Posted by arlene

Like E-mail, Web access has many legitimate business uses. But staff access to the Web or other downloads, such as file transfer protocol (FTP), opens up the door to data, software, and documents that can harm the company.

The business risks associated with improper Web use and downloads include serious human resources issues as well. Web browsing and surfing by employees, and the distribution and display of files retrieved from the Internet, can lead to claims of discrimination or sexual harassment, criminal investigations, and multimillion-dollar infringement actions. The types of online use that are most likely to generate liability:

¨ Downloading copyrighted material

¨ Online gambling and other crimes

¨ Obtaining illegal material

¨ Displaying or distributing harassing materials.

INFRINGEMENT

The web sent copies of every file on a Web page to each machine as the page is requested. Most legal scholars understand this to mean that under U.S. copyright law Web users have been granted an “implied license” from the site owners to make that copy, at least for the purposes of viewing the page on a computer screen.

This notion of an implied license assumes, however, that the designer of the Web page has the legal right to grant licenses to the page’s content, and that the only use will be for a one-time viewing by a single individual. What happens, though, when materials are included within a Web page to which the page’s owner does not have licensing rights, and when users save Web-based files onto a hard drive and reuse or redistribute them? Some copyright holders send cease-and-desist letters to each infringing site that they find. Those holders will tell you, though, that their letters are often ignored; new sites are established faster than they can send more letters out. Most owners of pirate sites are young, often students with few assets against which a large record or television production company or software publisher can seek damages.

What many aggrieved copyright owners do instead is to work with others in their industry to enforce their rights against larger offenders, preferably those with deep pockets—in other words, the corporate world. The software industry has been aggressive in its tactics, especially following the formation of the Software Publishers Association (now the Software & Information Industry Association, or SIIA). The SIIA’s Web site at is filled with press releases about litigation against small and large businesses that have illegally copied software. Many times investigations are instigated by reports from disgruntled ex-employees. Often, the executives at the target company were not aware of the illegal software use until the subpoena or search warrant arrived at their desks.

Today, in addition to copying software illegally, employees are using their multimedia networked PCs to play the latest albums or watch digitized versions of last week’s South Park episode, and even to post their favorite files on the network server for everyone to view. It’s a frightening scenario. Large companies have difficulty auditing every file on every computer. Small firms can be seriously damaged or even bankrupted by the award in an infringement action.

THE DANGEROUS MIXING OF CASINOS AND CUBICLES

Historically, it would have been difficultfor employees to conduct high-stakes betting from their desks on a regular basis. But now we have the Web.

Online casinos are proliferating as entrepreneurs exploit the ease of credit card use online and the ability to reach potential players during their workday. Some countries and regions, including New South Wales, Australia, and the islands of St. Martin and Antigua, have been courting online casinos, promising freedom from regulation in exchange for a portion of the profits.

Regulators such as the U.S. Congress and state attorneys general have not ignored the growth of online gambling, which threatens not only the economic health of citizens but tax revenues derived from lotteries and casinos in states that permit them. Many legislatures have passed laws banning or restricting online gambling, and attorneys general from Minnesota to New York have brought successful lawsuits against casino operators who permit local citizens to participate in Internet gambling against state law.

Companies may find themselves in the middle of these battles because (as with infringement) the company providing the Internet connection for the gambler may be the biggest target within reach. Further, you can imagine an impoverished spouse going after a gambler’s employer because it failed to prevent the gambler from losing his life’s savings at the office. Another danger lies in many online casinos requiring players to download proprietary software–a virus or other harmful application could unwittingly be installed onto your company’s network.

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