Legal Suicide for Web 2.0 start-ups: A beginner's guide

I got an email from Fred von Lohmann of the Electronic Frontier Foundation yesterday. It began, "Half the companies you blog about have copyright or privacy legal issues simmering just under the surface. Since most of them are thinly capitalized, when they get into trouble, they're likely to call EFF for legal advice. Several already have."

I called von Lohmann right away, since I've had a nagging feeling for months that too many of the interesting products I've been seeing were legally shaky. So I talked with him to come up with this list: 9 Fun Ways Web 2.0 Startups Can Commit Legal Suicide.

For more information than can fit in a blog post, you might want to check out the EFF's upcoming Compliance Bootcamp on Oct. 10 in Mountain View. I told von Lohmann I'd link to the event in exchange for this preview.

1. Ignoring the rules of Safe Harbor

Many media sharing sites, like SimplifyMedia, exist in a narrow legal framework carved out of the DMCA. But you can't take advantage of the Safe Harbor provisions of the DMCA if you don't register as a "copyright agent." All that's required is filling out a form and paying an $80 fee. You can't get protection without registering. As von Lohmann said, "The difference between you and Napster might be this form."

2. Ignoring the Terms of Service chain

This applies to sites that collect or aggregate data--like Mint, which collects its users' financial information. The sites where the data are coming from may have terms of service that prohibit their users from sharing them with third parties. Sites that collect this information may be seen as encouraging breech of contract, which is a legal exposure.

3. Falling for a sob story

If you're collecting personal information from or about people, there will be other people who want it. They may call up your company and give someone there a convincing story to get it. If your team falls for this "pretexting," or social engineering, users can sue you for exposing their information.

4. Keeping your data forever

There are few legal requirements for data retention in the U.S. Take advantage of that, and from time to time purge user-identifiable information from your service. That way, when you get subpoenaed for information that would force you to reveal more than you want to about your business or your users, or cost you a bundle fighting it, you can honestly say you don't have it. Von Lohmann notes that analytics experts generally say to keep everything for future data mining projects, but there are ways to anonymize your data while still keeping that possibility open. For example, you can overwrite the last quartet of IP addresses in you logs with null data.

5. Being open to kids

The collection of data from children younger than 13 is regulated by the COPPA, the Children's Online Privacy Protection Act. If your business doesn't see children as customers (most don't, since they don't have credit cards or mass spending power), you should make an effort to keep their personal data off the site. Asking for users to confirm that they are over 13 years old before leaving data on your service is a start.

6.Expanding into print

Thanks to Section 230 of the Communications Decency Act, you're protected from libel suits filed against you if your users write disparaging comments about other people or services on your site. That's how ZocDoc, a new Yelp-like service for finding doctors, can exist without being sued into the ground. But if you print out your user reviews, this no longer applies. So be careful if your customers or users ask for it.

7. Ignoring the bribes you have to pay

For any good idea out there, "someone will claim it infringes" with their patent, von Lohmann says. Patent trolls live to shake settlements out of companies that have money. As long as you're thinly funded or struggling, they won't come after you. Like successful parasites, they target big, juicy hosts. So don't expect a patent claim against your business until you're established. But don't expect the proposed terms will be worth fighting in court. The quick settlement is what the trolls are after, and settling makes the most business sense for most companies. Be sure to prepare for this outlay.

8. Cooperating with the police

What are you going to do when the Man comes knocking on your door? You need to know. Law enforcement agencies inexperienced with online law--that would be most local sheriffs and police--may ask for things that, if you give them up, will simply get you into deeper trouble. You need to know ahead of time what you'll do when these requests come in. The best bet is to keep a lawyer around.

9. Thinking you are in the clear

The law is a snarling beast (according to me, not von Lohmann), and start-ups run fast and often headlong into its maw. Von Lohmann's two big takeaways: First, be sure you know when you're stepping into a danger zone. Music? Financial data? Private information? Kids? Don't let yourself think you're more clever than another industry's legal machine. Second, realize that no matter how hard you try to stay clean, "You're probably doing something wrong already. For the most part it doesn't matter, but something just might."

[ted_rheingold]

Protect your Marks while you are at it.

[ted_rheingold]

Protect your Marks Now, not Later.

I once did a USPTO search on recent popular web services and I was shocked that even intent-to-use requests had not been submitted for many of their site names, company names or logos. Having a domain name in no way grants you the right to use that word as a legal mark. In fact the longer you go without requesting exclusive use of your marks and logos is a way of saying you're not interested in them in the first place. Spend the $350 for each submission, spend the 5 hours with the lawyers to get the submission right. This is money you cannot afford to not spend.

