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EYE ON THE INDUSTRY

WHO OWNS YOUR WEBSITE?
By Lee Parks

Websites are now part of virtually every successful business. For karting retailers, they are slowly replacing Yellow Page ads as the primary means of attracting new customers. This is because ad space is not limited in the World Wide Web as it is in print. While that may be bad news for Yellow Page salesman, the Web represents the most dynamic sales growth opportunity today for anyone who is willing to put in the investment (mostly in time). Perhaps even more importantly, the Internet can be your 24/7 salesperson that makes a carefully crafted sales pitch every time, no matter the time or date.

If you don’t already have a website, shame on you! You need to get on it. But that is not what this month’s column is about. Many of the dealers I consult with are shocked to find out that what they thought was their property is legally owned by their technology provider.

According to noted Powersports-IP (Intellectual Property) attorney Andy McKinney of Liniak, Berenato & White in Baltimore, Maryland (amckinney@lblw.com), “many powersport retailers follow the path of least resistance when searching for a web development contractor and end up buying either a long-term relationship they didn’t want or a lawsuit over something they thought they owned.”

A typical web designer’s contract will not include a copyright assignment to the purchaser. If you are designing a website from scratch, this is critical language to include in the agreement to protect yourself. Otherwise, you may be surprised to find you do not own copyright in your own website once the job is done. Any omissions favor the contractor and leave your company open to copyright problems in the future.

It should be noted that this does not apply to specialized technology providers such as Powersport Network or 50 Below. In those situations, the template-based layout and sophisticated beck-end system containing proprietary database content remains the property of the provider.

A correctly drafted copyright assignment identifies the work to be assigned, the author/creator, the assignor (if not the author), and the assignee, and is recordable in the copyright office. A simple assignment can be added by the customer, but it is often a good idea to have an IP attorney make sure your Is are dotted and Ts crossed.

“The purpose of copyright law is to protect against the copying (stealing) of original creative information stored in a tangible medium, such as web content stored in a computer,” says McKinney" “Copyright protection is available for computer program code, but does not extend to the method, operational concept or idea executed by the computer program. Website text, artwork, sound recordings, mpeg videos and web-based video games are also copyrightable subject matter. Initially, the author or creator of the website is the owner of the copyright covering the website.”

If you provide the web developer with content of your own such as photos and text, and that content is incorporated into the website along with other images, then the website is what attorneys call a “compilation work”, which includes your work but is separately copyrightable, and so the web developer retains ownership of the compilation. This ownership interest can be assigned to others or can be licensed, in whole or in part. Remember that a license can be oral, but an assignment must be in writing to be legally binding.

One possible result of having no written assignment giving over the copyright ownership to your company is that the contractor may, in the future, require you to continue using the contractor’s services for the (inevitable changes and upgrades required to maintain your website from time to time. The contractor’s requirements would be supported by a claim of copyright ownership and an assertion that any efforts you or another contractor expend in maintaining the website will necessarily require someone to “copy” the website as a first step. Thus, the contractor’s implied threat of copyright infringement litigation could create an expensive, long-term relationship that you never wanted.

McKinney continues, “When I counsel clients in this situation, our first question is ‘have you made a final payment to the contractor?’ In my experience, web development contractors will usually agree to sign a copyright assignment after completing their work, if it must be signed in order for them to receive that final payment. If they refuse, you may have just received an important clue about their intensions.”

If you are looking to build your first website or make major changes to an existing one with a new developer, copyright assignment should be discussed in the initial discovery process. Generally speaking, when developers make a new business proposal, there will be an initial services contract that spells out both parties’ responsibilities. This often means that copyrights are not discussed. Rather than spending the time and money to write a whole proposal from scratch, it’s an efficient and economical process to have a good IP guy add a clause that requires them to execute an ‘assignment of copyright’ once the work is done. The rights must be assigned afterwards because you can’t assign rights for work that does not yet exist.

For information about copyright laws, the Copyright Office offers introductory answers to frequently asked questions about copyright registration and services of the Office at: http://lcweb.loc.gov/copyright. This site has lots of useful tips and FAQs and should be considered required reading before interviewing any potential IP professionals. Registration forms are also available onsite to permit registration of website and other copyrightable works with the Copyright Office.

ABOUT THE AUTHOR: Lee Parks is president of Lee Parks Design, a Powersports brand management firm and motorcycle glove manufacturer, and a frequent contributor to powersport publications. Parks has also written “Total Control —High Performance Street Riding Techniques”. E-mail your comments and concerns to lee@leeparksdesign.com.

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