This article is provided with permission from ChangingOurWorld.com
The Internet provides instant access to potential donors across the country and the world, but it also poses new legal problems, many of which are snares for the unwary. For example, if your Internet fund-raising efforts pull in contributions from Peoria, then you may well be subject to suit in Peoria even though no one from your organization has ever stepped foot in the state of Illinois. The expansion of the reach of local charities made possible by the internet has led to a number of clashes over the use of similar names by non-profit corporations located in different areas of the country.
Still other legal problems arise from the mechanics of developing and displaying websites. Charitable institutions are understandably reluctant to spend money on legal fees, but software development and web-hosting agreements are full of pitfalls. The purpose of this article is to set out a few basic principles to help fund-raisers navigate the internet without foundering on hidden legal shoals.
A. Choose a Protectible Name and Obtain a Federal Service Mark Registration
Many charitable institutions have never bothered to obtain a Federal service mark registration for the name used to conduct their fund-raising activities. Often the names of the charities are highly descriptive. The original operational scope of many charitable institutions was city-wide or regional. When such a local charity devoted, for example, to children's cancer care, opens a website, a distinct possibility exists that its name will be confusingly similar to the name of another charity that is also raising money for a similar purpose in another part of the country. A lawsuit for trade name and service mark infringement may well be the result.
The best safeguard against such an unpleasant surprise is to clear the name of your charity prior to opening a website. Name clearance is obtained by ordering a trademark search report to determine whether another fund-raiser has made prior use of a confusingly similar name. If no conflict exists, you should then apply for and obtain a Federal service mark registration. The registration confers on the holder a presumption of nationwide rights in the mark in question as well as a variety of procedural advantages in the event a trademark litigation were to arise. If the trademark search reveals a problem, often the name of your charity can be modified in order to avoid a potential conflict. At the very least, such a search allows an appropriate risk assessment prior to embarking on the Internet.
B. Have Your Website Development Agreement Reviewed To Make Sure You Have the Right to Improve or Modify that Site in the Future
Many Website developers are relatively small businesses that employ freelancers to do the architecture and software required for the development of a new website. Often, a Website designer may utilize a combination of public domain and shelf software as well as custom software in devising a new website. The Website development contract you enter should, at a minimum, provide an indemnification, protecting you against any third party claims for copyright infringement.
Such an agreement should also contain provisions that assure that you can modify or improve your Website in the future without having to seek the permission of the original Website developer. This can be done by requiring that the site developer assign all its rights or, at the very least, grant a royalty-free, non-exclusive, assignable license of all software necessary to support the site. Without such an assignment or license, modification of the software you paid for might be considered the creation of a derivative work, which would subject you to a copyright infringement claim brought by your original contractor.
C. Review Your Website to Assure Any use of the Trademarks or Likenesses of Others Is Proper
Often, celebrities will lend support to your charity, or corporate sponsors will supply gifts of branded products to assist in fund-raising. Nonetheless, if pictures of well-known personalities appear on your Website, you must be careful to document the written consent of the celebrities in question. The use of their likenesses, without their consent, may violate state statutes or common law privacy rights. New York, for instance, has a statute requiring, in certain circumstances, that the written consent of individuals must be obtained prior to using their pictures in advertisements.
In the case of trademarks owned by others you have to be careful as well; especially if your website hyperlinks to other sites. In particular, if the manner in which you display someone else's trademark on your Website creates the appearance of an association or sponsorship between the owner of that trademark and your charity, then you may be subject to suit.
These simple rules obviously are not a panacea. But if you observe them, they should help you avoid some of the most common legal problems encountered by charities that engage in Internet fundraising.
About the Author:
William R. Golden, Jr. is the head of the Intellectual Property and Technology Litigation Practice Group of Kelley Drye & Warren, LLP, an international law firm with headquarters in New York.