Fusion Productions - Integrating Meetings, Learning & Technology

1. How does an association ensure that it has negotiated a good contract with a "dot.com" or other "for profit" firm that protects the "content" and "community" of the association and limits the firm's ability to randomly market and sell association property?

Answer: It is always a complex and somewhat risky endeavor for an association to develop a successful and enduring partnership with an outside commercial firm. With very few dependable "blue chip" suppliers (of the ilk of IBM, EDS, Oracle, etc.) targeting specifically the association market for advanced Internet-based applications, associations are frequently left to deal with relatively new firms that have relatively little capitalization and relatively few references in this area. Thus careful contracting is even more important than otherwise. Most such deals are structured so that the association contributes its "content" and "community," information and programs offered under association sponsorship to its constituency; in return the vendor firm contributes, and maintains, its software. Revenue is then shared by the two on some agreed ratio. Typically each party — the association and the vendor — continues to have ownership of what it contributes; and each can extract what it has contributed when and if the arrangement is terminated. If those kinds of terms are carefully outlined in the agreement, there should be no opportunity for the vendor to use the association's "content" and "community" for other purposes. Indeed, the agreement might well specifically provide as such.

2. How does an association structure an agreement so that if the vendor goes out of business the association's property is not tied up in bankruptcy proceedings?

Answer: If the agreement provides that the association continues to hold all ownership rights to the "content" it has contributed to the program — and that the "content" is always to be extractable by the association such as in the case of the vendor's bankruptcy — this should not be a problem. The likely result is that, in the event of the imminent insolvency of the vendor, the association simply extracts its "content" from the program. That "content" should not be considered an asset of the bankrupt estate subject to control by the bankruptcy laws. It would be useful, of course, for this issue to be anticipated and provided for clearly in the agreement between the association and the vendor.

3. How does the association best preserve its intellectual property rights?

Answer: Again, this is best done by contract. What the association contributes and continues to own should be clearly described in the agreement. It should be made unequivocal that the vendor acquires no rights whatsoever in that intellectual property of the association. It is typical for there to be a schedule attached to the agreement which lists the main areas of "content" provided by the association and continued to be owned by it. With respect to any new Internet domain names, trademarks, service marks, etc., this is usually negotiated as to ownership rights. Of course the association must continue to hold all rights to its existing names and marks. As to new ones, there is certainly no reason why the association shouldn't own them as well. One thing to try to avoid is a "race" to register marks in the name of the association or the vendor; this issue should be negotiated and resolved between the parties before registrations are effected.

4. What to do about liability for statements posted on bulletin boards?

Answer: This is a longstanding problem for anyone, whether association or corporation, that sponsors chat rooms or bulletin boards on Internet web sites. First of all, there should be a clear notice to users that it is against association policy and inconsistent with the terms of use of the web site for users to make statements that raise questions under the antitrust laws, defamation laws, privacy or pornography laws or that infringe upon the intellectual property rights of others. Most associations have staff do spot monitoring of the chat rooms and bulletin boards they sponsor; when questionable material shows up, the party responsible is called and asked to cease. In an extreme case that could implicate the association in a liability situation, it is sometimes prudent to temporarily shut down this portion of the web site until those responsible for improper statements can be contacted and the matter resolved "offline."

Answers provided by Jerry Jacobs of the Shaw Pittman law firm
in Washington, D.C.