Restricting Purchasers By State

As he mentioned the Tommy Chong case, I am assuming he is worried about selling something illegal in a certain state.

Tommy Chong sold bongs and drug paraphernalia on his web site. In most places selling drug accessories is not illegal, only the drugs themselves.

But Chong had customers in states where selling drug paraphernalia was illegal so he was charged with selling an illegal product because he sold to people in that state.

In Chong's case it was physical products, so he could control the shipping.

I don't know what the liability is for digital products.

You could block access to the site from people in areas you cannot sell. There are ways of doing this. Many set it up to block spam traffic from certain countries like Russia and China.

You need to know the range of IP addresses from the state so you can block them. People could also use a Proxy Server.

I am not a lawyer, but you could have a check-box on the order form that says: "I certify that I do not live in the state of A, B or C"

Since you cannot control downloads, the user must certify they comply with your stated terms. If you get customers from banned states it would be through a fraudulent act and misrepresentation on the customer's part.

But if you had serious liability concerns, I would run that method past a lawyer before relying on it.

Mahlon

Laws prohibiting the sale of items must be complied with at the merchant level. In plain english: If it's illegal to sell something, sellers can't sell it.

The internet has complicated matters in that the point of sale (the buyer sitting at their computer) may be in a jurisdiction where an item is illegal and the seller outside of that jurisdiction. In those cases, the seller is putting himself at risk of criminal legal action in the buyer's jurisdiction.

The example of buying fireworks over state lines and then bringing them home where they are illegal is different since they were legal at the point of sale.