8. Intellectual Property Infringement
Liability: Lawsuits over intellectual property infringement can range from an injunction to a multi-million dollar judgment. Even if you succeed in court, the lawyer fees alone can be enough to bankrupt your company. With the average patent jury trial costing $1.5M per side in attorney fees, many internet reliant companies cannot even finance a lawsuit long enough to get their case before a jury. Unfortunately, once you run out of money, you lose.
Even if your internet infringement of someone else’s patent, copyright, trademark, trade secret or trade dress only leads to your website being removed by court order, the results can be unpleasant. For a company that relies on the internet for a majority of its sales and communication, your company may not be able to survive long enough to see its internet sales recover. If your company becomes aware of an accusation of infringement and you fail to contact your lawyer immediately, the court may additionally award punitive damages and order the company to pay the intellectual property owner’s attorney fees as well.
Solution: The only way for small to medium sized online business to win this game is not to play. Do not infringe patents, trademarks, copyrights or trade secrets on your website. Make everyone in your company, especially those developing content for the internet, acutely aware of the proper use of trademarks, copyrighted material and patentable processes. You can help your employees and your website developers by working with a knowledgeable lawyer to adopt a detailed policy relating to the use and/or dissemination of intellectual property. It is critical that all intellectual property used on your website is owned by your company or properly licensed. No material should be assumed to be “freeware,” in the public domain or corporate property without detailed documentation to that effect.
As no policy or documentation can absolutely insure the provenance of intellectual property, every company must have a contingency procedure in place. Once an allegation of infringement is levied, time wasted in contacting your lawyer and determining the appropriate course of action can cause your liability to skyrocket. Informing your employees of the appropriate procedures in advance, can be the difference between simply removing the infringing material from the internet and having your company’s online operations brought to an abrupt halt.