5 Key Legal Considerations for E-commerce Businesses

October 4, 2021

5 Key Legal Considerations for E-commerce Businesses

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By Emily Shingler

So, you’ve set up a business, chosen your business name, decided your product/service offering and created your website. However, have you considered how to protect your brand and business? Below are some tips for protecting your brand and ensuring that your business is legally compliant.

1.      Identify and protect your IP

• It is important to identify the intellectual property (IP) in your business. This will enable you to value it and also take appropriate steps to protect, manage and exploit your IP.

• Common types of IP in e-commerce businesses include: trade names, logos, slogans, domain names, trade secrets, design rights, copyright in customer databases and copyright in the text on a website.

•  Register your different types of IP where appropriate. For instance, you can register trademarks you use in your business (such as your business name or the name of your product) at the UK Intellectual Property Office to protect your brand in the UK.

•  Make sure your employee contracts are properly drafted so that all IP is immediately assigned to you as the employer.

•  Where you have used consultants to help you with logos, website content and the like, make sure that they have legally assigned the IP rights to you that they have created on your behalf. Otherwise you could be in a situation where you don’t actually own your business IP.

• Use symbols to warn off third parties from unauthorised use of your IP, such as © and TM.

•  Always seek legal advice and take swift action if a third party is infringing your IP.

2.      Terms and Conditions of Sale

• We recommend that you have online terms and conditions in place with your customers, particularly as selling to consumers online is subject to additional consumer law requirements.

• Your terms should deal with issues such as delivery, returns and taking payments online.

• Consumer protection laws governing online sales require you to provide certain pre-contract information to the consumer, such as:

  • your legal identity

  • total price of the goods/services or how it will be calculated

  • cancellation rights

• Best practice is to provide the above information plus any additional terms in a single document.

•  Make sure you incorporate your terms into your online system and processes to ensure that your terms are brought to the attention of the customer before they conclude their order. Otherwise, you may not be able to rely on your terms if a dispute arises.

3.      Website Privacy Policy  

• E-commerce businesses will inevitably collect, store and process the personal data of its customers and website users, such as their name, email and also billing addresses. Most commonly they will collect personal data when users create accounts on their website, purchase goods or services online or fill in an online enquiry form.

• Under data protection laws, a business is required to provide an individual with certain information at the point their personal data is collected, including the purposes for processing their data, who the data may be shared with and how long the data will be kept. The easiest way for e-commerce businesses to provide this information is through a website privacy policy (sometimes referred to as a “privacy notice”).

• Locate your privacy policy in an easily accessible location on your website. It is good practice to have a link to the policy on every page of the website, with the homepage being the most prominent.

• You should also signpost website users to your privacy policy when they are about to enter personal information via your website.

•  The language of the privacy policy should be clear, concise and involve minimal legal jargon.

4.      Cookies Policy

• It is best practice for e-commerce businesses to have a stand-alone cookies policy/notice on their website.

• Under data protection laws, a business is required to provide clear and comprehensive information about (i) the cookies the business intends to use and (ii) the purposes for which the business intends to use them.

• E-commerce businesses typically use banners, pop-ups, message bars, header bars or similar techniques to notify users about the use of cookies on their website and also refer the user to a more detailed cookies policy.

• If you are using cookies on your website that require the consent of the website user (such as analytics cookies), ensure the consent mechanism on your website is separate from your privacy notices and T&Cs – the key is to be upfront with users about your use of cookies.

5.      Terms of Website Use

• It is good practice to have website terms of use which deal with access to, and use of, your website. These are different from your terms and conditions for the supply of goods/services. Terms of website use typically provide information on who owns the website and the IP rights in the website. They can be particularly useful to warn third parties off unauthorised use of your IP.

• If your website includes features that provide interactive access to the site and allow the user to upload their own content or information to the site, consider publishing an acceptable use policy.

• Such a policy would contain rules and standards with which visitors must comply when using the site. For example, rules prohibiting users from uploading illegal or offensive content. It would also outline your contractual remedies if a user breached the rules, such as removing offending material, suspending or permanently disabling a user’s account.

• The website terms of use and acceptable use policy should ideally be displayed, or be accessible to, users by means of a prominent hyperlink, on all pages of the site, but also flagged where the user is uploading material onto the website.