Finding an on-ramp to the information superhighway has become so easy that even business startups now engage in electronic commerce. While taking advantage of the Internet’s enormous scope is getting easier, following the rules of the road isn’t. The legal responsibilities that come with conducting business on the World Wide Web are as complex as they are new.

The same qualities that make the Internet so valuable to businesses are raising issues for the legal system. "On the Internet, all information is free, and all information can be linked. That’s the beauty of it," says Paul Eckstein, attorney with Brown & Bain in Phoenix, Arizona. However, the authors and generators of this readily available information still want ownership of it and any profits it may generate.

What aspects of Internet commerce make a business most vulnerable to legal action? According to Eckstein, proceed with caution from day one. When choosing an Internet address (Universal Resource Locator or URL in Web parlance), your first plan will undoubtedly be to use some form of your own company name.

Wes Monroe, attorney with Christie, Parker & Hale in Pasadena, California says, "The best thing is to register your exact domain name as a federal trademark. Otherwise you are vulnerable to having your preferred domain name taken by another company."

Kathi Cover, an intellectual property attorney with Sidley & Austin in Dallas, Texas, agrees with Monroe’s reasoning. "If you register your trademark and properly mark it," she explains, "you’ll protect the association between your name and the good work you do." Cover also recommends copyrighting your Web site or key parts of it for the same reason. "This can be very valuable over time," she notes.

If www.yourcompany.com is already taken, however, you are faced with a choice–one that can have serious legal implications. Even if the Web address you choose is closely tied to the name of your business (which you were sure to register when the company was founded), that name and any variation of it can already be trademarked by someone else. In other words, the address–a.k.a. domain name–is off limits.

While this in itself is bad news, the worse news is that the restriction can take you completely by surprise. The company that sells you a domain name does not usually take responsibility for any background checks, so you are accountable if the tradename holder discovers the infringement. The moral? Avoid a lawsuit by thoroughly researching your domain name of choice.

Web site designers and writers need to be particularly clever these days. With so much material out there to attract cyber consumers, a site must be a true gem to bring in lucrative business. In this quest for the ultimate sales tool, it can be easy to forget undergoing the crucial legal background check.

Although the Web offers a wealth of helpful information for small business owners, care must be taken in its use. "Contrary to traditional Internet culture," Monroe warns, "the Web is not a free-for-all." Logos, text, graphics, music–anything found on the Internet–is likely the result of someone’s hard work and as such could be protected by copyright.

"This issue is particularly important for entrepreneurs who subcontract the development of their company’s Web site," says David Makous, with Lewis, D’Amato, Brisbois & Bisgaard in Los Angeles, California. Ad agencies, copywriters or photographers may offer to develop your Web site but neglect to get legal clearance from sources of borrowed material. "There’s always the risk that someone else will claim your Web pages use their text, images, music or audio/visual," Makous continues. "Be sure you own or have permission to use everything on your site."

Small business owner Chris Garcia owns and operates his own network technology company and is well acquainted with legal entanglements concerning Web page content. According to Garcia, the code used to write Web pages can be patented, causing some sticky situations. "Just because I develop a line of code entirely on my own doesn’t mean I or the company that contracted me is safe," Garcia remarks. "If somebody thought of and copyrighted it first, there would definitely be grounds for a case."

Eckstein advises using caution. "You are responsible for whatever is on your Web site," he explains. "Just because you didn’t write it doesn’t mean you are not responsible for it." Graphic design is a common area for adopting someone else’s material. Do not use logos, cartoons or photographs until making sure they are free from copyright protection.

If you remember the task of writing footnotes in school papers with the same loathing you once felt for your little brother, Internet site links are a dream come true. Rather than crediting information sources for their work each time you use it on the Web site, you can simply create a link to that material. While book authors must pay royalties to whomever produced any information they use, Web site owners need only ensure their visitors can access the source’s site. Eckstein explains, "Linking does not constitute copyright infringement."

But wait–before you set up links willy-nilly, consider their legal implications. "A news-related Web site once performed a frame link to the CNN page," Monroe notes. This type of link allows users to surf an entirely different Web site by pulling the linked site into a frame on the host Web page. Monroe continues, "This site sold advertising space in the frame displaying CNN’s material and got into a lot of trouble for it."

Although this example is brazen, anyone who misrepresents another company’s site could be committing an unfair competitive act such as trademark infringement. Microsoft, for instance, linked a site it operates to a page on the Ticketmaster Web site without obtaining Tickemaster’s permission. Because, among other things, this link bypassed Ticketmaster’s home page, Ticketmaster filed suit for both misrepresentation and lost ad revenue.

Furthermore, any of your profits that can be construed as resulting from a link (even partially) might one day be targeted by the linkee. Although division of profits from the Internet is hazy as far as current law is concerned, attorneys foresee that the issue may well be a trouble spot in the future. "It is, thus far, unclear how the legal system will deal with it," Eckstein reports.

The best bet for entrepreneurs is to either get permission from the linkee or avoid questionable sites altogether. Seek legal advice whenever you are uncertain of possible conflicts.

If a company in Austin, Texas, sells its products to a customer in Los Angeles, and the order is filled in Vermont, which state gets the taxes from the sale? (Pending before Congress is the Internet Tax Freedom Act, which would block states or cities from imposing new taxes on goods and services sold online. This bipartisan bill, endorsed by President Clinton, would let states tax Internet commerce only if the seller has a "physical presence" in the buyer’s state–the same policy that applies to mail-order sales.)

The issue of e-cash remains an ambiguous realm for the legal community. Many believe the financial services industry does not lend itself well to monetary exchange on the Web. Existing consumer protection laws, state licensing requirements, and contract and product liability laws are under scrutiny for their suitability to Internet transactions, but lawyers and judges do not have a body of cases to consult in reaching conclusions. While clear guidelines may be a few years off, your business will benefit from legal counsel if you are involved in any electronic commerce.

Excerpted with permission from Small Business Success, Volume XI, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration.