Legal Issues for starting an E-Commerce Business
Legal Issues for starting a E-Commerce Business
Like any other business, there are important legal to consider while doing a business on the web. If you think there is risk running your business you should take necessary actions to prevent any loss, especially if you are making a huge revenue. Everything in life has risks, your business is no exception. you can either choose to get the big money in small period or keep running the biz with law happy.
Trademark
It is meant to ensure consumers correctly identify the sources of goods or services from the trademark act, or “Lanham Act”, 18 USC Sec. 1051 etc. A trademark which can be a word, phrase, symbol or design, or combination of words, phrases, symbols or designs or in other words something that symbolizes particular service, product or company. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. Usually a mark appears on the company name and/or on it’s products . A “®” indicates a registered mark while a “TM” on a product indicates unregistered (common law) trademark rights . It is illegal to place an “®” on a mark that does not have national registration.
It is important to choose the domain(’s), company name, product and/or service name upfront which you need , though this can be done later when you have enough revenue.
This also prevents us of using previously registered domain or company name. the easy way is to do a search at www.uspto.gov and run a trademark search for the names which you’re considering.
Incorporation
Incorporation means that your company is a separate legal and financial entity from yourself. In the US and most countries it has its own social security number for tax purposes which is called a Federal Tax ID (US) or similar. It has it’s own benifits for an e.g if your company get sued and loses, the winner of the suit cannot take your personal car or home and incorporating makes you look more professional and often helps with your taxes. But it does not protect you from any criminal charges by you or the company which can come into play if you are running an adult or gambling business on the internet.
E-Commerce Issues
Clickwrap Agreement : An agreement with your users as part of the purchase process gives you a legal remedy (for breach of contract) to ensure that you will be paid, that you waive legal warranties which are implied by law into sales of products of goods, that you may disclose their identities to government authorities upon request (there have been law suit to prevent this or as a result of this), that the user is over 18 and a US citizen
Federal Trade Commission (FTC): the FTC regulates trade and commerce with regard to consumers. The FTC monitors businesses to ensure truthful advertising, that mail-order, catalog and web product purchase guidelines are followed, that sweepstakes and contest are conduct in compliance with the law, and that collection of consumer data and privacy policy guidelines are followed. All websites which collect consumer data should have a privacy policy. If you ship physical products or conduct online auctions, you should familiarize yourself with other FTC regulations in these areas. More Information at www.ftc.gov .
Copyright
Copyright can be important when obtaining content for your site and in protection of your site’s content and as a owner you have exclusive rights. for e.g
- display the work publicly
- distribute the work
- copy the work
- perform the work publicly
- modify the work etc.
Copyright term comes up upon creation of a copyrightable work such as text, images, music, etc. Facts, titles, recipes, form designs, alphabetical lists and other items do not have the required originality to merit copyright protection.The term “Public Domain” does not mean that everything in public or on the internet is freely usable, but refers to items which either do not qualify for copyright protection under the law or for which the protection has expired.you preserve the fact that they are yours as of the date of registration, and you gain more rights under Copyright law, such as being able to win attorneys fees and some times higher damages.When you buy content for your website or business, the best approach is if you can get a warranty with from the seller or licensor stating that the seller owns all the rights in it and agrees to indemnify (pay you for the costs) you if someone else sues you for using the content.If you create content, be sure to have your creator sign a contractor agreement with the language required under the Copyright Act so that you own his work product. If you don’t, he owns the copyrights to the works.
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