I am starting an internet business and have a few questions.

Terminology is very important. I'm not at all sure that what you've described is an "auction."

There is no getting around the requirement that you have to buy some time with a business attorney licensed to practice in California. You simply cannot start a business that involves winning something by virtue of some element of chance (i.e., the timing aspect of the contestant's "bid") for which people have to pay to participate w/o having that process reviewed for compliance with gambling laws. Avvo answers are not sufficient.

FYI -- your business model may (or may not) be perfectly legal and, if it is legal, then it may be patentable -- not copyrightable. Though the rules that determine the patentablity of methods of doing business have very recently been tightened (considerably) there is still quite a lot of uncertainty in the law on that issue at the moment. The Supreme Court has taken up the issue this term to address the matter but in the meantime you ought to speak with a patent attorney if you think your business model has not been tried before.

Good luck.

There are specific rules about operating "contests" in CA regarding disclosures, for example, in the CA Business & Profession Code, and a bond is requried for auctions under the CA Civil Code, so you should consult an IP lawyer to make sure what your planning to do contains the right combination of elements to follow the law.

The business model may be eligible for a business method patent, and since these take a long time to get and are quite complicated, you'll need an IP lawyer specializing in patent applications to help you with that.

The terms and conditions for this business really depend on how this business is structured, so is presuambly something the IP lawyer you consult can handle while dealing with the the first two issues.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.