Kathy:

Welcome to the Legal Issues Presented By “Real-Time” Social Media with attorney Lisa B. Dubrow. This training session is brought to you by Subscription Insider.

My name is Kathy Greenier Sexton and I am thrilled you are here. I’m also thrilled our legal expert, attorney Lisa B. Dubrow, will be training us today. Welcome Lisa.

Lisa:

Hi, everybody.

Kathy:

I have seen Lisa’s slides that she’s about to present and we have a lot to get through. I’m going to make a recommendation for everybody on the line here. Turn off your phone, shut the door and put away any distraction. Today’s training session is going to be very informative and actionable so you don’t want to miss any of it. If you have any questions during our webinar, please use the chat box. In fact before we get started, if you can type in the chat box if you could hear me clearly, I would very much appreciate it. Just type in, “Yes. I can hear you Kathy. I can hear you.” Thank you. Yep. If you can just type something in so I know that you can hear me, that would be great. Great, I see everybody answering so thank you very much, Janice, Jeff, Katherine, Kent, Dana, really very much appreciated. As we get going I’m going to now ask everybody another question, what do you hope to learn today? As you answer that I’m going to answer a little bit about who we are and what Subscription Insider is.

As I mentioned at the beginning, today’s training session is hosted by Subscription Insider. I am the CEO, publisher and honestly I am a subscription geek who loves getting into the knitty-gritty of operating and growing subscription businesses. Anyone knows who is involved with running and operating a recurring revenue business … Whether it’s subscriptions, memberships, clubs, whatever. You know that running your business profitably, it takes a lot of work and managing a lot of details. That’s where Subscription Insider comes in. We are an information business. We publish daily subscription news plus how to guidance on running and operating subscription businesses. As you can see from this slide we cover a large range of topics. Today’s training session is part of our subscription, regulation and compliance coverage. Our goal today, like all we do at Subscription Insider, is that you will learn actionable information that you can use in your business right away. I would like to welcome Lisa B. Dubrow officially to the stage here. Lisa is our Subscription Insider guide to subscription, regulation and compliance.

She is a legal expert in the areas of bringing goods and services to market. As well as state and federal compliance with all methods of sales, including subscriptions, E-commerce, direct mail, telemarketing and negative option sales. Lisa is also a certified information privacy professional, certified by the International Association of Privacy Professionals. Say that three times fast, Lisa.

Lisa:

I can’t.

Kathy:

Lisa, thank you once again for presenting and educating us today to talk about the real-time legal issues around social media. Take it away.

Lisa:

All right. I will. Hello everyone. I’m glad that I’m here today to try to help you out. Marketing is difficult. Selling subscriptions or memberships is also difficult. I’m going to try and focus today in the hour that we have, on something that is very topical which has been coined as, “Real Time Marketing.” Which is basically marketing that’s based upon real time news events and trending stories, often used in conjunction with media or content that’s provided by consumers. Which is called user generated content generally integrated with social media platforms in real time. It becomes very difficult to manage this because real time means that it has to be done fast obviously. Today what I hope to do is talk about some of the legal issues presented by any type of marketing, but in particular real time marketing. Give you some tips and some tools so that you can be compliant when you’re using it to advertise your goods and services.

The legal topics that I’m hoping to cover today which are shown on the next slide Kathy, is first of all there’s a difference between editorial and advertising or commercial speech. It’s important to understand those differences and I’ll get into why a little later on. I’m going to talk about the basics of copyright, trademark, right of publicity. Also talk a little bit about testimonials and endorsements which we all know can be very effective in selling your products and services. Before I do I thought it would be fun to look at some of the differences between real time marketing and the old broadcast and print media. The next slide shows an advertisement. This is an actual real advertisement. We will call it yesteryear. The next one shows something that’s real time media, advertising by BIC in this instance that’s trying to capitalize on something that is presumably real, Happy Woman’s Day. Who knew? This is the type of thing that people are trying to do fast. The next one is a real ad. This is not sarcastic. This is not [inaudible 00:07:45]. “Blow in her face and she’ll follow you anywhere.” Obviously a little outdated today.

