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Technology - Website Development Agreements

The Internet has created new issues with respect to software development, particularly in the area of web site development. Setting up a website on the Internet's World Wide Web has become a key strategy for any business or organization hoping to capitalize on the increasing range of commercial activity taking place online. For example, using a website, a company can advertise its products and services, permit Internet users to order its products, conduct transactions, provide customer service and facilitate communication between geographically dispersed Internet users. Although setting up a website may create a variety of new business opportunities, it is essential that the underlying legal documentation with those implementing the website addresses all of the unique considerations presented by website development and hosting.

Like all multimedia projects, website development involves a wide variety of intellectual property issues. The Internet's global availability, however, raises the stakes considerably. While a copyright holder may disregard a minor use of its intellectual property in off-line publications, the same copyright holder might rigorously enforce its rights against use on a website with a larger potential audience. Between the developer and the client, traditional intellectual property concerns of ownership will dominate the planning and drafting stages of website development agreements. Furthermore, in many situations, this relationship will require the disclosure of significant amounts of confidential and proprietary information. Finally, the operation of the website itself may create a voluminous amount of valuable data on a daily basis.

In developing a website, most companies will need to contract with a professional website developer and, possibly, software developers to assist the company through the entire process from concept to final design. Such vendors can develop software and/or applications that connect a company's existing systems and databases to the portal, handle updates to the portal, and arrange for electronic encryption systems and data aggregation, among other services. A development agreement should clearly set forth the agreement between the parties as well as the ownership of intellectual property. Oral development agreements are usually an invitation to disaster. The parties may make different assumptions about ownership. Without a written agreement the developer may, in fact, own the rights to the company's website because under copyright law ownership rests with the author. Additionally, a written agreement helps the parties avoid disputes, and helps the parties resolve disputes when problems arise.