links a.Banner advertisements b.URL in 2.Origination site needs destination’s consent to the link 3.The relative bargaining power between the origination and destination site controls 4.Co-branding v. linking agreements: destination site benefits/proposes referral 5.Basic document similar to licensing agreement 6.Destination page has superior bargain power in linking agreements 7.Origination page has superior bargaining power in co- branding agreements Copyright 2001 Scott R. Austin

24 D. Linking Agreements 8.Key provisions a.Clear right to establish hyperlink between origination and destination site b.Form and placement of link on origination site (location, location, location) c.Origination site provides technical specifications/graphics to destination site owner for approval d.Charges to origination site by linking site tied to value of linking site to origination site e.Charges based on a per visitor basis f.Charges may also be a one time charge g.Reverse in co-branding – destination site pays originating site for referral h.Charges/payments 1) may be one time or more 2) keyed to number of visitors referred or revenues Copyright 2001 Scott R. Austin

25 D. Linking Agreements 9.Additional key provisions a.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, 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 Copyright 2001 Scott R. Austin

26 D. Linking Agreements 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 Copyright 2001 Scott R. Austin

27 E. Domain Names and Trademarks - Overview Selection and Assignment: Internet History 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 NSI awarded 5 year contract to provide Internet registration services private contractor subsidized; paid costs plus fixed profit public assigned names without charge September Subsidy ends; NSI begins charging registrants $50/yr. October Internet defined: §Domain name defined in ACPA, 15 U.S.C. § ARIN established to administer/register IP numbers for NSI beginning 3/98 Copyright 2001 Scott R. Austin

28 E. Domain Names and Trademarks - Overview Selection and Assignment: Internet History Department of Commerce issues White Paper to privatize DNS 2 millionth domain name registered by NSI - 5/4/ DoC signs with ICANN to transition DNS from gov to industry DoC extends agreement with NSI to May ICANN begins test of additional registrars of domain names; 98 exist by year end. Copyright 2001 Scott R. Austin

29 E. Domain Names and Trademarks - Overview Selection and Assignment: Internet History VeriSign acquires NSI; 10 MM names registered as of 4/ ICANN selects 6 new gTLDs:.aero,.biz,.coop,.museum,.name,.pro VeriSign tests non-English second level domains but no TLDs; China objects - registries in Chinese its sovereign right 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/ Future issues - ccTLDs; govt run or.tv Corp for Tuvalu Copyright 2001 Scott R. Austin

30 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 See 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 Copyright 2001 Scott R. Austin

31 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? Copyright 2001 Scott R. Austin

32 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 Copyright 2001 Scott R. Austin

33 H. Domain Names and Trademarks - Enforcement/Dispute Resolution Enforcement: Check search engines at registrar sites e.g., (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. Copyright 2001 Scott R. Austin

34 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 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 - (professors) 80% of over 2400 decisions to date favored Complainant (provider) In rem available Copyright 2001 Scott R. Austin

35 H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: ACPA - highlights Adopted November 29, 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. Copyright 2001 Scott R. Austin

36 H. Domain Names and Trademarks - Enforcement/Dispute Resolution Dispute Resolution: ACPA - highlights Damages: $1, ,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 Copyright 2001 Scott R. Austin

37 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 Copyright 2001 Scott R. Austin

38 Contact Information: Scott R. Austin Adorno & Zeder, P.A. 700 S. Federal Highway, Ste. 200 Boca Raton, Florida Florida Bar CLE Seminar May 4, 2001 Copyright 2001 Scott R. Austin


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