The following is a guest post from fnBlog Contributor Matthew Faustman, founder of UpCounsel.
In this day and age, user generated content is a large part of our technology products. As such, this raises issues like Copyright infringement and privacy, which can expose web and mobile application entrepreneurs to extensive liability.
There are steps that we can take, however, to limit our exposure to liability. Below is a discussion of these preventative steps – usable by most modern websites that collect user data or host user generated content. By no means is this list exhaustive – each situation is unique and we highly advise that you consult a seasoned Intellectual Property (“IP”) attorney when considering these protections.
Really great TOUs are drafted to meet the individual specifications of a website. They have powerful implications and should not be taken lightly. For a full appreciation of a TOU, see this post by IP attorney Jill Bowman (its pretty amazing).
Some of the major flaws in TOU agreements are related to the protections that people seek under the Digital Millennium Copyright Act (“DMCA”) as explained by startup guru Dana Shultz in his blog post on the issue.
Some major considerations for a TOU – Contributed by Jessica Hubley, Esq.
- Limit the site’s liability to users to some very small dollar amount (e.g., $10 or fees actually paid for services in the past 6 months);
- Have the user indemnify the site for any third party claims arising from their use of the site; and
- Include an arbitration clauses to reduce class action suits.
2. Comply With The DMCA
The Digital Millennium Copyright Act (“DMCA”) provides web and mobile application owners protection against liability for copyright infringement resulting from content uploaded by third party users. Providers, however, must comply with the DMCA to be eligible for such Safe Harbor. For more information on this topic, see another great post by Jill Bowman. Below are two things your company can do to help fall under these Safe Harbors.
- Register With The Copyright Office
The Company must apply as an online service provider and designate an agent with the Copyright Office to properly rely on the limitation of liability from copyright infringement under the DMCA. Additional information is available at http://www.copyright.gov/onlinesp/.
Most modern web and mobile application TOUs are written to rely upon the DMCA limitation of liability. If your TOU does rely upon the DMCA, then you should take these precautions. Again, consult an attorney versed in IP law for proper compliance.
- Institute (and diligently follow) A DMCA Policy
Which can include: 1) A working notification system (if a copyright owner tries to find you – they can), 2) a procedure for dealing with complaints from copyright owners regarding infringing content on your website, 3) a system that allows copyright owners to collect the information they need to issue DMCA complaints.
In most cases, someone’s name, address, email address, and telephone number are considered personal information. Health information, sexual orientation information, location information, and financial information (among others) may be considered “sensitive information” as well as “personal information,” and may be subject to more stringent protections both in tort and by virtue of specific statutes such as the Health Insurance Accountability and Portability Protection Act (HIPAA) or the Fair Credit Reporting Act (FCRA). (Contributed by Jessica Hubley, Esq.):
- What types of information the company or website collects;
- How the company or website uses that information;
- With whom the company or website shares that information; and
- How the company or website secures that information.
Matt is the co-founder and CEO of UpCounsel (www.upcounsel.com), a legal services marketplace. UpCounsel makes it easy to find and hire a great attorney for anything. Matt started his career as a startup and venture capital attorney.