End-of-year Legal Checkup, for Ecommerce

It’s that time of year — an chance to spend some time with family, reflect on the successes and failures, and make plans for 2017. It’s also time to reflect on the things which you might have been putting off, such as legal compliance.

Here’s a checklist that will assist you review what you might have been failing and make plans for the end of the year or another year.

End-of-year Legal Checkup, for Ecommerce

Business entity. Any head-to-toe review begins at the business entity level. Now’s a fantastic time to review whether your entity is in good standing with your state of incorporation, in the case of a company, or business in the event of a limited liability company. If it’s not in good position, now’s the time to renew your business entity and ensure that your required annual statements are filed with your condition.

Additionally, make certain that you have an operating agreement or bylaws and that they’re current. If any changes are made to your business entity structure, like the inclusion of an equity partner or shareholder, or if you’ve had any significant life events, it might be time to examine these records and make any needed changes.

By way of instance, my spouse and I had a kid this season, which meant it was time for me to critically look at my law firm’s operating agreement to make sure that we understood precisely what could happen upon my disability or death.

Employees and independent contractors. Now is also a great time to review your arrangements with employees and independent contractors. For both, make certain you have employment or independent contractor agreements in place that include confidentiality provisions, trade secret provisions, and, if necessary and permitted in your nation, non-compete and non-solicitation provisions.

In the case of workers, all works created within the scope of their employment are owned by the business. In the case of independent contractors, however, all functions that are created by an independent contractor are, by default, owned by the individual contractor. Consequently, it’s very important that all independent contractors sign an independent contractor arrangement containing both a job made-for-hire and a copyright assignment clause to make certain that any works created by an independent contractor are assigned to the corporation.

Business assets. It’s also important to be certain that your company assets are safeguarded. Begin with domains, the theft or loss of that is a frequent source of headaches for my customers. Make certain that your domain names are protected by two-factor authentication, wherein access requires not just a password and user name but also something which only the user knows. Most modern registrars provide two-factor authentication to protect against unauthorized access to a domain account.

Furthermore, now is also a fantastic time to apply for copyright registration. I generally recommend that merchants with a significant number of SKUs and product shots document for copyright registration of the site content on a quarterly basis since this program permits them to get up to $150,000 per work infringed. With a site export tool, for example SiteSucker, can allow you to prepare a deposit to be registered with the U.S. Copyright Office.

And it’s also an excellent time to assess your trademark portfolio. When you haven’t yet done so, filing for trademark registration is a significant step in protecting your brand and developing a business asset that can supply you significant value upon the sale of your organization.

Trademark rights are territorial — your rights stop at national boundaries. Thus, in case you have an international ecommerce shop, it’s crucial that you protect your rights in all jurisdictions in which you operate. European Union Community trademarks are one way to add enormous value to an ecommerce business because they can provide protection throughout the full European Union for a low cost.

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Contractual agreements. Ultimately, the end of the year is a fantastic time to review your contractual arrangements to make sure that they’re current and continue to protect your company. By way of instance, examine your terms-of-use agreement, privacy policy, and copyright coverage to make certain that these vital documents remain compliant with the law. There have been several big changes in the law during the past year which may have had an impact on those documents.

By way of instance, the U.S. Copyright Office recently issued a rulemaking that requires all service providers that need to make the most of their Digital Millennium Copyright Act into re-file interim designation-of-agent forms together with the U.S. Copyright Office or otherwise lose their safe harbor protection for secondary copyright infringement.

The E.U. and the U.S. have struck a new deal, the Privacy Shield, allowing for the cross-border transfer of private and personally identifiable information. This new deal requires significant alterations to existing privacy practices. Along with the E.U. has also made significant changes to the General Data Protection Legislation with a considerable effect on any business which collects personal or personally identifiable data from citizens or residents of the European Union.

There’s no better time to save yourself future legal headaches. As always, talk to a lawyer for specific legal counsel, and have an excellent holiday season and a happy new year.