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Top Ten Legal Oversights That Can Shut Down Your Website (Part I)

Many legal problems can shut down your company’s website. Here are the first five of the top ten most likely culprits:

10. No Website Disclaimer

Liability: Liability depends on the type of disclaimer omitted and the resulting damage. Good disclaimers often cover errors and omissions on the website, third party links and the website not constituting an engagement of any kind. Including irrelevant, redundant or non-applicable items in a disclaimer, however, may diminish the insulation from liability the disclaimer is designed to provide.

Solution: Be sure your disclaimer relates to your industry and the specific information contained on the website. Draft the disclaimer for your typical website visitor and be sure you yourself understand every aspect of the disclaimer

9. Privacy Breaches

Liability: Failing to properly inform website visitors of the company’s privacy policy, or using confidential information contrary to the policy or industry regulations, can cause severe repercussions. Large-scale or egregious breaches in privacy can quickly devolve into a financial and public relations nightmare.

Solution: Post a detailed privacy policy which dictates the disposition and security associated with the various types of private information you collect. Be sensitive to how you may use the information in the future, as a narrow policy may be difficult to broaden after you have collected the information. Be sure to comport with all legal and regulatory restrictions pertaining to your particular type of business.

8.  No Chain of Command

Liability: Thinking someone else is covering the problem can cost your company millions. Not only may your company be liable, but your officers and directors may be held personally liable if they were made aware of the problem, but failed to take appropriate action.

Solution: Develop a coordinated chain of command. Draft written reporting procedures and protocols for addressing IT issues on a timely basis. Designate a Chief Information Officer (“CIO“) to coordinate directly with the Board of Directors and reduce critical IT-related delays and failures.

7. Failure to Protect Intellectual Property

Liability: Intellectual property is the primary asset of most online retailers, software companies and companies with a solid brand identity. Reclaiming lost trademarks, customer lists, proprietary technology or patents is often not possible. Failure to properly protect these assets can, single-handedly, destroy your entire company.

Solution: First, find out what intellectual property your company has and document ownership. Second, file for intellectual property protection on intangibles such as trademarks and patents. Third, draft and execute intellectual property transfer/license documentation well prior to any use of intellectual property from outside the company.

6. Security Breaches

Liability: Lapses in security translate over one trillion dollars in annual corporate lossees. While hackers account for a portion of this number, disgruntled or careless employees account for most of the losses.

Solution: Carefully tailor a security plan for your particular industry and type of website.  Identify and prioritize the potential risks. Adopt a strict security policy, even if one is not legally required. Be sure to include flexibility in the policy and remedial protocols in the event of a breach.

Next. The top five oversights . . .


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I saw your page at http://www.iowabiz.com/2007/04/top_ten_legal_o.html and wanted to suggest a resrouce to add: http://www.FreePatentsOnline.com. This site allows free patent searching, free PDF downloading, free alerts, and more. It is a good resource for IP attorneys, patent searchers, scientific researchers, students, and small businesses.

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