Your guide to detecting and managing the online risk
E-commerce
Online sale of branded goods
If you are buying branded
goods from outside the European Economic Area for resale via an
online shopping service within it and the goods have not already
been marketed here, check that the trademark owner has consented
expressly to the marketing you propose to carry out. Otherwise, you
risk a claim for trademark infringement.
E-commerce terms and conditions
To avoid being
contractually bound to fulfil orders for goods or services
advertised at incorrect prices, reserve to yourself the right not
to fulfil or to cancel orders in the event of obvious inaccuracies
in prices
To give yourself the flexibility to refuse orders (for example if
you have a limited stock or do not want to be contractually bound
to every person who visits your Web site) state in your terms and
conditions and/or otherwise clearly on the Web site that:
- The customer's order constitutes an offer to buy the
goods/services in question
- The purchase contract is concluded at the point at which you
send an acceptance/confirmatory e-mail
To ensure that you can enforce your terms and conditions against
consumers:
- Bring the terms and conditions to their attention. A dialogue
box containing the terms and conditions which the consumer has to
scroll through and click "I accept" is best from a legal
perspective
- Keep electronic copies of concluded contracts. This evidence
will be required if disputes arise.
Electronic Commerce (EC Directive) Regulations 2002
Refer to draft Electronic Commerce (EC Directive) Regulations 2002
expected to come into force later this year.
To avoid consumers being able to cancel their online contracts with
you ensure that:
- Your terms and conditions are available in a form that
consumers can store and reproduce
- Acknowledge receipt of orders without undue delay and by
electronic means - by sending a confirmatory e-mail
- Ensure that consumers can identify and correct input errors
before placing their orders.
Consumer Protection (Distance Selling) Regulations
2000
Ensure that your terms and conditions and/or pages
of your Web site include the following information and that this
information is confirmed, together with details of the customer's
order, by letter, fax or e-mail, following conclusion of the
contract:
- Your full company name and address
- A description of the main characteristics of the goods or
services
- The all-in price of the goods or services sold
- How much it will cost to deliver (or return) the goods
- How the customer pays for the goods or services and the
specific delivery arrangements
- The customer's right to cancel, how they return the goods and
information on after-sales services or guarantees
- How long the contract will remain valid. You will not be able
to enforce the terms of any contract which are inconsistent with
these regulations.
Juristriction
Refer to The Brussels Regulation, which
came into force on 1 March 2002.
To avoid being sued by consumers who are protected by online
contracts operating in their home territory:
- Make clear on your Web site the countries your business is
targeting
- Use technological means to prevent consumers from unwanted
territories placing orders
- Consider introducing mediation clauses in your terms and
conditions to resolve disputes with consumers without recourse to
the courts
- State your preferred choice of jurisdiction in your terms and
conditions.
Given the global reach of the Internet, you could be sued for
infringement of third-party rights in any jurisdiction in which
your Web site can be accessed or has a connection. This risk
increases the more interactive your Web site is.
Operating the site
Domain names
Undertake trade mark searches before registering a domain name to
avoid conflicts with trade mark owners
If you discover a potential conflict, seek agreement of the trade
mark owner to avoid problems, such as actions for passing off
Country code top-level domain names - countries outside the UK may
have a local business presence requirement.
Linking
Get permission before linking to a third-party
site. This can be achieved by an e-mail request or formal linking
agreement dealing with reciprocal links and any payments that may
have been
When linking to an external site make this clear to avoid
accusations of passing off and to distance yourself from unsuitable
material on the linked to site. For example, word your link "See
the Computer Weekly Web site", rather than "For more information
click here"
Consider restricting linking to your site in your terms and
conditions
Do a "link search" in a search engine to check which sites have
links to your own Web site: search for "link:www.cw360.com"
Only link to the home page of the target site. This overcomes
objections to "deep linking" (bypassing the home page where
advertising and branding is most likely to appear)
Get permission to use the logos or brands of the target site next
to the link, to avoid claims for trade mark or copyright
infringement
If you are getting a third-party to develop your Web site for you,
ensure the Web site development agreement provides that no links
may be added to the site without your consent to avoid the
developer getting you into trouble.
