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Oct. 21, 2005
Knowing your e-business law
As soon as you set up an online presence, legal issues will emerge.
BAILA LAZARUS
These days, having an online presence for your company is as necessary
as having a mailing address and phone number. But while it is easy
enough to set up a website, it's not always so simple to understand
your legal obligations.
At a recent legal seminar at eBusiness Connection (eBC), Corey Piché
of Piché and Co. outlined three main areas on which to focus
when setting up a business online: Internet content, business operations
and privacy protection.
When looking at content, Piché said the most common problem
is copyright or trademark infringement. He reminded the audience
that every image found on the Web is privacy protected and that
even website layout or color scheme may be trademarked. So think
twice before using someone else's design on your own site and, if
you do have photos that you don't want misused by other people,
consider getting special software that embeds a watermark in your
image which can be traced anywhere on the Internet.
If you do run into any copyright problems, try to come to an agreement
without going to court, Piché suggested. "You cannot
run a business if you're busy fighting a copyright lawsuit,"
he warned.
As well, if you link your site to another web address, you should
be certain that the other business is reputable. People might see
such a link as an endorsement of another product or service and
if customers get mad at the other company, they might take action
against you, too.
Know your business
In terms of business operations, you should be very clear on your
website about what service or product is being offered (offering
a service may require a different type of contract than selling
a product), who the buyer and seller are, what the terms of purchase
or sale are and which national laws apply. For example, what happens
if a sale is made from a private vendor in Canada to a corporation
in Peru? Which laws will apply? And what if a product is damaged
in transit? Who is responsible for buying insurance? Who pays to
replace the item? Under certain laws, once a transaction is done
(i.e., once payment by credit card is made online), the customer
assumes responsibility of ownership – and therefore responsibility
of replacement. And what if a buyer is a corporation or business?
That actually makes a difference if the product stops working upon
receipt. In some cases you, as a seller, may be protected, in others,
not.
"Believe it or not, in some instances, depending where the
head office [of the vendor] is, if you buy something for your business
and it doesn't work, for example, a printer, you may not have recourse,"
said Piché. He added that increased e-business means that,
"The key to understanding a buyer is no longer based on seeing
people face-to-face. You have to have some other way of knowing."
The wild, wild West
Moving into the area of privacy laws, Piché outlined several
issues that are of concern and emphasized the difference between
Canadian provincial and federal laws, as well as the difference
between Canadian and American privacy laws. According to Piché,
provincial and federal privacy laws do not "match" each
other, so it's up to a vendor to be familiar with all legislation
in order to see which is more stringent. As well, while some customers
are protected under privacy laws in Canada, the United States is
like "the wild, wild West," said Piché. "Their
privacy/policy laws are not nearly as strict."
Some examples of Canadian privacy laws include no collection of
any personal information without consent from the person from whom
it is collected, informing the person what the purpose is for collection
of such information and using the personal information only in the
way for which consent was given. Businesses that do collect personal
information, such as names, mailing addresses and credit card numbers,
are expected to take every reasonable precaution to protect that
information from hackers. Consider also that if the site you are
developing may be resold, it is important to notify clients that
the information they provide online may be acquired by another company
in the future.
Learn online legalese
Once you have determined the possible legal pitfalls your online
business can fall into, start putting up agreement forms and privacy
statements on your site. Those are the ones you've seen on commercial
sites that go on for 40 pages in six-point font and force you to
click "I agree" in order to proceed.
These types of statements could be dealing with copyright, reminding
visitors that all site content is owned by your business and is
only available with permission. They may have an explanation (for
your own protection) of who the vendor is; they may deal with the
conditions of goods sold or price, payment and delivery; they would
probably state which laws (Canadian/other, federal/provincial) apply
and they would also need to state your site's privacy policies.
Privacy policy statements actually hold a more sacred status than
most in Canada and should be accessible from every page of your
site. These contracts and policy statements will have to be set
up by a lawyer and tailored to each business. Expect to pay from
a low of a few hundred dollars to more than $1,000 for setting up
these contracts, Piché said.
Before you head to your lawyer, however, take advantage of free
advice, seminars and online services that are available for small-
and medium-sized businesses. For privacy policies, for example,
visit www.nymity.com/pipeda/pipeda.asp;
for free online advice, contact the Pan-Western E-Business Team
at www.e-west.ca;
for the Canadian Legal Information Institute, visit www.clii.org;
for local Small Business B.C. and eBusiness Connection (eBC) seminars,
visit www.smallbusinessbc.ca.
EBC now offers ongoing Legal Lunch and Learn sessions. Every second
Tuesday at the Small Business Centre, 601 West Cordova St., eBC
has a local lawyer, specializing in technology law, deliver an e-business
topic from noon to 1:30 p.m. For the seminar schedule, visit www.e-bc.ca.
EBC was created in response to the demand for more and better e-business
and e-commerce resources. It offers a collection of e-business information
services to help British Columbia's small businesses adapt to technological
change and maintain and grow their businesses. As an example, eBC
offers a Call a Lawyer referral service, where small business owners
receive up to a half-hour consultation for $25. More information
can be found at www.bccba.org
or at www.e-bc.ca.
Baila Lazarus is a freelance writer, photographer and
illustrator living in Vancouver.
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