Website Development Agreements
by Anne Arathoon
Most business owners understand the importance of a website for marketing and increasing sales, but when they decide to create or update their websites the focus is on finding a developer to do the work. Often the task of formalizing the relationship is overlooked. Here are five important reasons business owners should be sure to have a website development and maintenance agreement:
1) Make sure you own the content on your website. Business owners typically think that when they hire an independent developer to create website content, their business owns the content. But that may not be the case. Absent a written agreement, you probably do not own the rights to the content on the website developed specifically for your business by an independent developer. Under the copyright laws, the creator of the work owns the copyright in the work unless the work is a “work made for hire.” If your website developer is not your employee, you need to specifically state in your agreement that the website content is “work made for hire.” You should also clarify in your agreement that if the website content does not qualify as “work made for hire” then the developer assigns any rights in the content to you or your company.
2) Have permission for use of images and other content created by others. Content on your website not originally developed by the developer and not in the public domain must be properly licensed to the developer or your company. If your developer uses content in your website owned by another party without permission, you may face a claim for infringement. The fact that you were unaware that your developer used content owned by another party will not relieve you from liability. To protect your business from this exposure, you or your developer must have permission to include images, logos, trademarks or other content owned by another party on your website. Your developer should represent in the website development agreement that the website content is either the developer’s own work or lawfully licensed to the developer or your company. Ideally, the agreement will also require the developer to indemnify you for any expenses or damages that result from any claim of infringement or breach of the developer’s representation that the website content is not infringing any other parties’ rights.
3) Be clear in your agreement. As with any business transaction, it helps both parties to clarify expectations and avoid ambiguities by detailing the specific terms of your agreement in writing. The website development agreement should clearly set forth, among other things: scope of the project; payment amount and payment terms; completion date for the website; acquisition and ownership of domain names; website maintenance and hosting requirements, if any; representations regarding ownership of content; and indemnification for infringement claims. Website developers often desire to place their logo on your website or use a copy of your website as part of their portfolios. Your agreement can address this desire and properly license or otherwise permit such use while protecting your rights in the content.
4) Don’t use meta tags to divert your competitor’s customers to your site. Meta tags allow a search engine to identify your website when a competitor’s name is searched. Some developers will use a competitor’s name or trademarks as meta tags in a website to drive traffic to the website. Avoid this practice to avoid potential liability for infringement. Talk to your developer about keyword purchasing.
5) Set forth any agreement regarding maintenance of the website. If you expect your developer to maintain the website, the website development agreement should detail the maintenance terms, such as: scope of maintenance, payment amount and payment terms, any technical support provided, and maintenance of servers.
Creating and updating your website is an important part of doing business in today’s global environment. A good written agreement will clarify both parties’ expectations; address your specific issues and desires regarding ownership of your website content, highlight the need for permission to use others’ content and set forth any terms for maintenance of the website. An attorney experienced in drafting contracts and who understands copyright and other web development issues can help you prepare your agreement. As with most agreements, putting some thought and time into preparation of a website development agreement will save you expenses and headaches in the long run.
Anne Arathoon practices in the business services group at Karnopp Petersen LLP. She provides legal advice to businesses in the areas of business law, intellectual property and licensing, mergers and acquisitions and corporate finance and securities. Anne can be reached at 541.382.3011 or aea@karnopp.com.
This article is for informational purposes only and does not
constitute tax or legal advice.