by Traverse Legal, reviewed by Enrico Schaefer - June 25, 2008 - i. Terms of Service Agreement Forms
Starting a tech company can be a costly venture, but copying another’s Terms of Service or Terms of Use agreement can be even costlier. Not only can a company be liable for copyright infringement for copying a Terms of Service or Terms of Use agreement, but using a standard form agreement can lead to extremely complex legal problems down the road. Terms of Service (ToS) and Terms of Use (ToU) agreements are a company’s main line of defense against third-party liability for vicarious or contributory infringement of copyrights or trademarks, and for defining the general contractual relationship between service provider and user.
A company can easily account for the cost of a Terms of Service or Terms of Use agreement during its startup by retaining an attorney that uses flat-rate billing. This allows a company to know exactly what it is getting itself into, and to perform a cost-benefit analysis of the cost, both in time and money, of going forward without a custom ToS or ToU agreement. Though §230 of the Communications Decency Act protects “interactive computer services” from vicarious liability for defamation, §230(e)(2) states that these providers are not exempt from liability for intellectual property infringement. Therefore, tech startups could find themselves facing vicarious or contributory liability for trademark or copyright infringement simply because they failed to set up an adequate ToS/ToU agreement or Digital Millennium Copyright Act takedown procedure.
Defining customized Terms of Use/Terms of Service, clickwrap, or browsewrap agreements tailored to your specific business model is one of the most important steps you can take to protect your business’s future. Failing to take this simple step at the beginning can result in exorbitant costs in litigation down the road, so it is important to contact a Terms of Service attorney intimately familiar with protecting your rights online.
As a founding partner of Traverse Legal, PLC, he has more than thirty years of experience as an attorney for both established companies and emerging start-ups. His extensive experience includes navigating technology law matters and complex litigation throughout the United States.
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.
