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Internet Law Lawyer and Internet Law Lawyers

Okay, you have an idea how to make millions with your new online business, but you don’t really know where to start. The FIRST CONSIDERATION is to determine the level of risk you are willing to shoulder. Everyone has a different threshold beyond which risk exceeds reward. So, when you think you know the reward, all you need to know is the risk, and then you can make a decision. You can’t look on the web and conclude that since others are doing “it”, “it” must be okay. Do you really know what risk level the other sites’ owners are willing to assume? How do you know the owner is not an 18 year old with no assets and nothing to lose? How do you know the owner’s credit isn’t already shot? How do you know where the owner, or his property, is located? How do you even know that the site used an Internet law lawyer or Internet law lawyers as legal counsel and guidance? You don’t. You may think you do, but you most often don’t. This leads to rule NUMBER ONE:

1) Never assume that because others are doing “it”, that whatever “it” is must be legal or without civil or criminal exposure. If you do, then you can visit some of our other pages to learn about the implications, and you should contact us because you might need an Internet law lawyer shortly.

The SECOND CONSIDERATION should be a true assessment of how much you have to lose if you don’t do things right. What assets do you have personally? If you think that forming a corporation will shield your personal assets, think again. Usually a corporation will only protect contractual obligations not resulting from fraud, and even in contract matters you may be obligated in the contract personally, you may undercapitalize your corporation, or you may not follow corporate formalities, all of which could lead to your personal liability. So, rule NUMBER TWO.

2) Consider that your wealth and assets, and future income, may be at risk even when you incorporate, so take a good look at your balance sheet. And, if in doubt, we can assist you in this assessment as Internet law lawyers.

Once you know your idea and have a good handle on what you have to lose, and you still want to go forward, then get a risk assessment of your business from your lawyer. Don’t just review the basic business nature, but also your anticipated practices. Do you intend to use an affiliate marketing program? Will third parties be able to post information on your site? Will you be relying on third party vendors to build and/or market your site? NUMBER THREE:

3) Consult a qualified and experienced Internet law lawyer to understand the legal issues and pitfalls you face in running your business. We call this a “website audit” although it is really an “e-business review”. Don’t just wing it or you will likely find that the cost of an Internet law lawyer to fix problems is more than you would have paid in the beginning to do it right in the first place.

Now that you believe in your business model, you understand what you have to lose, and you understand your risk factors, it is time to go to work in earnest building your fortune! Oops, not so quick. Go back to the drawing board, and write down your business model (a full business plan is needed if you intend to raise capital). Include at least the basic business considerations such as why your product or service is needed, how much others are willing to pay for it, how much it will cost to market it, who your competition will be, and also recognize that whatever you do will likely be copied (and possibly stolen) by many companies worldwide once you start becoming successful. You will create your own competition if it does not already exist. During the Internet bubble of the late 90s venture funds loved a company with a solid business plan and a “first mover advantage”. The marketplace forgot for a time that pioneers get arrows in their backs. NUMBER FOUR:

4) Pioneers get arrows in their backs! We can assist you with your business plan as Internet law lawyers, even offer some value add in terms of business guidance, but you will need to write the business plan.

Barriers to entry are critical for a first mover. Ask yourself how difficult it will be for someone to attack your business by launching a competitor. What strategic advantages do you have? Money could be a big advantage since you could ramp up your business at such a pace that you can distance yourself from future competitors, and even discourage competition. If you are launching a business that is easy to replicate, ask yourself if you have skill sets available that will allow you to gain an advantage over the world. Low overhead and low product cost could enable you to undercut the market pricing of a product or service, but that will likely be short lived, unless you are a manufacturer and intend to take out the “middleman”. NUMBER FIVE:

5) Don’t launch a new business with the core driver being lower prices if you are not the manufacturer. Unless, of course, you can tie up the distribution channel either as a retailer or as an exclusive distributor. As an Internet law lawyer, we can assist you in navigating this road.

Okay, your idea is ready to go, you have a document with the key financial details of producing, procuring, selling and delivering your product or service, you have a solid plan to market to consumers who will be willing buyers, you have your legal opinion helping you to understand the risks, and you have decided to proceed with the gestation cycle, so to speak. What next? It depends. If you are willing to proceed as long as your risk is negligible, then you need high quality Internet law lawyers. If you are a risk taker, the good news is that many an entrepreneur has successfully launched an online business with no Internet law lawyer or legal counsel at all! The bad news is that many an entrepreneur has ended up in financial ruin, and some have even ended up in prison. Nine years in prison for spamming (as we have recently seen) is a message every businessperson should understand. A billion (yes that is a “b”) dollar lawsuit against a middle class couple is another message that you should understand. Here is the question. NUMBER SIX:

6) Do you feel lucky enough, or secure enough, to take the risk without excellent Internet law lawyers?

You will not only be asking this question now, but also continually throughout your business existence. Good business people develop a sense for when an Internet law lawyers are necessary. This “good sense” is really a constant risk/reward assessment. The decision will obviously be a very personal one and is influenced by many factors. Some businesses try to avoid Internet law lawyers altogether, some hire their family lawyer to help out, and some hire an Internet Law lawyer when a potential legal issue arises. NUMBER SEVEN:

7) Develop a “feel” for when an Internet law lawyer is needed.

How do you know when our Internet Law lawyers are really needed? The following is a walk-through of the legal issues a client faces when launching a start-up. Don’t be intimidated by the details, since some will or will not apply, depending on a number of factors. Unfortunately you probably need a highly experienced Internet law lawyer to tell you what you might need in your circumstances.

