A Terms Of Use Policy Is Essential For All Online Business Owners

A Terms Of Use Policy Is Essential For All Online Business Owners

By David A. Wheeler, Greenberg Traurig, LLP

For online business owners, there really are no exceptions, in my view, as to whether or not you should have a website terms of use.  You want it to protect your intellectual property, you want it to protect your proprietary information and you want to use it as a shield from liability.  You want to make sure to lay out that there are certain limited warranties with regard to the site-not necessarily the products you're selling through the site, but limited warranties with regard to activities conducted on the site. 

For example, you want to make sure that you're not responsible for any damage to computers or laptops or PDAs that may be used to connect with the site.  This could happen in many forms.  It could be a virus lurking when you connect to the site that's downloaded onto your site via a cookie or something of that nature.

What are the consequences of not having a Terms of Use policy? 

First and foremost, you set yourself up for a class action lawsuit, which can be very expensive, and could likely shut down a small business.  You want to make sure that you shield yourself from liability for Intellectual Property (IP) infringement and take advantage of the safe harbor  under the Digital Millennium Copyright Act (DMCA).

You want to make sure that you have the proper framework in place pursuant to the DMCA in case someone does contact you and makes a claim that certain content on the site has not been authorized for use.  In these cases, the DMCA is basically a safe harbor that can shield you from liability. 

However, it's not enough just to have the safe harbor language outlined on your site-you have to take some affirmative steps to register with the Library of Congress.

David A. Wheeler is Of Counsel at Greenberg Traurig, where he focuses his practice on eCommerce, information technology, and privacy matters. His experience includes domain name and trademark disputes and registrations, trade secrets litigation, information privacy and identity management, data breach notification compliance, software licensing and outsourcing agreements. Prior to practicing law, David served as a software engineer for a Virginia-based defense contractor and later traded spot currencies as an electronic market maker for the First National Bank of Chicago. He also served as telecommunications consultant for the Bank of America. David has also litigated consumer financial services matters including Telephone Consumer Protection Act and Fair Credit Reporting Act class-action matters.

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