A primer on legally setting up your Internet-based business
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Online entertainment is probably getting more publicity than any other type of e-business. As I was preparing this column, the Recording Industry Association of America (RIAA) filed major lawsuits against MP3.com, MP3Boards .com, and Napster. The outcome of these lawsuits will directly affect how music is delivered to consumers. If you’re not careful, any one of the court decisions could make your business legally liable to consumers, developers, or content providers.
One method of covering yourself is to include a carefully drafted disclaimer on your Web site. The disclaimer should state that you are aware of the various laws regarding trademarks, copyrights, privacy, and the like; that you are making good-faith efforts to comply with all of these rights; and that those using your site to conduct business can do so only if they comply with all of these rights. Taking this precaution won’t guarantee that you’ll be absolved of all wrongs, but your disclaimer and the business actions you take (for example, ceasing to do business with a person who knowingly violates another person’s copyrights) will put you on good legal footing.
Logging Off
Online business is one of the most exciting phenomena the entertainment industry has experienced in recent years, and it doesn’t show any signs of slowing down. Many historical, business, and legal analysts compare the impact of online entertainment to that of the printing press, radio, and phonograph records. By keeping up with the legal issues that change with the technology, you and your cyberbusiness can ride this fast-moving wave more safely.
Artist manager and music-business educator Michael A. Aczon recently logged more than 400 miles in an online cyberbicycle ride across the country.
Once you decide to take the plunge into the world of e-business, you must commit yourself to staying abreast of new technology and the laws involved in technology and business. Here are a few sites that might prove useful to you in establishing your business and keeping it legal.
There is no shortage of news outlets on the Web. In addition to the online arms of traditional news services such as the New York Times (www.nytimes.com) and CNN (www .cnn.com), you should frequently visit the news sections of such technology-specific sites as ZDNet (www.zdnet .com), Wired (www.wired.com), and Cnet (www.cnet.com).
You can also keep up with the major lawsuits that are brewing by checking in with the litigants themselves, the RIAA (www.riaa.com) and Napster (www.napster.com). The Napster site’s “Press Room”area contains many articles about Napster and the RIAA’s lawsuit against the company. These stories are from reputable news organizations from around the world. Many of Napster’s court depositions are also available as downloadable PDF files.
The RIAA site has general information on copyright and piracy, as well as most of the organization’s press releases regarding the suits against MP3.com and Napster. Bear in mind that these are press releases, not news accounts, so they only contain the RIAA side of the story. Still, reading them is a good way to follow the history of these cases.
Two legal sites worth checking out are FindLaw (www.findlaw .com) and FreeAdvice (www.freeadvice .com). The FindLaw site offers legal news, articles, discussion boards, and advice for small-business owners. The site’s home page is text heavy and a little difficult to wade through, but clicking on the “Small Business” link takes you to a well-organized and helpful list of topics, such as step-by-step instructions on how to put together a business plan and how to deal with intellectual property and contracts.
FreeAdvice also provides help for small businesses. Topics covered include getting a tax identification number and partnership types. The site is heavily oriented to hooking you up with a lawyer (the enormous blue Find a Lawyer button after every paragraph is a tip-off), but it does give plenty of free helpful advice. FreeAdvice also sells legal forms at low prices (most cost about $10 or $11, and a few are $15).
—Mary Cosola
Reprinted with permission from 
Magazine, November, 2000
© 2000, Intertec Publishing, A Primedia Company All Rights Reserved