BUILDING YOUR SITE

Don’t just sign the contract a web developer gives to you. We represent web developers. We have drafted many of these contracts for them. We also represent website owners, and have drafted many contracts for them. There are many issues website owners don’t understand, including even the ownership of the work you are paying your developer to create. For instance, the odds are high that if you just sign a developer’s contract you will not even own your website or have access to your source code for changes. Make sure the scope is clearly defined, or you will often find that many aspects of the project are considered “changes”, for which you need to pay.

How do you define the scope? One of my e-businesses spent $125,000 on a document setting forth the requirements of a project. Big companies use the “life cycle development” approach, paying for a “scope document”, then a “requirements document”, then a “functional specifications document”, which all lead to the actual coding, and then “unit testing” and “acceptance testing”. Obviously this approach provides plenty of specifics of exactly what is to be done (the deliverables), and pricing is generally quoted after each documentation stage. As a small business, you can’t afford to do this. But you can define terms adequately to get a reasonably good idea of the project expectations, and negotiate language that will save you real money, time, effort, and frustration.

PICKING YOUR NAME

Don’t just go out and assume that since a domain name is available you can use it. Don’t assume that since you got a local business license or the name was available at the state corporation commission that you can use it. Don’t even assume that by looking at the trademark registrations online that you can figure out whether you can use your name. Always get a trademark clearance from a qualified intellectual property attorney. This involves a search of many different resources. Then, once it is cleared, file for the trademark registration. There is a science involved in picking your domain name and business name that is less legal and more strategic or tactical in nature. Your attorney should be able to explain to you when to stay away from a particular domain name because of ownership of other domains by third parties, and how to protect your domain name by acquiring similar and derogatory names. There are also issues relating to specific registrars that need to be considered when you are deciding who you will trust with warehousing your names.

SELECTING A WEB HOST

Understand the level of support and performance you will need, and then go out and find hosts that can deliver hosting services in a high quality way. You will need to determine “down time” expectations, know the difference between three nines and five nines, understand performance standards, response times, and the overall relationship your web host is offering. Sometimes you have to take the contract as presented since the monthly costs are usually very low and separate web host contract negotiations are impractical. If you are serious about your business stay away from the $9.99 web hosts, and invest the $200 each month to get excellent hosting. It will pay for itself in a short period of time, and as a budding successful entrepreneur you don’t need to be worrying about your site being down for extended periods of time or hackers getting into your server.

LAUNCHING YOUR SITE

You will need a user agreement to protect your company, situated on your site in such a manner that it is binding on every visitor. California requires all web sites (including just about every site in the US) to have a privacy policy, which often requires a detailed discussion of your intended treatment of your personally indentifiable data. Don’t just conclude you won’t share the information with anyone. Once you have that in your privacy agreement it is hard to change it, and this is an involved and complex issue not fully understood by just about any new business. Suffice it to say that you have to live by your promises in the privacy policy, and saying the wrong thing could cost you dearly. Have a full legal review performed of your site by Internet law lawyers to identify any misleading or ambiguous advertising (everything on your site is advertising in the minds of the Federal Trade Commission), determine whether you will be immune from defamation claims, decide whether you should register to protect yourself against copyright infringement claims, and assess privacy, underage access, and other regulatory compliance issues.

HIRING EMPLOYEES/CONTRACTORS

First rule is to never hire a contractor to do any programming or design work without a written contract or you may find the work you paid for being legally used by your competitors because the contractor owns it. Each employee/contractor should sign a confidentiality agreement, an assignment of intellectual property, and a non-compete agreement. You’ll need an Internet law lawyer to assist you. Anyone with rights to stock options, warrants (contractual right to buy stock in the future at a pre-determined price), or a share in the business needs to have a contract covering that compensation. Stock options and warrants are legal instruments and before you start awarding shares to people make sure you have your attorney draw up the necessary paper work to avoid ownership disputes or unanticipated tax consequences.

MARKETING YOUR SITE

This is the highest risk area for you and your business. Understand what you can and cannot do in marketing online. If you are hiring an online advertising company or any third party (particularly affiliate marketers) establish a process of due diligence, performance standards, and compliance assessment. In other words, have all of your affiliates and advertisers sign a contract, and then make sure they follow their promises. Laws make you personally liable for some misconduct by your affiliates and contractors. There are many variations of liability in the online advertising world, many of which we see daily in our litigation practice. Over half of our practice as Internet law lawyers is related to affiliate and online marketing. Have affiliate contracts drafted, learn about how to conduct due diligence, establish performance standards, and then monitor compliance and understand the enforcement options. This area is by far the most complex and sophisticated aspect of compliance and avoidance of liability, and if your attorney is not an expert in online advertising, find an excellent Internet law lawyer.

GROWING YOUR BUSINESS

It’s all about allowing you to focus on growing your business. Litigation slows you down. Judgments ruin you financially. Unhappy customers will blog about your business. So, if you are risk averse, keep it clean and do it right the first time. Because, in the online world, you probably won’t get a second chance.

Articles by Internet Law Pioneer John Dozier:

Download PDF File Internet Businesses: Pioneers Still Get Arrows in Their Backs

Download PDF File Ten Simple Ways to Get Sued

Download PDF File Getting a Patent Is Pricey. Considerations You May Not Hear From Your Patent Lawyer

Download PDF FileThe Law of Data and Information Security: Merchants Are Responsible; Possible “Economic Ruin”

Download Adobe Reader to view the PDFs.

Want to see our take on the most important Federal lawsuits dealing with the Internet and start-ups filed last week? A very common practice is for an established business to sue the start-up business before it gains traction and becomes a viable competitor. We monitor the country daily and offer our thoughts about the cases, so we suggest you explore the left navigation bar and take a look at the cases that are being filed right now. You’ll learn a lot about what to avoid and how to survive as a start-up.

View Traverse Internet Law’s blog entries on Internet Start-ups:

Internet Law Lawyer and Internet Law Lawyers

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