A Checklist for Hyperlink Agreements
Copyright © 1998 Shelley M. Liberto. All rights reserved.
The World Wide Web is the most popular and most visible feature of the Internet. The Web consists of a network of computers and computer networks that is not under the control of any single authority. A Web surfer can access hundred of thousands of Web sites at any given time throughout the world. The key to the user's ability to readily access information throughout the network is the hypertext link on a Web page which, when activated, sends the user to another Web page.
To suggest that a contract or even permission is required to establish a link from one Web site to another is offensive to the original purpose of the Internet. The World Wide Web has grown so very rapidly because of the freedom with which a user can navigate between separate Web sites. No consensus exists for the need to obtain permission to link to another Web site. However, a hyperlink may incorporate copyrighted images or text which implicate intellectual-property rights. They may also be used as a means of attracting commercial customers. Hyperlinks therefore create commercial opportunities for license fees and advertising. Accordingly, persons designing, owning and using Web sites, either commercially or privately, should consider the safety that a formal written contract offers by establishing the rights and duties between the owners of the linking and linked sites.
Hyperlink Fees and Revenues
In the commercial environment, hyperlinks provide a tremendous opportunity for advertising exposure. A linking agreement should therefore contain a structure for payment for linking services from popular sites that have adequate exposure to the sort of customers who might be interested in the linked site's product or services. The link recipient may condition payment based on a number of conditions including successful transactions, actual traffic directed to the linked site, or a flat rate.
Under the transactions method, the linked site agrees to pay the linking site a percentage of gross income it receives from sales with customers identified as having been referred to the recipient by the linking site. Another method is simply to pay a fee based on the volume of traffic directed to the linked site. Finally, the simplest method for apportioning revenues and fees is the flat-rate method. As this indicates, the linked site merely pays the linking site a flat rate regardless of the success or frequency of commercial traffic.
Of course, unless the flat-rate method is used, the link provider is usually required to keep track of the volume of traffic for which it expects to be paid. One method is, as mentioned, the sample "hit" tracking system. The term "hit" is commonly used as the basis for measuring hyperlink traffic. In reality, however, a "hit" measures a single request for a file. Requesting a single page may involve calling up several files at once, thus registering several hits for a single-page visit. A more accurate method of measurement, therefore, would be to require the linking site to measure traffic to the originating page on a link-usage basis by measuring the number of times a user clicked on the link. Another method is the sample IP address-tracking procedure. This method calls for the link provider to electronically record each time a unique IP address requests a linked Web page. The link provider would invoice the linked Web site in a form that reports the amount of traffic for a given period of time and calculates fees according to the terms of the agreement. The linking agreement should allow for the link recipient to view the tracking records from time to time by way of audit to evaluate their accuracy.
Bandwidths and Response Time
Because different Web hosts have different trafficking capacities, any business contemplating entering into a linking agreement should set specifications for technical performance. The agreement should specify that the owner will reasonably maintain the Web server and take all commercially reasonable steps to ensure that the Web server is running 24 hours a day. The agreement may provide for a reasonable amount of down time for routine maintenance, and a credit for down time that exceeds a certain number of minutes or hours. Because a Web server may be run by an independent contractor to the link provider, the agreement should hold the link provider directly responsible for technical difficulties that may impede linking services.
From a technical standpoint, the agreement should also take into account the size of the bandwidth. A "bandwidth" is the amount of information that can be sent through a connection measured in terms of bits per second. Internet backbone providers offer various capacities to channel delivery of data. A "T-1" line carries approximately 1,544,000 bits per second, while a "T-3" line carries approximately 45,000,000 bits per second. A T-1 line may be fast enough for most Web pages, but it is generally not considered fast enough to carry full-screen, full-motion video. A T-3 line would be more appropriate for such a requirement. Instead of requiring technical specifications such as these in the Web linking agreement, the parties may simply choose to designate a required response time. For example, the link recipient may wish to include a provision for a response time that requires delivery of a complete home page within three seconds at least 90 percent of the time.
The explosion of the Web as a commercial medium has made Internet transactions increasingly complex. The legal implications pertaining to copyright as well as the commercial market for linking services call for formalization of agreements in a legal document. Absent such formalization, the parties risk an agreement fraught with misunderstanding that may result in a bad commercial decision or even litigation.
Shelley M. Liberto is an attorney specializing in software- and Internet-related issues. His Web page is located at http://www.libertolaw.com.