The Common Law

Legal Issues for Website Owners (Part 2)

"The Common Law" for April 3 introduced several legal issues for business owners with websites and focused on copyright concerns. This week's column concentrates on trademarks and the use of false or misleading statements, and next week we'll note some issues surrounding domain names and linking to other websites.

Trademark law deals with the protection of names, slogans, logos, and other devices that "mark" a particular good or service as being from a particular manufacturer or seller. Trademarks help consumers distinguish one company's products from another's. Trademark infringement happens when you use another company's trademark in a way that creates a likelihood that consumers will be confused about whose product you're selling or whether you're being endorsed by the trademark owner. For example, if you sell vending machines and post photos of Coke and Sprite cans next to your machines, the Coca-Cola Co. might argue that your website visitors will be confused about whether Coca-Cola endorses your vending machines since you've used its trademarks. Additionally, the law is still unsettled about the rules for using someone else's trademark as a "keyword" for triggering click-through advertisements with a search engine (such as Google's AdWords system).

Website owners also must be careful with what they say about their own products, their competitor's products, and other people. Legally, it's fine to make product contrasts – as long as your statements are truthful and not misleading. But the practical reality is that some competitors and consumers might not see things the same way you do. Your statements about others may open the door to a suit for defamation, which involves false statements made about individuals or companies that damage their reputations. Further, website statements about your company and products could invite claims for false or misleading advertising and for claims under consumer-protection statutes. So tell the truth, and understand that litigation is always a risk, even for honest companies. The best practice is to have a lawyer review your site and prepare website terms and conditions to help reduce the risks of being sued. You owe this to your company.