Website Development Contracts (and tips for software development deals too) 

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Many companies do not have the capabilities, resources or desire to produce a website.  They need help with their website efforts.  They must necessarily rely on independent website developers. 

Companies (and individuals) often move forward with an independent website developer without a written contract to govern the relationship.  I’ve been asked to get involved as a lawyer in numerous website projects gone wrong in which the only signed writing is a vague set of specifications and a bottom-line price. 

Before hiring a website developer, the company should first develop a clear vision of what the website will do.  A company that knows what it wants typically gets it.  Open-ended or vague specifications do not benefit the ongoing relationship at all.  Someone is generally unhappy when the website project is ill-defined. 

The starting point for developing a clear vision for the website is to consider what the website will do.  Does the company merely wish to use the website for advertising? Or does the website sell a product or service through the company’s online catalog?  Will users of the website generate the content—like what happens on Pinterest, Facebook or YouTube?  Knowing in advance what the website will do shapes the agreement between the company and the website developer.

A website development agreement may, and probably should, address the following:

  • Services. The agreement should describe the scope of services that the developer will provide.  The company may want detailed schedules that describe the work to be done and the time frame for delivery. Some contracts or incorporated exhibits have layouts of the entire website.  I saw one recent contract in which the layout of each page was put into a PowerPoint presentation and attached to the agreement.     
  • Cost. The project could be billed hourly or by the task.  Some deals say that the developer gets paid at the conclusion of certain periods of time—like the end of each month.  When I represent businesses that want a new website, I generally draft the agreement so that payments are tied to specific objective milestones, and not the passage of time.  I have generally found that such projects move forward faster.  
  • Intellectual property ownership and protection. The agreement should specify who will own the website content.  Work made for hire language that addresses the critical issue of copyright ownership may be appropriate.  The issue of ownership is often overlooked to the frequent detriment of the company.  Generally, in the absence of a written contract providing otherwise, independent website developers (independent contractors by definition) own the intellectual property they bring to a website even if the company pays for the website work.  A detailed discussion of the intellectual property issues involved in the typical software and website development deal exceeds the scope of this article.  The attorney who drafts website development deals will want to have a good understanding of the relevant issues.     
  • Technical considerations. The agreement may set forth the software the developer will use.  Websites need to be readable and glitch-free on all of the major Internet browsers, including Explorer, Chrome, Firefox and Safari.  Websites should be smartphone-friendly too. 
  • Advertising and promotion. The agreement may provide that the developer will promote the website, place advertising on the website, or both. Many people use search engines to find websites, and the agreement could obligate the developer to list the website with search engines or perform tasks that make the website “search engine optimized.”  The website developer may want to include an acknowledgement on the website to highlight its work.
  • Hosting services. Some website developers possess the capability to host the website. If so, the agreement should set forth the terms of the hosting arrangement.
  • Updates and new features. Companies often wish to change the content, functions and features available on their websites. If the website developer will retain responsibility for updates and modifications, the agreement should set forth payment terms and schedules appropriate to the circumstances.

These are just a few of the terms a company may want to include in the website development agreement. Ultimately, the agreement should be tailored to the company’s specific needs and preferences and anticipate the issues that may arise during the life of the website. 

FTC Publishes New Online Advertising Disclosure Guidelines

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The new FTC guidance .com Disclosures: How To Make Effective Disclosures In Digital Advertising can be found by clicking here.  Among other things, the guidelines address the application of the clear and conspicuous disclosure rules to online advertising.  The guidelines acknowledge the multiple ways that consumers access internet content and the expanding use of handheld devices and smartphones with small screens.  Regardless of the device used by the consumer to access the content, disclosures should be prominent (not buried) and in appropriate proximity to the relevant claim.  
Many websites put disclosures in hyperlinks.  The guidance stresses the importance of appropriate labels for such hyperlinks.  
The FTC guidance should be required reading for online advertisers.    

The Emerging Copyright and Publishing Law for Writers seminar

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This Saturday (May 18) I will be giving a seminar on copyright and publishing law to the Panhandle Professional Writers organization in Amarillo.   The seminar is titled “The Emerging Copyright and Publishing Law for Writers.”  This seminar will be held on Saturday, May 18, 2013 from 10:00 a.m. to 3:00 p.m. at the Amarillo Senior Citizens Center, 1217 S. Tyler, Amarillo, Texas.  Check-in starts at 9:30 a.m.
PPW always inspires me.  I really enjoy being around creative people!  This seminar has been an annual event for PPW for four consecutive years.  The audience participation and questions are always great.
If you are interested in attending, there is a $10.00 charge for the meeting plus an additional $10.00 fee for lunch.  You can make reservations by calling Donna Otto at (806) 681-4181 or by e-mail to ppwlunch@gmail.com.  I hope to see you there!  
You can learn more about the program by clicking here: http://www.panhandleprowriters.org/bimonthly-programs
You can learn more about the Panhandle Professional Writers by going to their website at http://www.panhandleprowriters.org/home
Thank you to PPW for making this happen!  


Can Someone Own the Copyright To the Batmobile?

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I’ve been looking for an excuse to blog about the upcoming third-installment of the Batman movie series directed by Christopher Nolan.  The Dark Knight Rises is set for 
a July release   Here is the trailer from YouTube.  I put Nolan’s first two films in the series, Batman Beginsand The Dark Knight, on my personal list of Top 10 Movies.  Yes, I like these movies that much.
Here is my excuse for blogging about Batman: a federal judge has ruled that Batman’s techno-ride, the Batmobile, may be subject to copyright protection.  Click here for the story.

