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& Internet
Law Article

Putting Your Business Online

By: Jay Hollander
Date: 1998

Jay Hollander, Esq. is the principal of Hollander and Company LLC, www.hollanderco.com, a New York City law firm concentrating its efforts in the protection and development of property interests relating to real property, intellectual property and commercial interests, as well as related litigation.

The content of this article is intended to provide general information relating to its subject matter. Providing it does not establish any attorney-client relationship and does not constitute legal advice. Personal advice in the context of a mutually agreed attorney-client relationship should be sought about your specific circumstances.


One of the cottage industries which has been spawned by the remarkable growth of the Internet has been that of the Web Hosting Service. Existing to give all kinds of businesses a stable address on the Internet, without need of expensive hardware purchase and maintenance, and without excessive network security concerns, these services are marketed everywhere in an increasingly cut-throat manner.

Yet, despite the explosion in commercial websites over the last year, and the accompanying explosion in web hosting services, there continues to be many variations between the terms of web hosting agreements, the agreements signed with web hosting services, to allow companies to have a presence on the Internet.

Once you've decided that your company requires a place on the Internet, what should you look for in a Web hosting service? More importantly, what do you need in a web hosting agreement to ensure that your business presence is what you intended?

While much can be written and negotiated in the context of these hosting agreements, make sure that, at a minimum the following points are provided for in your contract.

DOMAIN NAMES - Simply put, a Domain Name is the English language version of the numeric address of your web site, just like hollanderco.com is the Domain Name of this site. In order to obtain maximum prestige for your company's site ,and to give the appearance of having your own web server, make sure that your Web Hosting Service will arrange to give you your own Domain name if you don't already have one. Here, check to see if the price is included in the Hosting Contract or whether it is an add on. If your Web Host charges more than a hundred dollars or so to get your Domain name for you, consider getting it yourself from Internic.

Thus, your web address will be www.yourbusiness.com instead of www.webhost.net/yourbusiness. Since you will presumably be putting substantial effort into promoting this site, and since you may not stay with your chosen web hosting service forever, make certain that your contract acknowledges that your Domain Name belongs to your company and is not assigned to the Web Host. This will avoid being locked into a particular web hosting service.

COPYRIGHT and TRADEMARK - After making sure that you own the rights to your Domain name, next make sure that you own all of the .intellectual property rights to which your site entitles you. The big ones here are copyright and trademark.

While the law gives no monopoly on ideas, it does grant exclusive rights to control creative expression, subject to limited exceptions. Simply speaking, the copyright of your web site protects the message of your site as expressed in it. This includes the specific form of your presentation. You need to be careful to insure that you retain all copyright to your site and its contents and do not inadvertently transfer them to the Web Hosting Service.

Closely aligned with Copyright, but distinct from it, is Trademark. Trademark is protection afforded by federal law upon application to the Patent and Trademark Office. Most often, the potential trademarks which will be relevant to you are your company name and product or service brand names which are reflected in your site. In fact, if sufficiently distinctive, even your choice of Domain Name can -- and should -- be trademarked. For these services, a knowledgeable lawyer should be consulted.

While the decision to trademark your company name, Domain Name, or certain brands is up to you, the decision to create a web site carries with it the implied responsibility to check that you don't violate another company's trademark and vice versa. This responsibility is not the job of the Web Hosting Service. However, many web hosting services, to the extent that they provide web design services, will also procure your domain name as part of the package. Make sure that, before you casually accept any domain name which a Web Hosting Service tries to provide, that a trademark review is made, to give comfort that the domain name in which your company will invest significant money, time and effort, will belong to you.

SUPPORT FOR YOUR WEB SOFTWARE - As the number of internet sites grow, there seems to be a similar exponential growth in software programs which are intended to provide easy ways to design web sites with minimal technical knowledge. Separating hype from reality, however, different web creation software programs employ different methods to produce their pages, such that certain web pages may not display properly on certain browsers or on computers lacking certain internet browser plug-ins. A common feature of Web Hosting Services advertisements tout the web creation software which they support. It is typical, for example, to see ads claiming support for "Microsoft Front Page™ extensions" or for a different popular web site creation program. Make sure your contract specifies that the Hosing Service will support the software in which you will design your website.

BANDWIDTH, SPACE and RELIABILITY ISSUES - Next, think about what would happen if you gave a website and no one could come because your Web Hosting Services' server is down or otherwise lacks capacity to handle the amount of incoming traffic coming to your site. Given the notorious impatience of many web surfers, and the slow download times for web pages being accessed over dial up modem connections, excessive wait times to contact your site or to retrieve your web pages will often prompt a potential customer to vote with their mouse by clicking elsewhere. Thus, you want to have assurances about the bandwidth available at your hosting service. This should be also spelled out in the contract.

To conserve precious bandwidth, some web hosting services indirectly tax you on the amount of traffic that comes to your site by limiting the amount of bytes of monthly transfers. With such a host, you want to have the maximum flexibility in this regard and negotiate reasonable charges for reasonable limits.

What about the available space for your website? Measured in megabytes or "MB's" of storage, each web hosting service provides varying amounts. If your web site is little more than a short brochure of a few pages, then this will not be as much of an issue as it would be if you were going to have a large online catalogue full of graphics and the ability to perform electronic commerce or purchasing over the internet. You need to evaluate this carefully and ensure that your monthly fee reflects not only your current usage but your anticipated growth as you add to your site over time.

UNRELIABLE SERVERS -- and even reliable ones-- can break down. This is known as "downtime". When your Hosting Service's server is down, so is your website. To guard against this, make sure your hosting agreement contains assurances about steps which the service will take to minimize downtime. In a related issue, when problems arise, the availability of round the clock technical support cannot be overstated and should be insisted upon in any hosting service agreement.

E-COMMERCE and SECURITY - If you have any intention of actually doing business on the Internet, the ability to have secure communications and support for online transactions must be guaranteed in the contract, with suitable provisions for indemnification by the Web Hosting Service for breakdowns.

CONCENTRATE ON THE BASICS - If you'll forgive the pun, there are a "host" of other bells and whistles which web hosting services actively publicize in order to persuade you to host your company's site with them. These range from e-mail forwarding to streaming audio and video support to keeping logs of who comes to your site and which pages they look at in the process. While there are a lot of interesting technologies to pick from, they should not distract you from the basic issues highlighted above.

Ensuring that the Web Hosting contract matches the advertising and commits the service to giving you what you need in terms of uptime, space, bandwidth and intellectual property protection far outstrips what you will gain in video and other "cutting edge" technologies.

Copyright © Jay Hollander, 1998. All Rights Reserved.