Every time you’ve installed a piece of commercial software, you’ve invariably been presented with what must have appeared to be legal gibberish- a seeming difficult to read, needlessly long, solid block of text that was almost impossible to understand. Most people never bother to read the information presented- quickly scrolling to the bottom of the page, checking a box, clicking on “I Agree” or doing whatever it takes to get past this legal hurdle to access the software.
While this may seem like a nefarious or underhanded practice to take advantage of unwitting users, it is actually business critical for the software publisher to be able to prevent abuse of the software or service by malicious users, hackers, or even competitors. These terms also limit the liability for the business for claims that may be filed by the user of the software in ways that the business could never have anticipated.
Just as every business has different requirements that vary by size, industry, and region, software terms are not one size fits all, and should be customized to meet the specific service offering, secure the rights required, and mitigate the associated risks unique to the business model.
Limiting Your Exposure
No matter how long you’ve been in business, users invariably find a way of surprising you with a confounding use of your software that you may never have anticipated. It’s baffling how these corner use cases often become the most litigious in their demands or claims when your software fails to continue meeting their needs.
A potential scenario follows. Your small business lead platform quietly becomes the default CRM for a statewide real estate agency that can no longer access closing contracts when your servers are offline for unscheduled maintenance. All of their real estate closings have to be rescheduled, loan rates are no longer valid, and the buyers are looking for blood.
Your State, Your Laws
It may also be preferable for your business to require arbitration proceedings for any legal issue that arises with your users, rather than allow for litigation, as a cost saving measure.
Rights, Rights, Baby
Oftentimes, platforms with user-generated content tend to allow users to retain ownership to their content, but take a very broad license for the use of the material. This heavy-handed approach can cause customer satisfaction issues, as evidenced by the backlash Facebook and other content sharing sites have experienced when they expanded their rights to the user content. This license needs to be crafted for your specific business requirements to secure the rights you legitimately need to fulfill your platform objectives.
This information collection also raises the issue of privacy rights that is a topic in its own right and addressed in a separate article covering the usage of Privacy Policies.
User Generated Headaches
Many platforms allow for users to create content that is visible to other users on the platform or publicly. Often times this user generated content includes the ability for users to upload photos, audio, or video to make the content more engaging and attractive. The viral user video that got all the press for your platform? Turns out it included clips from Game of Thrones and HBO isn’t happy about the copyright infringement.
DMCA can provide a defense against user copyright infringement liability
Fortunately, you can provide a defense for your business from copyright violations your users may create by virtue of complying with the Digital Millennium Copyright Act (“DMCA”). The DMCA helps protect businesses and apps from having legal liability for any copyright infringement that takes place due to the actions of its users, if they follow the procedures required. While the DMCA is a United States law, other countries around the world have laws regarding copyright infringement.
In addition to the copyright issues from user generated content, your business can still run afoul of content considered unlawful in any number of jurisdictions around the world. Many jurisdictions worldwide have laws restricting material that is considered hate speech, inflammatory, child pornography, graphic violence, depictions of abuse, and other material considered unlawful content. These interpretations vary widely in their scope and breadth.