Regardless of whether you’re a startup or Fortune 100 company, all laws of the Internet apply equally to all. In this panel, Carl Butler, VP Legal of Angies List, and David Wong, attorney at Barnes and Thornburg LLP discuss ten nine big legal mistakes made by Internet companies and practical advice for avoiding legal pitfalls.
Formation
• Seeking advice: attorney, accountant, mentors, business partners, etc.
• Highly individualized considerations
• Protect individuals
• Investment
• Tax Benefits
“One of the big legal mistakes on the front end is companies debating when to form their company. When do you pull the trigger?” Wong said.
Branding
• Clear your trademarks
• Register your trademarks
• Secure domain names
• Secure media handles
“I deal a lot with branding. What happens when you start your company but someone else has the domain and social media handles? Do you have legal rights to the company?” Wong said.
Wong explains about being careful when dealing with trademarks. You could use something generic like “Online Marketing Service Platform ++” — sure it explains what the company is, but it won’t make you stand out.
“Apple has no relation to an apple or a description to it, but the brand is very popular,” Wong said.
Carl Butler from Angies List says that they always get legal involved early for anything. “Should we be using them, will we get in trouble later on? Get involved in legal early so you don’t waste your time or resources in the process.”
Agreements
• Founder, Investor, Employee, Contractor/Vendor, Agreements
– Form v. customized contracts
– Identifying expectations
– Formalizing understandings
– Ownership of assets
– Non-compete
Tip: Butler says that Internet companies should make sure their agreements are easy to understand to a third party. It should make sense to a total stranger.
Workforce
• Employees or Contractors
– Who decides?
– Background checks
– Other legal implications
Interesting Fact: Every state has different laws on what you can ask on background checks.
Privacy/Big Data
• Policies and Procedures
– Internal and External
• Notice and choice
• Moving target
• Data security
– Privacy by design
Content
• Creating
• Copying
• Sharing
• USG
• Mashups
• Licensing
• Fair Use
Litigation
• Anticipate
– Document retention policies
– Securing legal opinions
– Internal communications
• Separate/multiple communication platforms
• Policies/BYOD
• Avoid
– Seeking legal counsel
• Determining risk adversity
• Minimizing risk
Tip: If you get a cease and desist letter, get out in front of it. Hire a lawyer and deal with it before it turns into litigation.
Seeking Legal Advice
• Who? When? How much?
• Establishing trust and a working relationship
• Learn the law without practicing it
• Cost/benefit analysis
– Risk adversity
– Going alone with guardrails
Tip: Butler suggests to have lawyer friends, or at least have a lawyer close in your network.
Putting Off Legal Issues
• Obstacle to investment
• Greater damages
• Bad habits difficult to change
• Trustworthiness
• Flying under the ‘rarely’ pays off
Tip: Don’t put off legal issues, be thinking of them early on. “I’ll worry about that later” is not a great mindset to have when dealing with anything legal.