Electronic Frontier Foundation attorney Fred von Lohmann told the startups attending the Web 2.0 Expo this week that they should run their business plans by lawyers to anticipate litigation by intellectual property holders. On one level, this is good advice. Entrepreneurs and technologists too often ignore legal and policy issues that could trip up their businesses. And there are certainly business ideas out there that clearly violate legal requirements. Better to consider the risks ahead of time.

On the other hand, it’s somewhat sad that, even as the technical and operational costs of starting an Internet business are plummeting, the legal costs seem to be rising. This includes not just the direct expenses to pay the lawyers, but also the crushing uncertainty when investors and customers can’t be sure a company will survive the legal threats. And that uncertainty is real. Digital copyright law is unsettled in many key areas; the answers are often not obvious ahead of time. Google, with its vast warchest and other resources, may be able to take risks around intellectual property, but most startups don’t have that luxury. (YouTube is the exception that proves the rule.) So the question becomes, how to balance copyright holders’ legitimate concerns about protecting their rights, against innovators’ desire to deliver new services to their customers.

At Supernova 2007, noted lawblogger Denise Howell will lead a Challenge Session workshop on these issues. Fred von Lohmann will be joining us, as well as Morgan Lewis partner Ron Dreben and YouTube General Counsel Zahavah Levine. It should be a rather lively discussion!

Original post from the SuperNova blog by Supernova Weblog