Tootsie Rolls and Cockroaches

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Tootsie Roll is a candy and the subject of a trademark lawsuit and a funny personal story.  First the more serious trademark tale.  Tootsie Roll is, of course, a well-recognized trademark. Can the makers of Tootsie Roll prevent a footwear company from using the name Footzyrolls?

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What do you think?  Here is a picture of the products: 

The makers of Tootsie Rolls recently sued the company that makes Footzyrolls, footwear that can be rolled up.  Trademark infringement usually occurs when one party uses a trademark similar enough to another party’s mark that consumers confuse the two parties’ products or services. But can a case be made if the goods in question are very different, like candy and footwear?  Yes, if the mark being infringed is considered famous.  This is called trademark dilution.  For more information on trademark dilution, read this article.

Here is the personal Tootsie Roll story.  When I was about 14 years old our family took a vacation to Florida. One night on the trip we were hanging out in the hotel room. My parents had bought my younger sister and me a bag of the bite-size Tootsie Rolls. Like most siblings we had to make sure the bag was split exactly even.  One for her – one for me.  Two for her – two for me.  You get the point.  The division of the bag was completed successfully.

After I left with my portion of the goodies, my sister noticed something on the hotel room floor. A small brown object. She beamed with joy believing I had dropped one of my precious candies and that she could claim it as her own. She greedily picked it up and discovered it was not a Tootsie Roll at all; it was a dead cockroach!  She screamed. I laughed. Really hard. We still laugh about it now.

By the way, Roach Motel is a federally registered trademark for roach traps and not the high-quality hotel my parents selected.

Apparently You CAN Mess with Texas

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The Texas Department of Transportation (TxDOT), owner of the mark DON’T MESS WITH TEXAS, recently sought a restraining order against the bookstore chain Barnes & Noble, Grand Central Publishing, Hachette Book Club USAand author Christie Craig over the sale

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of Craig’s romantic novel entitled “Don’t Mess With Texas“.  U.S. District Judge Sam Sparks denied the order and cited First Amendment rights, the relatively small amount of revenue involved, and the diversity between good and services.  Although TXDOT owns registration in the slogan for a wide variety of printed materials, books is not one of them.

For more details about this case, read the article, “Judge: Author Can ‘Mess with Texas’ All She Wants“.

Dot-com, Dot-net and … Dot-anything

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For the last two decades, there have been a relatively small number of generic top-level domains (gTLDs) on the Internet. A gTLD is essentially the part of the domain name after the dot. But the number of gTLDs is about to increase dramatically.  On June 20, 2011,
the Internet Corporation for Assigned Names and Numbers (ICANN) announced that beginning on January 12, 2012, companies and organizations will be able to register virtually any gTLD they choose – for a price. The initial registration will be $185,000, with an annual renewal fee of $25,000.

For details about the implications of this change, read the article “New Top-Level Domain Names Available”.

SEAL Team 6: Whose Trademark Is It?

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The elite special forces of the U.S. Navy known as the SEALs have a nearly 50-year history of being the go-to teams for difficult small-unit military operations. So it came as no great surprise that SEAL Team 6 was the unit that stormed the compound of Al Qaeda leader Osama bin Laden on May 1, 2011.

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A well-known company decided to capitalize on the attention given these brave heroes so soon after the incident, but faced with negative publicity, abandoned its efforts.

On May 3, 2011, three intent-to-use applications for the trademark SEAL TEAM 6 were filed on behalf of Disney Enterprises, Inc. of Burbank, California. The applications were for such diverse goods and services as clothing, toys, gymnastic and sporting articles, and even Christmas tree ornaments and snow globes. Although federal trademark registration requires use of the mark in commerce, applications can be filed prior to such use if the applicant has a bona fide intent to use the mark in the future. Once the mark has been deemed registrable by the examining attorney, the applicant has six months to allege use. For a fee, this deadline may be extended at six-month intervals up to a total three years, after which the application is considered abandoned. In 2010, a little more than half of all trademark applications filed with U.S. Patent and Trademark Office were intent-to-use, but to date less than 10 percent of those applications have matured to registration. By filing so early, Disney Enterprises was attempting to stake out its ownership of the mark for the goods and services claimed before anyone else does. But the public reaction to the applications were so negative that by the end of May, Disney filed express abandonments of all three applications. Several other applicants also filed for the trademark SEAL TEAM 6 or variations, and as of the writing of this post, at least four applications were still pending.

However, a search of the records reveals that Disney was not the first company to seek federal registration for the SEAL TEAM 6 trademark. In 2002, NovaLogic, Inc. of Calabasas, California applied for trademark registraiton of SEAL TEAM 6 for a variety of video game software and on-line computer gam eservices. In 2004, NovaLogic filed another application, this time for action figures and their accessories. Like Disney, NovaLogic filed its applications on an intent-to-use basis, and even though both applications were cleared for registraiton, the mark was abandoned for failure to allege use in the requisite amount of time.

Intent-to-use trademark applications can be a useful way to reserve a mark before it is used in commerce, but there are limits on how long that reservation can last. And once such an application has been abandoned, it clears the way for others to seek registration of the mark.