Your company's Internet presence has undoubtedly become an increasingly important part of your business development and marketing strategy. With the recent explosion in Internet usage, most organizations have concluded that they cannot fully meet their clients' and customers' expectations without having one or more home pages on the World Wide Web, commonly known as "web sites." To be most effective, however, a web site must be carefully reviewed and monitored on a regular basis (particularly if the site is interactive) to ensure that potential legal liability is minimized. One area of particular concern for web site owners is copyright and trademark compliance. A periodic web site audit that focuses on the following three areas would mitigate these concerns:
1.*Assessing ownership of material on the web site;
2.*Monitoring use of your intellectual property by others; and
3.*Considering federal registration of intellectual property on the web site.
Before detailing these aspects of a web site audit, a quick primer on copyrights and trademarks may be helpful.
A copyright refers to the protection that automatically attaches to an original work of authorship (excluding a government publication) that is fixed in a tangible form, including literary, musical, dramatic and artistic works, computer programs and web sites. Examples of copyrighted material are books, musical scores, and paintings. The benefit of a copyright is that it protects the work from unauthorized copying by others. Federal registration is not required to receive copyright protection.
A trademark is a word, phrase, symbol or design, or a combination of those, that distinguishes the goods and services of the trademark owner from those of others. An example is the Nike "swoosh." In the United States, trademark rights are developed through use of a trademark and not through registration. As a result, the first user of a mark is protected against others' unauthorized use of confusingly similar marks, regardless of whether the mark is federally registered.
Conducting a Web Site Audit
Whether you have a web site up and running or are still in the development stage, you need to consider the legal ramifications of choosing the material used on your web site.
1. Assessing Ownership
Whether you download information onto your web site from another site or source or link your web site to another by using its logo, you must determine whether anyone owns intellectual property rights in that material. Copyrighted and trademarked material is widely available on the Internet, often with little or no indication of ownership. However, significant legal consequences may follow from unauthorized use of this material, including civil fines of $500 to $20,000 per copyright violation and/or criminal penalties of up to $25,000 or one year in prison for a first copyright offense;1 treble damages and attorneys fees may be awarded for trademark infringement.2
a.*Copyrighted Works
Copyrighted works are perhaps the most easily accessible material on the World Wide Web. For example, a widget manufacturer can easily download onto its web site a positive article on widgets that names the manufacturer. However, if the article is protected by copyright, such action could constitute copyright infringement. Because much of the material on the Internet is protected by copyright, it is relatively easy to fall afoul of the law. This situation is further exacerbated because U.S. law no longer requires that a copyright notice (e.g., © XYZ Company 1999) appear on a copyrighted work. As a result, an Internet user may be unaware that a short article, drawing, photograph or musical recording is not available for general copying and use.
Congress recently provided some protection for Internet service providers and users against copyright infringement caused by third parties with the passage of the Digital Millennium Copyright Act, enacted October*28, 1998 (Pub. L. 105-304). Among other things, this statute provides that a service provider (e.g., America Online) shall not be held liable for copyright infringement if a third party (e.g., someone posting a message on a bulletin board or in a chat room) places copyrighted material on the provider's site and if the provider takes certain steps to monitor the site and remove infringing material. However, the reach of this legislation is limited: it is not clear whether it also protects web site owners and it does not address infringement by the web site owner itself (or its employees).
Notwithstanding the broad protection granted the copyright owner, there are several ways a work can be incorporated in a web site without violating the author's copyright. First, you may obtain the permission of the copyright owner to "reprint" the work on your web site. Many owners will allow this as long as you provide proper attribution (e.g., "Reprinted with permission. © 1999 Wall Street Journal") or the payment of an agreed upon royalty.
Second, you may reproduce a portion of the copyrighted work on your web site if the reproduction constitutes "fair use."3 The "fair use" principle allows a user to make use of a small part of a copyrighted work without the permission of the copyright owner, for purposes such as criticism, comment, news reporting, teaching, scholarship or research.
Another alternative is to provide your web site users access to the article by merely providing a link to the article on the copyright owner's web site. Such links have become very common and have given rise to the use of "web linking agreements." Such an agreement, which may be short and simple, typically states that the copyright owner gives its permission for you to establish a link to its web site from yours.
b.*Trademarks
The issue of trademark ownership is important for the same reasons that copyright ownership is important, that is, because of the possibility of significant civil and/or criminal penalties for infringement of another's mark through Internet use. Therefore, a company must be careful before linking its web site to another site by means of a logo (e.g., ®), because if this logo is used as a trademark, the company may be vulnerable to an action for trademark infringement.
