Subscribe to Entrepreneur for $5

Legal Aspects

Protect yourself from lawsuits by paying attention to the legal ramifications of having a Web site: your logo, brand, privacy policy and more.

Opinions expressed by Entrepreneur contributors are their own.

Covering your legal bases is one of the most important things to do for your e-business. If you don't pay enough attention to all the various legal aspects of your Web business, you could end up finding yourself in engaged in litigation or even losing your most valuable assets, such as your logo, brand name or even the site itself.

Doing business on the Web is fundamentally different from setting up shop in the real world, in that on the Web, all the assets you purchase, create, own and operate to generate business and revenue consist of intellectual property rights-such as copyrights, trademarks, patents and trade secrets," says Jerry Spiegel, a member of Frankfurt, Garbus, Klein & Selz in New York City. As a result, you will have to align yourself with a reputable lawyer, preferably one that understands intellectual property rights and the Internet.

Use your contacts to find a one that's right for you, or try , a Web site that not only offers names of law firms (which are organized by region) that specialize in specific issues, but also lawyers that cater to small businesses. You can also retrieve a large amount of legal information on the site, including legal news; a guide for starting and running a small business written by an attorney; and specially selected Web sites, government doc-uments and articles specifically chosen to help you run your e-business.

This tool includes 120 legal business forms and legal guides:




Before meeting with your lawyer, be sure you've registered your domain name and ensured it's not being used by someone else. If it is, under trademark law, that company has superior rights to you, and if it's discovered you're doing business under its name, it can sue you.

When you finally meet with your lawyer for the first time, you'll probably discuss the basics-such as who the founders of your company are and what type of company it will be-and then delve into trademark issues, such as whether you've checked it properly and the importance of protecting it.

You'll hopefully also get into copyright law, patent law, libel law, individual privacy law and trade secret law. Trade secret law is very important for Internet companies that have a new and valuable concept no other company has. According to Spiegel, this law states that "if you make everyone who has access to your ideas agree in writing to a confidentiality agreement that says they will not disclose them or use them themselves, then the law will protect your ideas." The agreement should be drafted in the early stages of start-up and should be signed by all your employees, independent contractors and even investors.

The legalities don't end there. Spiegel also says companies using Web development firms should be aware of ownership issues. Internet merchants need to make sure that they, not the developer working on it, actually "own" their Web site and that they have the right to use, and make any changes to, their sites.

"You don't want to be locked into a developer," warns Spiegel. "Some developers [hold] clients hostage by retaining ownership of the site and not giving the client modifying rights. If this happens, when you decide to change the site, you'll have to ask the developer to make the changes for you, but for a fee."

The truth is, fraud is part of the e-commerce game. " Scram, Scam! " reveals ways to protect yourself from the thieves just waiting for you to let down your guard.

Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines.

Written By

Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at