Framing
Always get permission. Framing by its nature
is more likely to be confusing to the consumer and therefore more
annoying to the target site.
Hosting of Web site
Consider including the following in
your agreement with your service provider:
- A right of termination that is triggered upon reasonable notice
of bad news relating to your service provider such as stories of
financial difficulties or layoffs;
- Provision for assistance with the transition from one host
service provider to another.
Insurance
Ensure that your existing insurance policy
covers your Web site activity.
Interacting with site users
Data protection
Check to see if you should file a data protection notification. If
you are using your Web site as more than just an advertising tool
you will probably need to do so.
Consider producing a data protection policy or manual to ensure
internal compliance with data protection legislation
Privacy policies are useful for complying with the Data Protection
Act requirement for data to be processed fairly
Consider including in your privacy policy provisions to obtain
consent from consumers to the use of their personal data for:
- Passing data to third parties in the event of sale of the
company (as in the sale of the customer database by boo.com
liquidators)
- Transferring data outside the European Economic Area
If you collect data via your Web site, consider encrypting it - the
Information Commissioner does not consider unencrypted data to be
sufficiently secure
If you are using covert surveillance devices, for example traffic
data, Internet Protocol addresses, Web bugs and/or cookies, inform
users of this fact, except where these devices are used to
aggregate patterns of Web site usage which cannot be linked back to
a particular individual
Ensure your privacy policy and notices are clearly positioned on
the Web site. Highlight data protection notices at the point of
collection of the data
Disclaimers, notices, terms and conditions
Consider
displaying on your Web site and bringing to the attention of users
the following:
- Terms and conditions of use of the Web site
- Privacy policy
- Copyright notice
- Disclaimer limiting liability/jurisdiction
- Frequently asked questions
- Complaints procedure.
Chat rooms, bulletin boards, interactive element
If
your Web site includes a chatroom area, bulletin board or
interactive element, consider:
- Implementing procedures to monitor the activities taking
place
- Including special provisions in your terms and conditions
disclaiming exercise of editorial control
- Implementing procedures to deny access to the Web site to users
who breach your terms and conditions and/or have a bad user track
record.
Advertising
Distinguish fact from opinion
Be clear, fair and honest, do not mislead or confuse
Compare like with like to avoid breaching the comparative
advertising regulations
Do not disparage, denigrate, discredit or take unfair advantage of
a competitor's goods and/or services or reputation.
Metatags
Ensure that the meta-tags you use for your
Web site do not include the brand names and/or trademarks of third
parties, otherwise you may face an action for trade mark
infringement and/or passing off.
Web site content
General
Check whether there are any local language requirements in the
territories you are targeting and consider making available a
version of your Web site in the local language. France and Quebec,
for example, have local language requirements.
Copyright
If engaging a third party to develop your
Web site, ensure the development contract includes a clause
assigning all copyright in the Web site to you
If you include in your Web site content (photographs, images,
logos, text) which you did not create or in which you do not own
the copyright, ensure you have appropriate licences from the
copyright owner to use it in the way that you intend to
Regularly monitor search engines for unauthorised copies of your
Web site and any documentation which you may have available for
download from your Web site
Consider using a copyright notice on each page of your Web site to
deter the casual plagiarist.
Trademarks
Consider obtaining trade mark registrations
for your company name, logos, products/service names in the
countries which you intend to target with the goods/services and in
classes relevant to the goods/services you are providing
Consider routine monitoring for trade mark infringements (make
contact with local trading standards officers)
Consider adopting a trade mark use policy to ensure correct use of
your trade marks by employees and third parties
If you want to obtain a trade mark registration for the trade marks
you are using on your Web site, at the time of making the
application you must be able to prove to the UK Patent Office
either: active promotion of or firm plans to promote your Web site
to the UK public. Evidence of targeting UK customers would include
whether they can make online purchases and the currencies in which
the site trades
You will not be able to prevent a foreign Web site using marks
which are identical or similar to your own if that foreign Web site
is found not to be actively encouraging UK users to access the site
or is not deliberately targeting UK customers.
Compiled by Mathilde Heaton, a solicitor in the technology law
firm DLA