This is the type of advertising that we’re all trying to utilize, capitalizing again on what’s happening in the news. At this point this is even a little bit old, but trying to give you a flavor for the type of things that advertising marketers are finding very successful. Let’s get into the meat. The difference between editorial and commercial speech or advertising. The minute content is sponsored by an advertiser it becomes commercial speech. You’ve essentially lost some of the immunities that you get when you’re creating editorial commentary. You might have heard the term fair use. There is something in copyright called fair use which we will get into later, or parody, or newsworthiness. All of those defenses for things that you can use when you’re creating editorial copy goes out the window when you’re creating commercial speech. It’s important that you understand the difference because commercial speech is entitled to less protection as I said. Although the first amendment will protect commercial speech there’s a lot less protections afforded to you.

The next slide Kathy. There’s regulatory oversight by the federal trade commission, by the national advertising division of the better business bureau, by the food and drug administration among other regulatory authority. You can have a challenge brought by a competitor. What I’m going to get into today is that in some instances commercial speech has to be vetted differently. You need to look at something, recognize it’s commercial speech and then analyze whether what you’re utilizing … Whether it’s copyright, trademark, or right of publicity, can be done properly or whether or not you have to get permission because it’s commercial speech and not editorial speech. You also have to worry about claim substantiation when you’re talking about advertising. The question to ask yourself is whether or not either the advertiser or a media company or a brand, has participated in either the creation of the content or somehow sponsored it’s dissemination or publication. If so, you have commercial speech. In the 1960s there was a phrase called editorial. Excuse me, advertorial. Forgive me, advertorial which is obviously a combination of advertising and editorial.

It was always used at the very top of the page in small font, often gray on white. That was the terminology that advertisers used when they were combining editorial and advertising copy. Often as infomercials if you go back as early as the 60s, 70s and became very big in the 80s. Unfortunately the minute you have the combined editorial and advertising, from a legal analysis you need to be aware that you are now talking about advertising. It may have a combination of editorial and advertising speech but it is in fact advertising. There’s a small subset of advertising speech which is something called native advertising. That’s when the advertising matches the design, the style, the trade dress. In such a way that a consumer looking at it arguably would not be able to tell whether it was editorial or commercial speech. That is the problem from the point of view of the regulators and I will get into that later. Let’s delve into the first topic which is copyright.

It just so happens that when you’re dealing with copyright, it doesn’t matter whether you’re dealing with advertising or commercial speech from a legal analysis. From a risk analysis it might be different but not from a legal analysis. If you copy somebody’s copyrighted work, there’s a valid cause of action against you whether you’re dealing with editorial or commercial speech. I will say however, that the analysis that I just talked about a minute ago is still relevant with copyright. Because copyright owners are more likely to sue an advertiser than they are a person who’s utilizing or infringing their copyright. From a legal analysis it’s the same but the risk analysis I think it’s different, but let’s just get into copyright. Copyright protects the author’s rights and it’s his or her original works of authorship. You can violate somebody’s copyright either by directly copying it, or if you had access to that copyrighted work and you created something that is substantially similar to the author’s copyrighted work.

The owner of the copyrighted work obtains those rights immediately upon creation. The owner of the copyrights has the exclusive right to determine how the work would be reproduced, distributed, or even how another work can be created that’s based upon the original copyrighted work. That’s called a derivative work. Again, the author had the right to determine how their work is going to be reproduced, distributed or how derivative works could be created based on their work. Something that’s critically important to understand is that under the copyright law of the United States, there is something called statutory damages. That means that the copyright owner does not have to prove that they were harmed in order to get damages against somebody who infringes their rights. Under the statue there is a statutory damage of fifty thousand dollars for every copyright infringement. That can go as high as a hundred and fifty thousand dollars if it was done willfully. That means that if you infringe somebody’s copyright, there could be real damages that might ensue.