I'm also very curious to see if anything bad happens to companies that allow 3rd parties to use part of their name in their software. For example Company A makes a service caller SuperCool, and Company B uses Company A's API to view SuperCool on an iPhone and calls it iSuperCool. By not giving Company B explicit usage rights to the name, then Company A, I believe under current laws, is saying they aren't interested in having exclusive use of their name. If Company B gets lots of funding, or bought by a rich company, and really wants to keep iSuperCool, they could make real problems for Company A.

[srkview]

Legal Suicide for Web 2.0 start-ups: A beginner's

Web 2 companies are trying to find viable business model to get things going and that involves exploring different avenues of sales, market and customer channel which sometime cause them to commit blunders! - www.360view4u.co.uk

[tristan_bethe]

Legal Service?

Does anyone know if there are any good companies that can do some sort of legal check for your website. Are there any specialists in this field?

[anarsizm]

Looks very interesting. I'm also very curious to see if anything bad happens to companies that allow 3rd parties to use part of their name in their software.
Regards, anarsizm forum

[nethiz]

web 3.0 coming :)
Nethiz Turkce SEO Link dizini
Pc nedir?

[diablopolis]

Thanks for very interesting article. I really enjoyed reading all of your posts. It?s interesting to read ideas, and observations from someone else?s point of view? makes you think more. So please keep up the great work.
Regards, felsefe edebiyat

[kgillk]

Very good points brilliantarticle with Many media sharing sites, like SimplifyMedia, exist in a narrow legal framework carved out of the DMCA. But you can't take advantage of the Safe Harbor provisions of the DMCA if you don't register as a "copyright agent." All that's required is filling out a form and paying an $80 fee. You can't get protection without registering. As von Lohmann said, "The difference between you and Napster might be this form."

[jenni2009]

thank you

<a href="http://www.bellspharmacy.com">Generic Viagra</a> |
<a href="http://www.bellspharmacy.com">Cheap Generic Viagra</a> |
<a href="http://www.onlinemedicalstore.net">Cheap Generic Viagra</a> |
<a href="http://www.rxpillspharmacy.com">Buy Generic Viagra Online</a> |
<a href="http://www.safegenericmeds.com">Buy Cheap Generic Viagra</a>

[need4n]

Try NeedForNews.com, a new comprehensive news aggregator. With NeedForNews, you don ?t really have to go anywhere else; NeedForNews has it all.
needfornews.com

[need4n]

Try rssnewsdigest.com, a new comprehensive news aggregator. With NeedForNews, you don ?t really have to go anywhere else.
http://rssnewsdigest.com/top_search.php

[livebhajans]

Thanks for very interesting article.
<a href="http://www.hisw.org">health cure</a>I really enjoyed reading all of your posts. It?s interesting to read ideas, and observations from someone else?s point of view? makes you think more. So please keep up the great work.
Regards
<a href="http://www.livebhajans.com">ganesh</a>

[livebhajans]

I don't normally comment on blogs but your post was a real call to action. Thank you for a great read, I will be sure to bookmark your site and check in now and again.How long it took you to get so much info ?? Well ,I really appreciate your Hard Effort in gathering so info much for us.!!
http://www.livebhajans.com
Anyways thanks

[sulumits-retsambew]

This definitely looks very interesting. I'm also very curious to see if anything bad happens to companies that allow 3rd parties to use part of their name in their software.

Regards,
<a href="www.thesulumitsretsambew.com/">Sulumits Retsambew</a>

[sulumits-retsambew]

On second that, does anyone know if there are any good companies that can do some sort of legal check for your website. Are there any specialists in this field?

Regards,
<a href="http://www.thesulumitsretsambew.com/>Sulumits Retsambew</a>

[sulumits-retsambew]

Okay, I managed to get the answer. A quick search on Google displays the list of companies which I asked for on my last comment.
Regards,
<a href="http://www.thesulumitsretsambew.com/">Sulumits Retsambew</a>

[bluebitza]

Interesting story. I have found a couple of sites that live on the edge of legal media, one such site I googled is

www.getapop.com

I have contacted the owners to check what legal precautions they have made - seems like they have a very comprehensive terms of service page!

[jenni2009]

<a href="http://www.bellspharmacy.com">Generic Viagra</a> |
<a href="http://www.bellspharmacy.com">Cheap Generic Viagra</a> |
<a href="http://www.onlinemedicalstore.net">Cheap Generic Viagra</a> |
<a href="http://www.rxpillspharmacy.com">Buy Generic Viagra Online</a> |
<a href="http://www.safegenericmeds.com">Buy Cheap Generic Viagra</a>