IN the world of the Internet, content is king. The most important factor in distinguishing between the hundreds of thousands of Web sites in cyberspace is the content they provide.
Even if you have a well-established set-up and a huge workforce, you may not be able to churn out all the content required on a day-to-day basis for your Web site. You will, therefore, need to source it from elsewhere.
Content is copyrighted material just like books and software are. Liability issues may arise if you place content on your Web site without obtaining permission from people who own it.
Under the Indian Copyright Act, the owner of a copyright has the exclusive right to decide where the copyrighted material should be published or displayed. He can choose to have the material published or displayed by one person or many. If any person other than those authorised by the owner publishes or displays the material, the owner can sue that person for violation of copyright.
If you have a suit instituted against you for violation of copyright, the valuation of your Web site may be affected adversely and potential venture capitalists and investors may think twice before putting money in your company.
Once you decide to obtain content from its owners, it is essential to lay down the relationship you are going to have with them. This is to be done through a content licensing agreement.
The agreement essentially deals with the terms of licence of the content. It lays down the parameters for your using the content, such as whether you can sub-license it, whether you can make changes and adaptations, etc. It may also deal with the arrangement of the content provider to update the content on a regular basis and the warranty of the provider as to the accuracy of the content.
It is important to obtain an assurance in the agreement that the content provided to you is owned by the provider. If it were not so, you may be violating the copyright of the true owner of the content. An indemnity clause in the content licence agreement stating that the content provider will indemnify you in the event you incur any liability as a consequence of the content not belonging to the content provider, or due to any inaccuracy in the content, is essential. This clause ensures that your liability is limited and you obtain greater valuation.
Obtaining of content rightfully and without violating the rights of third parties is essential when determining the valuation of the company. Merely downloading content from the Internet or copying it from magazines could leave you exposed to liability and could undermine your valuation. So the next time you think of putting that perfect picture from another Web site on yours, stop, think about it and license the same!
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