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Don't Get Caught in the Web: Legal Protection in Cyberspace

By Ron Clark |

Many businesses are using or are considering the Internet to advertise their offerings and provide information to existing or potential customers or other interested persons. Websites represent the most well known vehicle on the Internet for communicating information about a company and its products. A website can help a company deliver product information, establish a corporate identity, build brand awareness and loyalty, identify potential customers, receive feedback from current customers and even conduct sales transactions and carry out research. In the case of public companies, websites can also be used to meet continuous disclosure requirements under securities legislation and as a tool for investor relations.

The usefulness of websites as a tool for doing business is clear. However, the creation of a website entails certain legal risks that the owner of the website should be aware of and adequately address. These can include:

  • Unauthorized use of website owner's protected names or content.

  • Unauthorized copying of look or layout of another's website.

  • Corruption of or tampering with website contents once downloaded.

  • Unauthorized dissemination of contents of website.

  • Website accessed in jurisdiction where the sale of products or services contained on it is illegal or regulated: eg. contests, gambling, firearms, financial services.

  • Liability for content of websites that are hyperlinked to the owner's website.

  • Liability for content posted on company's website by parties other than the owner (eg. bulletin boards, chat rooms).

  • Liability for consequential damages based on incorrect information on website, eg. bad investment decisions.

  • Being subject to the law of a foreign jurisdiction.

  • Advertising, marketing or statements made on the Internet that would be prohibited or regulated in other media, eg. tobacco, alcohol, pharmaceuticals, false or misleading claims, defamatory statements.

  • Use of domain name that is similar to existing name or mark of another person.

Some ways to address these risks:

  • Set up a "legal page" setting out the terms and conditions that the user agrees to abide by. Such terms and conditions might include the following:

    1. The content of the website is protected by copyright of the owner by marking the work with the word "copyright" or a "C" in a circle, the year of publication, the name of the copyright owner and the words "All Rights Reserved".

    2. For copyrighted works used under license, an indication that the work is being used under license and the name of the holder of the copyright.

    3. The user of the website is granted a limited license to use extracts of the information for personal non-commercial use only, provided that it is not modified and provided that the user is fully responsible for the consequences of such use. No other use, reproduction or dissemination is permitted.

    4. None of the contents of the website should be taken to constitute an offer or solicitation to buy or sell products or services.

    5. Any products or services mentioned on the website are made available in accordance with local law and only where they may be lawfully offered for sale.

    6. Any links to other sites are provided for convenience only and the owner assumes no responsibility for the accuracy or appropriateness of information contained on such sites.

    7. The owner is not responsible for any direct, indirect, special, incidental, consequential or other damages arising out of or in connection with the use of the website.

    8. The laws of Ontario and the laws of Canada applicable therein shall govern the agreement under which the user is permitted to use the website. The user consents and submits to the non-exclusive jurisdiction of the Courts of Ontario in any action or proceeding instituted under or related to these terms and conditions of use.

  • Ensure that legal page must be viewed when entering site or is prominently displayed.

  • Carry out appropriate searches before registering domain name.

  • Determine the jurisdictions in which website content is expected to be accessed and confirm compliance with applicable laws in such jurisdictions.

  • Regularly review chat room or bulletin board postings and remove inappropriate material.

  • Don't do in cyberspace what you can't do in real space.

This article is for general information purposes only and is not intended as legal advice. For advice on specific legal issues, please consult your lawyer.

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