Legal, Ethical, and Regulatory Risks

Whether an internal or external team develops the site, it is extremely important to identify and plan for legal, ethical, and regulatory compliance during the Definition phase. Consider contractual obligations and ownership issues between the client and an external Web development team. For example, do aspects of the Web site require licensing fees, or will software and content components of the site be owned solely by the client? When the site is developed internally, there are fewer ownership issues to address. If you use commercially available products to build the site, you must address licensing issues.

Processes such as obtaining attorney reviews, negotiating permissions, and designing accounting systems can take a great deal of time. Identify these issues early and manage them closely during the development phases of website planning.

• Business Law: Business law governs business and commerce in both the private and public (government) sectors. It provides a legal framework for businesscreatation and organization, and for conducting business. Business law covers a wide variety of topics relating to corporations, partnerships, limited partnerships, franchises, and limited liability companies. It involves issues such as fiduciary relationships, closely held corporations, shares and stockholders, directors and officers, dissolution and receivership, franchise relationships, management duties and liabilities, mergers and acquisitions, securities, and antitrust.
• Business Name: If you have a logo, business name, or even an invention, you need to protect it.
  The steps involved in filing for patents, trademarks or copyrights are covered in this section, along with additional resources that can help you safeguard your intellectual properties, such as having employees or vendors sign non-disclosure agreements.
  1. Understand Intellectual Property and How to Protect your Business: This business guide from STOPfakes.gov is an essential starting point for understanding your intellectual property rights and finding the right protection for your business.
  2. Applying for a Patent: Learn more about how to apply for a patent through the U.S. Patent and Trademark Office (USPTO).
  3. Registering a Trademark or Service Mark:Find out how to file for trademark or service mark protection for your business name, symbols and logos.
  4. Copyright your Work: Books, movies, digital works, and musical recordings are all examples of copyrighted works. Refer to this guide from U.S. Copyright Office for more information on what protection copyright affords and the process of copyrighting your work.

The following actions can help manage legal, ethical, and regulatory risks during the Definition phase:

1. Establish what confidentiality restrictions apply to both the client and the team.
2. Understand the client's legal and regulatory environment.
3. Identify taxation and commerce regulations that may apply to interstate or international e-commerce sales.
4. Negotiate and clearly establish ownership of the solution/product.
5. Negotiate and clearly establish ownership for all original content, including editorial, illustrations, photographs, and multimedia content. Understand that some content is not sold, only licensed for strictly defined use.
6. Assess and manage liability as defined in the proposal.
7. Establish who will be responsible for managing and obtaining any required permissions for copyrighted material, trademarks, service marks, and/or patents.
8. Understand warranty responsibility and communicate to the client how work will be guaranteed.
9. Identify and incorporate the requirements of various legislative acts governing the Internet, such as the Children's Online Privacy Protection Act (COPPA).

We will return to our development process model in the next lesson by examining phase 3: Design.

If you have an idea for a service or a product, you can start an online business. The web eliminates the immediate need for a storefront, where you can promote on social media sites such as Facebook or Twitter, and you will be up and running in a day or less. Starting a business does not take much business knowledge or any experience because of major search engines like Google, you have direct access to all the resources you will need. While most entrepreneurs have a sense of what they are doing, most have started a business before and some still have a tendency to ignore the legal risks of conducting business online.
Failure to adhere to the legal risks of conducting business online include:

1. Loss of your good standing.
2. Loss of well-known clientele.
3. Loss of your business license.

It is your responsibility to make yourself fully aware of the legal risks of doing business online.

Click the Quiz link below to test your knowledge of success factors and risks in the Discovery and Definition phases.
Success Factors Risks in Definition Phases - Quiz