There are other ways a company may unintentionally find itself entangled in trademark law. For example, if the web site uses names, slogans, or designs that have been copied from other sources, even if those items have been changed somewhat for use on your web site, their use may constitute trademark infringement. Similarly, use of another's trademark as part of your Internet domain name may raise issues of trademark infringement, as well as potential loss of the domain name. For these reasons, if you develop a trademark to be used in conjunction with a product or service you provide, you should determine that the mark is not currently used by someone else for a similar type of goods or services before you invest substantial capital in the trademark.
2. Monitoring Use By Others
In addition to assessing the ownership of all material you plan to use on your web site, it is equally important that you monitor the Internet for unauthorized use of your intellectual property by others. After all, it is as easy for others to download material from your web site as it is for you to download their material.
There are two primary ways in which to monitor the Internet for unauthorized use of your intellectual property. First, you can "surf the web" on a regular basis to identify potential infringers. Alternatively, you can hire a service that will routinely monitor the Internet for you - this option is more commonly available for trademarks than for copyrighted material. In either case, once you have identified apparent infringers, it is important to follow up that identification with an appropriately worded "cease and desist" letter in order to protect your intellectual property.
Other sound intellectual property protection practices include placing appropriate notices on all materials. For example, all written material not intended for general copying or downloading without the company's permission should bear a copyright notice: © XYZ Company 1999. Similarly, all trademarks, whether registered or not, should be identified by the proper symbol: Ô*(for unregistered marks) or ®*(for federally registered marks). In addition to these short but conspicuous notices, you may wish to provide a longer notice, either on each page, or via a link, that more fully explains your company's policies regarding copying and distribution of the material on your web site.
By providing proper notices and actively monitoring the Internet for unauthorized use of your intellectual property, you will reduce the risk of competitive injury, as well as the risk that a copyrighted work will fall into the public domain or that a trademark will become generic and, therefore, will no longer be reserved for your exclusive use. These are prudent, proactive ways to protect your rights in these intellectual property interests.
3. Federal Registration of Intellectual Property
The final item in an audit of web-related intellectual property is to determine whether to obtain federal registration for any or all of the material incorporated in the web site. Federal registration is available for copyrighted works, including the web site itself, as well as for trademarks. Copyrights are registered with the Copyright Office of the Library of Congress and trademarks are registered with the U.S. Patent and Trademark Office ("PTO"). While Internet domain names are registered with an independent source (currently with Network Solutions, Inc., also known as Internic), they may also be registered as trademarks with the PTO if they are "unique," identify your goods and services, and are used as a trademark by your company.4 Items such as web links are not individually registrable, but the selection and arrangement of links (for example, a separate page of links, arranged in a creative way) may be copyrightable.
As mentioned previously, neither copyrights nor trademarks must be registered for legal rights in the material to exist. However, federal registration provides owners of both kinds of intellectual property significant procedural advantages as well as the potential for larger damage and punitive awards. Additionally, for copyright owners, registration is a prerequisite to filing an infringement case in federal as opposed to state court.
Conclusion
In order to get full value from your company's web site, it is important to pay close attention to the use of intellectual property on your site and to protect your intellectual property from unauthorized use by others. A good web site audit will focus on three areas: (1)*assessing ownership of all material on the site; (2)*monitoring use of your intellectual property by others; and (3)*considering federal registration of intellectual property related to the web site for maximum protection.
If you regularly review your web site, obtain permission to use material owned by others in advance, monitor the Internet for unauthorized use of your material, and federally register your materials and trademarks, you will give your company the strongest possible protection for its intellectual property. A company's intellectual property can be its most valuable asset and the Internet can enhance its value. At the same time, inherent risks exist in this new technology and this new medium: forewarned is forearmed.
1. 17 U.S.C.§§ 504(c), 506(a); 18 U.S.C.§ 2319.
2. 15 U.S.C.§ 1117(b).
3. 17 U.S.C.§ 107.
4. A copy of the PTO policy regarding registration of Internet domain names as trademarks may be found at http://www.uspto.gov/web/offices/tac/domain/tmdomain.htm.
Reminder: Use Our Fax Follow-up Service, 202-496-7756, or
For more information, please contact: