website legalities

Web Development Agreements – Why You Need Them

Linkilaw Business Names, Company Law, Employee Regulations, Marketing & Social Media, Startup Advice & Tips

Fortunately, these days we’re able to find exactly what we are looking for on the Internet – from goods and services to entertainment. Hefty business listings being dropped off at your front door are a thing of the past. If you own a company and you’re not on the web, you may as well be hiding your ‘open’ sign in the forest.

Both established companies and entrepreneurial startups fight tooth and nail to attract customers and expand their clientele. Neither intention would be nearly as plausible without having a unique website to call their own. So, where do you get one? And how can you be sure you’re covering all the legal bases?

Let’s explore this further…

Website Development

Normally, you would contact and engage a Web Developer. These are professionals who undertake the creation of a website, designing it according to a Client’s needs and preferences. Furthermore, the Parties may agree on certain additional tasks for the Developer. However, not everyone takes into consideration the legal parameters involved which might cause contention or loss of rights if not adequately protected from the onset.

Common examples might be when a Developer is hired to write the content for the website, or to conceptualise the brand’s logo. Understandably, the Client would present the Developer with a lot of proprietary and often sensitive information, and it’s therefore necessary to safeguard it from later illegal dissemination. Moreover, the data in question may be subject to copyright protection and the website might bear a trademark.

Trademark Infringement

It goes well without saying that the Client has probably registered the trademark according to applicable law before ordering to put it on the website. Registration gives them primary protection, however, the point to bear in mind here is that the scope of protection is territorial – meaning that it might well have been hijacked outside the territory in which it is registered.

Sometimes the undisputed use of a trademark for a lengthy time is sufficient to establish a user’s rights to it without prior registration (i.e. for purposes of court proceedings). You are still required to register it, but you do not have to meet requirements set out for trademarks to be valid.

The damage is obvious. Potential customers and profits can be lost, since the Client cannot enter the market under this name. There might be even a worse scenario, when the goods or services provided by offenders are of poor quality and tarnish the name of the mark.

Detriment of passing off lies primarily in the misuse of a name, regardless of whether or not it brings about a financial loss. It could, for instance, interfere with a good and successful operation of the business in the future. Another example of a misuse might be producing different goods or services under the same trademark  – which are also immoral, illegal or in violation of public policy. Basically, this could destroy your reputation in the market before you begin.

Knowledge Privacy

Whereas most of the information given by the Client to the Developer will eventually be published on the website, there might be certain facts and materials not designated for such purposes. For instance, a document may contain data on many clients your firm deals with, but only a few of them are to be exposed to the public via the Internet resource. All other information is confidential.

Since initially the information was held by you in trust, you would negligently commit an offence when such data becomes public or known to third parties without those persons’ prior consent. Again it is a blow to your company’s credibility, which can result in further financial losses.

Copyright Protection

Another reason to enter into a Web Development Agreement prior to hiring your Developer is the settling of copyright matters. This issue does not arise when the Developer is an employee with your business. Unless otherwise stipulated in an Employment Contract, copyright in work created by an employee vests in an employer by default.

However, a situation is not so black-and-white in the case of engaging an external Developer. Courts follow the route that copyright should vest in the Client. Nevertheless, developers sometimes manage to establish their right in the website, which consequently leads to a situation where the Client is required to obtain permission to use the website and its contents.

Clarity of Contracts

Even when the Developer does not intend on misappropriating copyrights or trademarks, the Client should still be cautious. It is necessary to describe exactly what your expectations are, what information should and could be used, and what the Developer can and cannot do. For example, you may prohibit the Developer to take an initiative and assume leeway in their actions with respect to content. ‘“You may only use this but nothing else” guarantees that no unwanted data goes on website.

A written legal agreement reflects a mutual will and understanding of parties. Therefore, you will rely on it more than on oral arrangements of which there can hardly be any proof. The general provisions of a contract are good in setting a time frame for completion, procedure of a review, testing and approval, payment, breaches and remedies, ways to resolve disputes, etc. You might also use the Agreement to establish your wish to engage the Developer to maintain the website after it has been created.

Website Licence Rights

Generally you are forced to enter into a Licence Agreement as part of your transactions with the Developer. Therefore, you end up paying twice: firstly, for development of the website, secondly, for its use.

You might afterwards refuse to pay licence fees – because the costs are very high or out of protest  – and choose to abandon the website. Subsequently, you would then hire Developer #2 to create a new interactive space. Notwithstanding that there is no malicious intent in your actions, Developer #2 would be in breach of copyright if they used the same information.

A prospect of more expenses and loss of time might persuade you not to rebel and to accept the re-use of content. However, then justice is shaken and a right order of legal protection is disrupted.

Ongoing Hosting Services

One interesting issue to pay attention to is who is responsible for locking in the web hosting service. As the hosting is an ongoing and somewhat costly expense, most Developers will put this responsibility on the Client. However, your Agreement is a free and versatile tool with which to handle all relations between the parties. Thus, you can have the Developer assume the handling of hosting renewal.

Keep in mind, if you decide to change to another developer or site manager in the future, it can be cumbersome to transfer the hosting account, and if there is disagreement between the parties, this can prove to be a stumbling block. It’s best to have control over your hosting, no matter who pays the monthly fees.

Domain Registration

Likewise, if the Developer is to register a domain name for the website, it is vital that you participate in name choices, and more importantly retain the ownership of said domain. Naturally, the domain name should be as close as possible to the actual business name so that potential customers associate the site with your company.

Furthermore, it is necessary to ensure that the domain name is perfectly valid in terms of law and is not at odds with the Uniform Domain Name Dispute Resolution Policy 1999. This legal instrument applies to most generic top level domains (gTLDs) and country code top level domains (ccTLDs).

InfringementA third party may complain to the applicable Provider asserting the following points:

(i) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) you have no legal rights or legitimate interests in respect of the domain name; and

(iii) your domain name has been registered and is being used in bad faith.

Obviously, this would be a bad situation in which to find yourself. If the other party wins, it may force the cancellation of your domain name, or the transfer of the domain ownership to the other party. Surely no one wants to face this, especially if it was due to another person’s negligence (the Developer’s in this case).

To sum up, it is absolutely vital to sign a respective agreement with a Developer when engaging them to build your website. Not only does it cement the rights and obligations of the Parties at this moment in time, it also serves as an assurance of clarity in relations between Client and Developer as well as future use of the website. Moreover, rights of third parties are protected too – thus, you will get the desired result and peace of mind.

Comments

comments