Do you have What it Takes to Start an Online Business
An online business is any business on the Internet that sells products, services, or advertising, online. The difference between a website and an online business is that the latter sells something using the global communications infrastructure of the Internet.
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Depending on the business model, different online businesses will face different legal risks. For example, if you decide to launch a specialized social networking site wherein users can register and upload content, then you must be aware of the protections afforded by the Digital Millennium Copyright Act (“DMCA”). The DMCA affords an online business a considerable amount of protection if certain processes and procedures are implemented and followed. What kind of protections does the DMCA provide? It provides protection (i.e. a “safe harbor”) against third party copyright liability for content that your users upload that may infringe on some other person or entity’s intellectual property (i.e. copyright). The safe harbor is provided only if the online business implements, and follows, the statutory requirements of the DMCA.
The critical question here is not simply having the “right” legal language in the various agreements (e.g. your terms of use) but rather whether the business has implemented and followed the business processes that underpin the language. Courts are not fooled by “flowery” contractual language but rather want to know what the business did in fact (e.g. did it do what it said it would do in its terms of use). It is imperative that an Internet Lawyer advising an online entrepreneur understand the underlying processes that must be implemented and followed, in addition to the required contractual language.
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