NJBIZ 8/25/2008

Guest Column

By Jonathan Bick Jonathan Bick is counsel to WolfBlock, resident in the firm’s Roseland office and is an adjunct professor of Internet law at Pace Law School and Rutgers Law School. He is also the author of “101 Things You Need To Know About Internet Law” (Random House).

The Internet, hence Internet law, penetrates every aspect of business. Certain Internet legal issues may be specific to the type of business. However, many issues are common for all types of businesses.

Among the most valuable Internet laws that protect businesses are those that immunize them against Internet copyright infringement with an $80 filing, transform an Internet message into a legally binding signature and limit the Internet keywords that can lawfully be used on a homepage.

Avoiding Internet Copyright Infringement

1. Virtually every business has Internet site content from third parties. Unless the business has specific permission to use that content, an infringement claim could arise. The Digital Millennium Copyright Act provides limitations on the liability for most businesses’ Internet sites. To take advantage of the immunity offered by DMCA, a business need only file a form found on the United States Copyright Office’s Web site (www.copyright.gov) and pay an $80 fee.

A business must also post a notice on its Web site that informs its users that it is compliant with DMCA, and has a policy providing for the termination of subscribers and account-holders who repeatedly display or transmit infringing material. DMCA protection can be lost if the business that has filed for that protection fails to promptly block access to allegedly infringing material, or remove such material from its systems if it receives notice claiming infringement from a copyright holder or the copyright holder’s agent.

A Legally Binding Signature

By its nature, e-commerce is usually carried out by electronic communications, thus paper and ink contracts are normally not an option. Internet law provides businesses with an alternative means to carry out business and trade transactions. E-Sign (15 U.S.C. 7001-7006) was enacted to encourage the use of electronic signatures in interstate commerce. As a result, Internet messages may now be considered a legally binding signature. E-Sign applies to transaction signatures specifically. According to E-Sign, a transaction is “an action or set of actions relating to the conduct of business, consumer or commercial affairs between two or more persons.”

Generally, a signature may not be denied legal effect, validity or ‘enforceability’ solely because it is in electronic form; and a contract relating to such a transaction may not be denied legal effect, validity or ‘enforceability’ solely because an electronic signature or electronic record was used in its formation.

For example, a business may sign a contract by having an authorized person type his or her name in an e-mail. Normally, a scanned image of a document signed in ink is also acceptable. Various government agencies have specific electronic signature options. The U.S. Patent Office allows an applicant, registrant or attorney to sign an e-mail communication by entering a “symbol” that he or she has adopted as a signature between two slashes (i.e., /Jonathan Bick/). In short, virtually any e-signature, if it is intended to be a signature, is acceptable under E-Sign.

Limiting Internet Keywords

Keywords have proven to be effective tools in attracting visitors to business Web sites. Search engine providers allow advertisers to sponsor—or pay for—search terms known as keywords.

When a keyword is used in a search request, that particular keyword sponsor’s ad may appear near the search results. When properly employed, trademarks may be lawfully used as keywords; when improperly used, valid infringement claims arise.

Infringement claims arise when trademarks are used as keywords without permission. Courts have developed a guideline known as “use plus,” to ensure trademark owners are protected without creating undue restrictions on competition and consumer choice. The use-plus doctrine states that the use of another business’s trademark as a keyword, without any other use (such as a reference in the Web site content), does not cause a likelihood of confusion and therefore the keyword use is lawful. Thus, a trademark alone can be lawfully used as a keyword.

However, if the keyword is used in conjunction with a claim of association between the Internet site and the trademark’s owner, an infringement difficulty is likely to arise.

During the past decade, Internet business use has changed dramatically and most people believe both will continue to transform business. In order to fully benefit from such changes, businesses need to keep abreast of Internet law.