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Troy Meyerson, Partner, Fraser Stryker PC LLO @InternetAttys
1. Setting up the business.
-you may want to set up a separate entity for each portion of your business, so there is limited liability if there is a problem with one portion of your busines they can’t come after the other parts.
2. Affiliate Contracts
-never work with an advertiser or affiliate program without a contract
-an advertiser or affiliate program should have a standard contract
-important provision – how is compensation determined – per click or per lead, per sale
-lead volume – is their a cap in your contract on getting paid for volume that you sendd?
– commission step-up – are their two tiers to payouts and can you reach the second tier.
-termination provisions – can you terminate the contract without penalty
-leads/actions -what qualifies?
-limitation of liability – is there one, is it mutual, are their consquential damages claimed?
Bottom link on analyzing affiliate contracts – Read it! Make sure you understand your obligations and structure your websites to comply with the contract’s terms.
3. Terms of Service
Common Terms of Service Provisions – Digital Millennium Copyright Act (“DMCA”) Notice
Limitations of Liability – potential liabilities to be averted, copyright infringement, defamation and obscenity torts
Terms governing the submission of user content. If you have user generated content you should register with the DMCA. It is a great asset if you allow third party content on your website.
Choice of Law and Venue Provisions – if you are located in a certain state you can try to enforce they they have to sue you in your state.
Terms of Service Enforceability – assuming the contract is otherwise enforceable, courts should enforce terms of service if the user continues to use the website after having reasonable
Are the terms (or a link thereto) visiable when the user registers
Does the website implement its terms of service through a browsewrap contract?
-Do not proceed to the next slide unless you agree…
Does the website utilize a click-through contract?
-Click this box to proceed to the next slide, and by doing so you expressly agree to the terms of this presentation.
4. Privacy Policies
-they are sometimes required, but should always be considered.
There is no blanket federal law mandating privacy policies for all websites.
Some states require them such as California
Children’s Online Privacy Protection Act of 1998 (”COPPA”)
Directed at websites that are directed at children and operators with actual knowledge they are collecting personal information from children under 13 years old.
-last month the FTC released new rules interpreting COPPA effective July 1, 2013
-requires websites that allow plug-ins or third party advertisers to collect children’s personal information to follow COPPA even if the website does not collect personal information
-opertaters of plugins or third party ad networks that have actual knowledge that they are collecting personal information through a child directed website must follow the notice and consent rules.
-Covered information now includes first and last name, physical address, phone number, screen name, ip address
California Online Privacy Protection Act
-who is affected – any website that collects information from California residents
Delta Airlines had an app that collected personal information, AG sent a non-compliance letter to Delta, Delta did not take action. There are fines involved and the issue is not resolved.
FTC enforcement of Posted Privacy Policies – some people just copy them, and it might not accurately reflect the data that you take.
What to include?
-above all else – outline your actual data collection practices!
-if you plan to sell or distribute a user’s email address, say so.
-Explain what information is collected and for what purpose
-address websites to which you link
-specifiy a weay for users to contact you
-consider disclosing how users can deactivate cookies in their web browser
-do not guarantee absolute security of personal information – you will use reasonable efforts
5. FTC regulations and truth in advertising
Section 5 of the FTC Act prohibits unfair or deceptive acts and practices in or affecting commerce
“Business Opportunity” advertisements must make certain disclosures. Must provide a one page disclosure document to customers.
If you make a claim to a certain income than you must provide an additional disclosure document.
The bottom line for affiliates – do not advertise business opportunites without seeing the disclosure documents, don’t make earning claims unless there is the required document
Consumer Endorsements – any advertising message that consumers are likely to believe reflects the opinions of others
Requirements – does the ad feature a consumer explaining their experience, is teir experience common, can they support the claim that everyone should expect those same results, you can no longer just say “results not common” Now have to say “clients following the program, on average, lose 1-2 lbs a week.”
Disclose connection between endorsers and sellers – if you have a relationship with the manufacturer, you get free products or money to write the review, you must disclose that.
Discloser Requirements – reviewrs in traditional media do not have disclose because people understand they got I
6. Trademark Infringement
registration is not mandatory but is helpful. The law strongly incentives registration. Presumption of Ownership in the Mark, you can bring suit in Federal Court. Ability to obtain registration in foreign countries.
Two places with Trademark Infringement Advertising Issues
-Google Adwords and Banner Ads
-keyword triggers still present some risk, but only a slight risk if you follow these rules
-don’t use the trademark in the text of your advertisement
-make sure the ads are seperated and labeled as advertisements (especially important with banner ads)
-protects “original works or authoship”
-photographs, music, art
Copyrighted material is not in the public domain merely because it is placed on the internet.
Material may be copyrighted even if is doesn’t have a ©
You can be sued for actual damages and any profits attributable to the infringement
Buy licenses for images that you use on your website. Don’t use pictures, music, etc without permission.