Paul Durham | April 23, 2021
Despite the great hardships that we have all endured over the past year, many of us find ourselves cautiously optimistic that a return to normalcy may soon be underway. Reflecting on the challenges faced during the earliest days of the pandemic, I recall the many pressing questions at the forefront of business clients’ minds: Am I an essential business? What should I do about my employees? Can I get out of my commercial lease? How do I apply for loans and other aid?
Perhaps most importantly — where will my revenues come from? Business owners scrambled to find ways to adapt their products and service offerings to a marketplace that had been turned upside down. Local retailers began offering pick-up and delivery services where they never had before. Professional advisors utilized video-conferencing to deliver their services seamlessly. Fitness instructors, interior designers, and even dog trainers adapted to reach their clients in new ways—many becoming online content producers for the first time. In the thick of a crisis, it was necessary to adapt first and ask questions later.
These nimble and quick-moving innovators were the most likely to survive — and even thrive — during the pandemic. Now many businesses look forward to retaining these new service models as the economy moves past the strict limitations of 2020. If your business falls into this category, your move online should also include a survey of potential new legal issues. The following general topics are worth considering regardless of the size of your business.
Online Terms and Conditions. Most businesses will already have a website or social media presence for marketing purposes. However, if your products or services are offered or delivered remotely, online terms are used to establish your binding agreement with your customers. Although you are not required by law to have online terms of sale, well drafted terms help business owners protect themselves against liability by setting forth limited warranties, return policies and other disclaimers. It is important to make the terms conspicuous in order for them to be enforceable, and this is often accomplished by requiring customers to click a button to affirmatively acknowledge agreement. Some businesses may also sell through larger online marketplaces or platforms. Although these marketplaces may provide you with access to a much larger pool of potential buyers, be mindful that the marketplace’s own terms and conditions may impose unexpected restrictions on how you sell your own products.
Intellectual Property. As a business owner, you will want to safeguard any proprietary content that you create, display or distribute online. This includes spelling out permitted uses in your customer-facing agreements and obtaining copyright or trademark registrations when appropriate. However, just as important, you must be sure that the content you display does not infringe upon the intellectual property rights of third parties. Most businesspeople realize that they cannot freely use just any photograph or image they come across online, but infringement issues can arise in unexpected ways. For example, a personal trainer who leads an online group class may not think twice about playing popular music during a streamed session. She may even have a blanket performance license that otherwise covers such usage when in-person at her studio. However, the trainer could very well be infringing upon the rights of the music owner if she does not first obtain an appropriate license or permission to use the musical work online.
Online Privacy Policies. A website’s privacy policy discloses how the website operator uses, stores and distributes personal information collected from its visitors. Websites for small businesses are often fairly straightforward, displaying company information such as location, hours of operation, or contact details. Even these most basic websites can passively gather data about visitors’ through cookies and other tracking technologies, but, generally speaking, their privacy policies can be fairly simple because limited personal information is collected. However, with a pivot to remote order taking or an online distribution model, the types of personal information likely to be collected include names, email and shipping addresses, phone numbers, and other sensitive data. Existing privacy policies should be reviewed and carefully updated. As a general rule, privacy policy disclosures must be clear, complete, and not misleading—which is why it is so important to not simply “borrow” a policy from another website without understanding exactly what it says.
By adapting and pivoting to online service models, some innovative business owners have not only weathered the recent crisis but also expanded their market reach. As with any successful change in direction, it is important to prepare for new issues, legal or otherwise, that may arise over time.
This article was originally published in the Portsmouth Herald and can be found here.