Facebook described the case as ‘frivolous’ and made clear that they plan to fight on a variety of grounds, including that since the contract was signed over 6 years ago in 2003, it is void according to the Statute of limitations in New York. The question is also raised as to why Ceglia waited so long to file his suit? FaceBook currently has hundreds of millions of users.  It seems that it was only when the site proved to be truly successful that the plaintiff decided to file his case.  

It has also been suggested that Ceglia’s claim does not add up based on the site’s history.  Facebook’s domain name was not registered until January 2004, and according to the official history of the site Zuckerburg did not come up with the idea of creating the site until after 2003.

In light of Facebook’s success it is not surprising that they have been the subject of various claims, often by people asserting that they have had some input into the site’s development, and therefore deserve financial recognition.  The case illustrates one of the most important considerations when taking a business online, the nature of the contractual relationship between the parties involved.

If you are having a website or part of a website commissioned, be sure to agree upon and set out clearly in writing, how rights to the different elements are apportioned, and what each party is entitled to.  Make sure this is done early, and done well, and you can avoid facing the type of lawsuit that will cost a business like Facebook a huge waste of time and resources to fight, even if there is no merit to the claim.

An unregulated web means anyone can and does set up in business as an internet service provider offering websites, SEO or pay per click (PPC) advertising.  So SMEs sourcing internet services ought be more wary than when choosing a professional from a heavily regulated industry like the law or accountancy where there are in built safeguards protecting them as consumers (whether or not they are individuals or businesses).

For example, if you pay monies on account to a solicitor for work they are going to do for you, the Solicitors Regulation Authority and Professional Indemnity Insurance policies are there to safeguard your monies.  Even if your solicitor runs off with your money, you will get your money back.  But if you pay money in advance for a website, and the designer runs off with your money, you are unlikely to see it again.

Embarking on a Web Project?

Contrary to popular belief a web designer should not be your first port of call because they are not the most suited to helping you to assess your requirements and objectives for an online presence.  For example, sometimes a blog or stand alone E-commerce site might be the most appropriate solution.  A web designer would have a conflict of interest in suggesting this, or recommending an off the shelf or hosted E-commerce package entailing minimal design effort to implement.

While other disciplines also have inherent conflicts of interest, most professionals have too much at stake to let their self interest prevail over a client’s best interests.  But the web is completely unregulated, and there is no regulatory body overseeing web designers or other internet service providers.  So more than any other situation, it really is a case of ‘buyer beware’.  However, that is not to say there are not good web designers out there who would be act honourably and disregard their self interest.  It’s just that you need to take care when choosing service providers who are not subject to an independent regulator.

No matter how good your chosen web designer may be, it is inappropriate to look to them to act as your internet adviser.  This would be rather like relying on an interior designer to provide all the advice and services you need on a property matter when buying or renting a house or a shop.  It may sound ridiculous, but the lack of understanding of the web is such that this is precisely how much some businesses rely on a web designer.  Everyone knows when physical property is involved that you need to engage an estate agent, lawyer and surveyor at least, in addition to the interior designer, and that if you were thinking of significant improvements you may also need an architect too.  However, the various internet disciplines are not at all well understood.

For example, few appreciate the difference between a web designer and a web developer.   A common misconception is that web designers are the people with the best technical skills to produce a website. However, for all except the most basic brochure site, what is critical to success is a web developer’s technology and IT skills.  This is not only for ensuring the site has the necessary content management systems and associated databases, but that the development is properly managed and tested so that it can cope with the anticipated traffic.  Also the site must have the necessary backup and recovery procedures to cater for any system failures.  Unfortunately, not all web developers are properly skilled in IT either, so again it’s necessary to choose carefully.

Legal considerations

Leaving the registration of the website domain to a web designer is a mistake to be avoided at all costs.  Your rights to a domain name are based in contract, and therefore the contract should be between you and Nominet (for a co.uk name) and not between the web designer and Nominet.  Also web designers are unable to advise on the suitability of the name for branding purposes, and whether the chosen domain name may infringe someone’s trade mark.  This can be an extremely costly error to rectify.

When web projects go wrong the project budget will determine whether litigation is an option.  For many sites the costs of seeking legal redress will outweigh the benefits unless serious damage has been suffered, as where a client has spent a hundred thousand pounds promoting a site that does not then work when it goes live.

Using the small claims court is not an option businesses can realistically pursue given the complex technical issues websites often involve. So invariably the business will end up having to accept an inadequate site, or service – and this is particularly so if the domain name is registered in the web designer’s own name.

Workshop

Being one of the few firms specialising in online brand management, we saw a need for a workshop to guide businesses setting up or extending their online presence, and approached the British Library’s Business and IP Centre (BIPC).  Feeding into the Library’s existing support for business start-ups, a new workshop has been created to help aspiring entrepreneurs make informed decisions when engaging services for a web project or internet marketing campaign.

At the workshop Shireen Smith Solicitor will reveal the mistakes people commonly make when engaging internet service providers and outlines essential strategies for securing an effective online presence.  The focus is on the legal and business issues associated with Websites, E-Commerce and Online Branding.  The course costs £30 plus VAT and may be booked online here: Online Branding and Website Success .