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Getting Your Domain Name & Complying With Legal Issues

First, you've got to try to find the best online name for your business. Then it's time to protect your web investment.

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Before you can take your business online, you've got to determine just what your e-business is going to be called. If you're lucky, you can use your existing name. But in many cases, that's not an option. Our tips can help you find a domain name that works for you. Then you'll need to cover your legal bases: creating and posting a privacy policy and terms and conditions, dealing with copyrights and warranties, collecting taxes on online sales and selling internationally. But first things first . . .

11. Determine if your own business name is available to register as a domain name. The first step in choosing a name is obviously to try to register the name of your business with a .com at the end. Unfortunately, this isn't as cut-and-dried as it sounds because all the good names are most likely taken. By the time you read this, the name you want will most likely have been snatched up by someone else.

If the .com version of your name is gone and you can't buy it from the owner--an option you should at least attempt--try .net or .org. Names like .biz, .info and .us are also available but still aren't used as widely. If you're still stuck without a domain at this point, it's time to get creative. Many business owners can get a reasonable facsimile of their name by adding prefixes and suffixes like "e," "i," "cyber," "online," and "the" or using hyphens.

12. To determine what's available, visit a domain name registration site. There are many of them out there. To find the top choices, google the keywords "domain registration." Once your results come up and you've selected a site, the drill is simple: You try a name, and the site should tell you if it's available. When you strike out--that is, when the names you want are taken--the site should provide alternative suggestions (if it doesn't, try another registration site). The best sites also offer brainstorming tools so you can enter keywords and get back possible names that are available for registration. From these choices, you can choose the name that best suits you. The charge to register is running about $25 a year when you register your name for three years.

13. Trademark your online address. Once you've found a name that works for you, you'll want to be sure to protect it. The best way to do that by registering it through the U.S. Patent and Trademark Office (USPTO). Having trademark rights allows you to protect your domain name against others who might allege that it infringes on their trademark and try to have it legally taken from you, and also allows you to enforce your trademark rights against others who use domain names similar to yours to try to divert your customers.

But the trademark office won't register a domain name that doesn't meet the requirements of being a trademark--a domain name by itself is considered merely an address. You can apply for registration of a trademark after you've used the mark to identify products sold or services performed "in commerce," which means you've used it for advertising and/or sale to customers. Trademark registration protects your rights, giving your company a presumption of first use of the mark in association with particular goods or services. For more information, visit the USPTO's site.

14. Activate your domain. No matter what hosting solution you select, the process of activating your domain name is the same. The host will assign your domain name an IP (Internet Protocol) address, which consists of four numbers separated by full stops, log the IP number onto the host's primary and secondary DNS (domain name services) servers and broadcast it to the Internet. The DNS servers will have hostnames and their own IP addresses. This information is required to modify your domain name profile kept by your registrar. Your profile can be modified by either you or your host, and you can provide permission for your host to update your domain name profile. (Once you've selected a host, most of this maintenance will be done for you, and their technicians will take care of updating the DNS servers so your domain name can be resolved through its unique IP address.)

Complying With Legal Issues

Now that your domain name's registered, it's time to get familiar with the legal information you need to know to keep your online business on the right side of the law. The following tips cover some important legal issues and will help keep you out of hot water.

15. Create a privacy policy. If you collect any information from users of your site, by using cookies or other methods, the FTC requires you to have a privacy policy. Your privacy policy should contain an explanation of how you collect users' information, how and where the information is stored, how users can delete or change the information, and to whom the information is disclosed and for what purposes. Be sure your policy includes all this information. If you're not sure exactly what to disclose, you can get great ideas by visiting other sites in your industry to see what their privacy policies include.

16. Post your "terms and conditions" on your site. Having terms and conditions (also known as a user agreement) may be the most important part of a website. A user agreement requires each user to agree to be bound by a contract governing his or her use of the site by clicking "I agree" before being permitted to use the site. Be aware that simply posting your legal agreement without forcing the user to click "I agree" prior to use is unlikely to bind your users to the terms. The user must take an active step through which they agree to the terms and must not be allowed to proceed to use the site without such step. A user agreement allows a company to:

  • dictate how the site may be used (for example, for reading and printing materials)
  • dictate how the site may not be used (for example, reverse engineering the coding tricks or copying content for illegal purposes)
  • dictate who may use the site (for example, persons over the age of 18, U.S. citizens)
  • dictate procedures or policies for the site (for example, return policies, complaint policies, notification of copyright infringement policies)
  • dictate your company's waiver of implied legal warranties (for example, implied warranties of noninfringement, fitness for particular purposes, and so on)
  • dictate the limit of your company's liability for the site, other users postings on your site, sites you link to, and so on
  • dictate jurisdiction for any disputes relating to the site

17. Get your copyrights in order. The footer of your site should display a copyright notice for the content of your site. The notice should read "(c) [date] [copyright owner name]. All rights reserved." You should also deposit a copy of the site with the U.S. Copyright Office to record ownership of the site's content, look and feel. Finally, under the Digital Millennium Copyright Act, depending on the purpose of and your users' activities on the site, your company may be eligible to register for limited liability offered by the act for your site. It's probably best to consult your attorney, who can review the act and determine if you qualify and how you register.

18. Post any warranties you offer. Statements on your site about your products and services are express warranties to customers. It's important to carefully review all text on your site to be sure that what your company promises is true and corresponds with its other policies and advertising. For example, your site should not promise a 60-day money-back guarantee if your contract states only a 30-day warranty. When you review your site, look for statements that are absolute statements, which may be hard to prove or verify if the FTC were to request that you do so. Examples of such statements include: "Our printer works with all software," "Our services are the best" and "We guarantee that our product will always perform perfectly." Also be aware that the FTC has specific guidelines that should be followed for use of the words "free" and "guarantee" in advertising or on your site.

19. When it comes to taxes, be sure to pay what you owe. Online companies with a physical presence, or nexus, in a state are required to collect and report taxes on sales made to customers living within that same state. For example, if your online business is based in California, you must collect and report sales tax derived from fellow Californians making purchases on your site.

But things may be changing this fall as 13 states will start encouraging, but not demanding, that online businesses collect sales taxes just as brick-and-mortar businesses are required to do; more states are considering joining the effort. The states are offering businesses a promise--and an implicit threat. If businesses register and start collecting taxes this year, they're given a yearlong amnesty from the possibility that states may seek back taxes for online purchases.

The 13 states are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, and West Virginia. Five that will be added in the next few years are Arkansas, Ohio, Tennessee, Utah and Wyoming. For the most up-to-date information on the topic, consult your accountant or other tax professional.

20. Comply with international laws when selling overseas. Keep in mind, different laws and customs apply when selling across national boundaries. For example:

  • You're responsible for preparing the customs paperwork when shipping to a foreign country. If you're not sure how to do that, your shipping company can explain how.
  • Many foreign countries, especially in Europe, require you to register as a local business and pay local taxes if you're selling large quantities of goods to their citizens.
  • Some countries, particularly in Africa and Asia, have restrictions on the amount of currency their citizens can transfer abroad.

For the most current information on all legal issues related to your online business, be sure to consult an attorney who specializes in internet businesses.