HN Explorer

Ask HN: how do you deal with legal stuff when you are bootstraping?

11 points by rush-tea ↗ HN
When you are bootstraping, how do you deal with the legal stuff such as term of use statement, privacy statement, NDA, etc? Do you hire someone to draft them for you? Or is there a site with a generic format that you can use?

Thank you. :)

13 comments

[ 2.0 ms ] story [ 43.9 ms ] thread
tonyjwang
Unless you have a legal issue unique to your startup, you can always get general legal advice from mentors and advisors and the HN community - someone just asked about terms of service, for example. You're probably too small for anyone to care to sue you.

But if you're raising money, having contracts signed, you really should work with a lawyer. Asking other startups in your area who they used is a good first step - you want to find a lawyer who specializes in working with early-stage companies, who can avoid some of the legal traps, many of which deal with tax issues associated with stock options and entity conversion. My personal opinion is that there's no good substitute for a good lawyer - using forms from LegalZoom just seems like a really bad idea.

I would also suggest getting a lawyer if your startup business model depends on a fine-tuned understanding of the law. For example, just the other day, a startup that was copying the structure and pagination of textbooks was sued by Pearson and other major textbook publishers. They're venture-backed, which probably means they consulted lawyers and understood the legal risks beforehand. Before spending tons of resources, I think you might want to know whether or not what you're doing is illegal, and whether you are prepared to deal with the legal risks.

Disclaimer: These statements are merely my personal opinions and do not constitute legal advice.

rush-tea
Thank you for your opinion. No, I don't have legal issue, yet, with my startup, but I am within weeks to go beta launch and curious about term of use, privacy statement. I notice each startup has these on their products (whether it's website, mobile app, custom program, etc), but I wonder how do they get it. Do they have someone draft for them? Or is it a generic statement they can just use temporarily? I am bootstrapping now.

Of course, if my startup gains traction and grows, yes, I will definitely consult lawyer, but since it's still in its infancy, I wonder if it's really necessary to get lawyers just for term of service, privacy, NDA statement.

Thank you.

tonyjwang
For terms of use, another post mentioned modifying Wordpress's terms, which are under a Creative Commons license. For privacy policies, this area could be a little bit trickier if you have an open beta - if any of your users get pissed off that you did something with their data, and your privacy policy isn't up to snuff, you might be in for a world of hurt. With a closed beta or if you're not dealing with extremely sensitive information, I wouldn't worry as much.

Like I said before, a good startup lawyer in your local area is worth their weight in gold. For the basics, you can probably find a dozen lawyers who have worked in big firms who are working for themselves now advising startups like you, without having to spend what little cash you have. Some coworking spaces have lawyers too - and they're usually happy to help and often have structured office hours.

tstegart
Legal terms cannot be copyrighted, so feel free to take a look around and cut and paste from some sites you like. Most of the terms can be figured out pretty easily, its the ones you leave out because you're not a lawyer that will come back to bite you :)

That being said, it doesn't matter much if you're not raising money, like others have said. Your chances of ever needing them are very low, they're mostly for show and do more to make you look like a real company than they do to protect you. Its like insurance, what start up buys insurance? Your chances of being sued are so low, it barely registers. Just copy the terms of a site that's like yours and go with it.

Once you raise money, change your tune and hire a good lawyer. Money needs to be protected :)

rush-tea
Thank you. I was thinking of copy and paste from some sites that I have seen so far. But Mz post said otherwise. This is exactly my concern. Mz post states that his disclaimer is used by legal permission. Now to me, this seems to contradict what tstegart and me believe. If legal terms can not be copyrighted, then why would Mz require someone consent, the author in this case, to use the disclaimer? I want to avoid this situation if lets say I use facebook or google term of use word by word and then they sue me?

so now i m confused...

i understand that my project is nothing, and the chance of getting sued is almost 0 because i have no traction, but if it's legally not right, then i want to avoid the risk.

thank you for the advise.

