Be wary when establishing a Website: a cautionary tale of a board, a new product, and the intricacies of the Internet as a marketing tool.

• Author: Keller, Bruce P.

Establishing a company website on the Internet can be one of the most effective ways to market a company s products or services. There are, however, a wide variety of legal risks involved in creating and operating a website, as illustrated by the following hypothetical situation.

Imagine that you are a board member of Consolidated Brands, a national consumer goods company. At today's board meeting, the marketing department has set up a large projection screen in order to demonstrate the campaign that will launch Consolidated's new shampoo, called Pearl. The centerpiece of this campaign will be a special interactive Pearl website on the Internet.

As she begins her presentation, the director of marketing explains that Consolidated tried, but was unable, to procure pearl.corn as its domain name (its Internet address). With some glee, she reports that Consolidated's webmaster was able to snag head-and-shoulders.com. When asked why that name was chosen, she accesses the Pearl home page, which shows a large green bottle of Pearl shampoo. Beneath the bottle are smaller depictions of various competitive shampoos, including Prell, Pert, and Head & Shoulders. The headline text reads: "Announcing New Pearl - It's head and shoulders above the competition."

The lower left quadrant of the home page features a smiling photograph of television's Vanna White, which was copied from the official Wheel of Fortune website. When a user clicks on it, it activates a hyperlink to that site. A caption accompanying Ms. White's photograph reads: "Want to look this good? Then use new Pearl shampoo - the best shampoo you can buy."

To the right of Ms. White is an offer for consumers to buy a sample of Pearl directly through Internet e-mail at the discounted price of $1 per bottle; moreover, everyone who purchases Pearl via the Internet will automatically become eligible to win a free, lifetime supply of Pearl.

However impressive this website may be from a marketing standpoint, some of its features create potential legal problems. Many of these issues really are no different than those that have already been considered and resolved in familiar, real-world settings. In fact, most court decisions involving the Internet make exactly this point, applying long-established principles from various areas of the law. When in doubt, the best way to approach "cyberspace" issues is to apply familiar concepts applicable to other media, taking into account the factual differences...