Legal issues beginning to impact charitable fundraising on the Internet
By Merv White
Canadian FundRaiser: March 29, 2000
More and more charities are turning to the Internet as a way of reaching
potential donors very efficiently, and through global and local outreach
greatly expanding their donor base. The range of Internet techniques
available to garner donations and goodwill is expanding rapidly, among them:
- passive solicitation,
- active solicitation - e.g. spamming,
- links to storefronts,
- permission marketing, and
- commercial / charitable partnerships.
Despite popular belief to the contrary, the Internet is not lawless, and is
governed by all of the same laws which affect us in our daily lives. In
fact, maintaining a web site can expose a charity to a variety of criminal
and civil sanctions if it is not careful.
1. Territorial jurisdiction; "Whose laws decide?"
The Internet is international, and a charity's web site can be viewed
anywhere, in the process exposing it to the laws of potentially any
jurisdiction anywhere in the world. A good example would be Alberta's
Charitable Fund-Raising Act, which raises the question of which jurisdiction is applicable for many Canadian fundraisers. This increasing degree of uncertainty in determining
the applicable jurisdiction should make charity web site owners doubly
cautious.
2. Intellectual property laws
All intellectual property laws are applicable to the Internet, including
copyright and trade-mark law, and unauthorized use of material created by
someone else may expose a charity to an action for copyright infringement.
There are, however, a variety of ways in which you can avoid civil and
criminal actions, mitigate copyright problems, and strengthen your defense
when facing charges of copyright infringement, among them:
- ensure that you own your website;
- obtain all necessary assignments and licenses for your website content;
- obtain waivers of moral rights from contributors to, and creators of your website; and
- be aware of the danger of copyright infringement through framing,
hyperlinking, or vicarious infringement.
Trade-mark problems can arise from domain name confusion, posting
trade-marks on your website; hyper-linking; meta-tags, that part of the
html code included in Internet web pages to provide information used by
search engines to index web sites; dilution of other trade-marks; or
'passing off' (using reputation of another organization - deliberately or
otherwise - to benefit yourself).
3. Domain name difficulties
Domain names are an area of great contention and uncertainty at present.
If, for example, the domain name you have chosen is the trade-mark of
another organization, you may be exposing yourself to an action for
trade-mark infringement. For the same reason, you should ensure that your
charity has taken all of the appropriate steps to secure its domain name;
otherwise you may find it necessary later to purchase your own domain name
from someone who had the prescience to register it first.
Privacy issues are also a growing concern on the Internet, leading to new
federal, provincial and international legislation; sanctions for
inappropriate collection of personal information; and common law torts
relating to privacy, misappropriation of personality, false association,
and unreasonable intrusion into someone's private affairs.
4. Civil actions on the Internet
These can include or involve defamation (libel and slander), interference
with economic interests, passing-off, trade-secrets and breach of
confidence, and negligence. Defamation, for example, can occur easily on
the Internet. Emails can not be considered as privileged or private
communication, and Bulletin Boards and Chat Rooms allow the disenchanted to
defame others;
Charity website owners should thus carefully review anything posted to
their sites. The use of a website to criticize the business practices,
wares or services of others can lead to actions for interference with
economic interests if such use leads to breach of contract. Passing-off can
occur if a website is used to promote goods or services in the name of
another, or if it is designed to prosper from the goodwill of another
organization or individual. Trade-secrets can be passed easily over the
Internet, and breaches of confidence can occur easily, albeit
inadvertently, through inappropriate use of eMail, or improper or
inadequate security measures.
Negligence can include statements posted on a website which are relied upon
by others to their detriment, in situations where it would reasonably be
expected that such reliance would occur or where information pooled on a
website has not been updated.
5. Criminal actions on the Internet
Criminal law also applies on the Internet, involving the still uncertain
issues of jurisdiction, illegal speech, criminal libel and gaming.
Illegal speech includes "Every one who, by communicating statements in any
public place, incites hatred against any identifiable group where such
incitement is likely to lead to a breach of the peace…" and "every one who, by communicating statements other than in private conversation, willfully promotes hatred against any identifiable group..."
Criminal libel is defined as "...a matter published, without lawful
justification or excuse, that is likely to injure the reputation of any
person by exposing him to hatred, contempt or ridicule, or that is designed
to insult the person or, or concerning whom it is published..."
Gaming and betting is regulated through numerous sections in the Criminal
Code. Issues of jurisdiction are significant here, and generally, gaming is
prohibited unless regulated by a provincial government - section 207(4)
(c), for example, requiring that any lottery scheme using a computer be
operated by a provincial government. Thus when considering a gaming
approach to your fundraising operations, bear in mind evolving government
policies, such as the recent State of Michigan statement that it will try
individuals under Michigan law if they offer gambling over the Internet to
Michigan residents.
To reduce and/or avoid these problems - under both criminal and civil law -
limit employee access to your website to reduce the likelihood of being
subject to vicarious liability, as an employer, for their actions; limit
access to the website to invited guests; monitor what is posted on your
website regularly; use security measures; and include disclaimers. Finally,
follow these easy rules of thumb:
- Don't use what is isn't yours, or attempt to gain benefit from the work
of others without first obtaining their permission;
- Ensure that you use your web site in a civil manner, always with an eye
to how others will receive what you have to say;
- Remember to maintain control over how your web site is being operated;
- Ensure that only a limited and trusted number of employees have any
control over what is placed on your web site;
- Maintain confidentiality of information obtained and used; and
- Operate your web site with an eye to the effect that it will have
throughout the world, and not just in Canada or the United States.
Presented at the 2000 Annual Church & The Law Seminar, on February 2, 2000,
by Mervyn F. White, a partner in Wardlaw, Mullin, Carter, Thwaites & Ward,
235 Broadway Avenue, Orangeville, Ontario, L9W 2Z5. For more information
call (519) 941-1760, fax: (519) 941-3688, eMail , or
visit www.wardlaw.on.ca.