Mz
To clarify: I said a specific individual advocated I cover my ass and encouraged me to use his disclaimer as a starting point. That doesn't contradict what other people here are saying. I have no idea if you need permission to adapt something like that. I am not a lawyer. I was only telling a personal anecdote as to where I got some of my legal language.
tonyjwang
I don't think tsegart is quite right on this one. Anytime you "express" words on a page, those words are copyrighted. Expressions are distinguished from more functional/factual considerations like labels, page numbers, math equations, etc.. So, my guess is that terms of service would likely be considered a copyrightable expression, just like software code, novels, and company manuals, because they are a manifestation of a lawyer's expression.

Assuming you copied Google or Facebook's terms of service without their permission, you would be in technical violation of their copyright. What they would sue for is less clear - unlike copying music, a textbook, or someone else's code, you're not really harming Google or Facebook's revenue through your copying like you would if you copied a competitor's design. In the extremely rare .00001% chance that Google's legal team decided to sue you, you're probably looking at a court-ordered takedown notice.

However, this discussion is largely academic. No one is probably going to sue you when you're bootstrapping and you can hire a real lawyer to change your ToS later. There's a good discussion of this on metafilter:

http://ask.metafilter.com/74055/Can-one-copyright-a-legal-ag...

Disclaimer: This is not legal advice, just my personal opinion. If you want to rely on someone's advice, hire a lawyer.

rhizome31
This is a great question, which I'd love to know more about myself. You mentioned legal documents. I'd also love to know more about protecting your domain/product name from potential trademark issues. Even if your domain name doesn't infringe anyone's trademark today, how to prevent it from happening in the future? How to deal with that in a global market? I'm not much worried about people stealing my ideas, but rather worried about people preventing me from developing my own idea. Any book recommendation on the subject would be very welcome.
[dead] losethos
God is just. That's all you have to know.

God says... Microsoft how_hard_could_it_be yikes now_that_I_think_about_it fer_sure Percival how_could_you dude_such_a_scoffer losethos these_cans_are_defective I_forgot music OperatingSystem unemployment umm you_think_I'm_joking zoot meek are_you_feeling_lucky get_to_work yuck it's_my_world Yes_you_are I_quit don't_even_think_about_it I_donno Give_me_praise

tonyjwang
Again, not legal advice, but you can look at how ICANN resolves domain name disputes:

http://www.wipo.int/about-ip/en/studies/publications/domain_...

What factors guide the panelists' decisions?

-Whether the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights. -Whether the respondent has any rights or legitimate interests in the domain name (for example, the legitimate offering of goods and services under the same name). -Whether the domain name was registered and is being used in bad faith.

So don't try to use a famous trademark to boost recognition or traffic to your site and don't try and squat on other people's domains. If you prefer to be cautious, you can search whether or not the domain name you have (and anything similar) is already a registered trademark.

tonyjwang
To protect your company's domain, you can file a dispute with ICANN. I don't think it's necessary to register your trademark first, but having a registered trademark does help in the dispute proceedings. If you do need to register, hire a lawyer to do this.

If it were me, depending on the circumstances, I would probably wait to register a federal trademark until a Series A round, since you have other things to worry about before then.

Disclaimer: This is not a legal opinion, just a personal one.

Mz
FWIW: The legal disclaimer on my health site was adapted with permission from the legal disclaimer of a published author who has a PHD. He expressed concern about my legal exposure and had been hauled into court or something himself at one time for doing similar kinds of work. He advised me to put up a disclaimer and encouraged me to adapt his and sent me a copy. More recent language on the newer front page grows in part out of the fact that I worked for an insurance company for five years, where I received annual training in some of the federal laws that could potentially impact my health site. I state clearly that what I do is not medical. It is about eating right and making lifestyle changes.

I would also recommend being careful, considerate and sensitive. Politeness and manners help avoid situations that could require a lawyer.

Best of luck.