Covering the bases for your Web site - legal, copyright matters

Nation's Business, Nov, 1996 by Peter Weaver

If you're planning to set up a business site on the Internet, or if you have already done so, make certain your trademark and copyright documents and insurance policies are in order. A competitor could be watching your every move and could try to shut you down if it sees you making what appears to be a legal misstep.

One firm that encountered a product-name conflict when it went on line is Javan Enterprises Inc., a small computer-electronics company in Nashville, Tenn. The firm does business under the name Javanco, which is based on the first name of its owner, Javan Keith.

Javanco established a World Wide Web site in April to sell parts and accessories nationwide.

"We got a cease-and-desist letter from [computer company] Sun Microsystems," says Rick Kendall, Javanco's computer manager. Javanco had already registered its name with Internic, the official Internet name registrar, in Herndon, Va., Kendall says, and company managers thought they had a lock on the name.

Sun Microsystems said it wanted Javanco to give up the name because it was in conflict with the company's new JavaSoft package, a "browser" used to navigate the World Wide Web.

Javanco's lawyers, backed with registration documents, took up the matter with Sun Microsystems' lawyers. As a result of the discussions, Sun Microsystems' JavaSoft president, Alan E. Baratz, issued a statement that said in part: "It should have been clear from the circumstances that Javanco's name was not a play off our Java trademark. It was our mistake."

In another case, Microsoft Corp. is doing battle with Synet Inc., a small Internet-service provider based in Downers Grove, Ill. But this time, it's David attacking Goliath.

"We had the name Internet Explorer registered in Illinois two years ago and have a trademark application pending with the federal government," says Dhiren Rana, Synet's CEO. "Then along comes Microsoft with the same name" for its Web browser. Synet sued Microsoft to I protect its trademark. "We want them to stop using the name," Rana says, "because with all their marketing power they're killing us with our own trademark."

Microsoft appears to be digging in for extensive litigation. "We believe the name Internet Explorer is descriptive wording and is too generic to be trademarked," says Tom Burt, Microsoft's senior corporate attorney.

With Web-site cases appearing on dockets around the country, is there a new, mysterious type of cyberspace law in the making? "There's nothing more to fear in cyberspace law than there is in `paperspace' law," says Mark Minasi, president of TechTeach International, an Arlington, Va., consulting firm serving computer-industry clients.

Minasi likens Web-site business information to print-and-mail newsletters and advertising circulars. Newsletter publishers now going on line are being advised to take the same precautions as when they mail printed material.

If you're starting a Web site for your business and don't have any experience in the publishing field, however, you may not be aware of the various legal pitfalls that are well-known to print publishers.

If you inadvertently use someone's trademark, copyrighted picture, or text in a local information sheet, advertising flier, or other limited-exposure publication, you may get away with it. But "when you go on line," says James Teicher, publisher of Stock Alert, a West New York, N.J., financial-news service on the Internet, "there's a much bigger risk of getting caught because a lot more people. here and abroad, will be watching what you're doing."

Before you put new material on line, it should be reviewed by an attorney who knows the laws pertinent to the publishing business. Your business lawyer or the local bar association should be able to provide names of such experts.

You should also check with your insurance representative to see if you're covered for damages and legal-defense costs that may result from lawsuits over material you put on the Internet. A number of insurance companies offer appropriate coverage.

One type is available through the Newsletter Publishers Association, based in Arlington. "We*e put together errors-and-omissions, libel, and copyright insurance for our print and on-line members," says Todd Piczak, a spokesman for the association. The insurance is provided by Media-Professional Insurance, of Kansas City, Mo.

If a member who has purchased the coverage is sued, the insurance covers damage judgments as well as legal costs. The cost for $1 million of coverage is $1,200 a year. Membership in the association costs $395 a year for small firms (those with up to $500,000 a year in revenues); higher fee brackets have been established for larger companies.

Membership in the association entitles a company to six free hours of review of its materials before they are published; the association's law firm checks the materials for trademark, copyright, libel, and other matters. For further information and an information packet, call 1-800-356-9302.

Before you make the leap into cyber-business, it pays to check first with your lawyer and your insurance agent.