The first thing to do is to recognize that when you’re using somebody’s copyrighted work it’s really important … Again risk analysis. Important and editorial but also in commercial speech to get the permission from the copyright owner. Even materials that are created by consumers, posted on social media, or subject to copyright protection, which I think requires a little bit of an explanation because everybody looks at the social media platforms and they copy everything. They retweet and they repost and they re-pin. I get a lot of clients who call me and say, “Well, wait a minute. Isn’t it in the public domain? Can’t we just use it freely?” The answer’s, “No.” Let me explain a little bit how you can use it. When I post something onto my Facebook page, I am agreeing to the terms of service of Facebook. Facebook says if you post something you are giving us and everybody else within the Facebook platform a license to use whatever it is that you’ve posted. I posted text or I posted a photograph. I Lisa Dubrow am giving a license to everybody else in Facebook to use it.

However, I’m not giving a license for anybody within Facebook to list that content and use it someplace else. That’s number one. Number two, just because Lisa Dubrow posts an image on her Facebook page, doesn’t frankly mean that Lisa Dubrow really does own the rights to post that photo. Something as simple as a photograph that I post could be a copyright infringement for the following reason, if I ask a friend to take a photo of me and I post it onto my Facebook page, I am not the copyright owner. The person who snapped the photo is technically the copyright owner. That’s the person who created that photo. You have to understand that in the world of consumer postings and user generated content, there’s a lot of risk swirling around with consumers who post content and when you as an advertiser … We post that content or we use it for your own purposes. There is copyright risk. It’s something that you need to analyze and understand.

Now if you have permission to use a photo, you also have to be aware of what’s in the photo because sometimes there could be art work, or other things that are subject to their own separate copyright that’s depicted in the photo. That comes to play often when you have a photograph of something and there’s a famous work of art, for instance, or a famous building. Depending on how you’re using that photograph, you might have to not only get permission from the copyright owner, the person who took the photograph, but also from what’s depicted in that photo. That happens a lot with stock photography. You might get permission from a stock photo house to utilize that photograph but you don’t necessarily have the right to use what’s depicted in that photography. Sometimes you have to think about what are we actually depicting? Not just did we get permission from the person who owns the copyright?

Music also presents special issues. Not because there’s anything really different between music, artwork, or a photograph, or a test, but because when you have a piece of music there’s a lot of different parties that are generally involved. There’s the owner of the master recording, the record label. There’s the owner of the actual composition, the writer or the music publisher and there’s also another risk analysis. Consumers often list things from the internet. We all know that, but they often create things that are original. I would venture to say that it is unusual for a consumer to have created their own original music, if they’re posting a video and there’s music in the background. Lastly, just on the risk analysis in terms of music, the music industry tends to be extremely litigious.

Music just is one of the categories where many of us lawyers suggest that you not use user generated content in your advertising that has music, without making sure you have those rights. Another question I get a lot is whether or not if you give credit to the copyright owner, that would be sufficient? Now I can assure you that if you give credit to some blogger who’s trying to get as many hits as possible, they’ll be thrilled. Absolutely thrilled, but it will not necessarily give you any immunity at all under the law. I thought I would show a few examples of things that probably people thought would be fine to copy. When it was used in advertising all of these examples were subject to a pretty hefty damage award in copy right infringement claims. Here’s a photograph of a grizzly bear. My guess is the advertiser thought, “Oh. That’s a grizzly bear. Who would even noticed that it’s there?” Photographed the grizzly bear, but apparently the copyright owner did. It was the subject of a pretty hefty damage award.

The next one is an example of copyrighted text that was listed for advertising purposes. Brian Andreas is the writer of something called Story People. He obtained an award of nine hundred and sixty-five thousand dollars for this copy. You can see that it’s not exactly the same language as Brian Andreas’ language, but it was a derivative work. They took it. It was substantially similar to the original text and therefore Audi was caught and had to pay those damages to Brian Andreas. Watch out for lyrics, titles to songs. This is a very obviously common, common, common lyric. Some of these songs that are so common, people tend to think that because they’re used ubiquitously everywhere, that they are subject. They’re not subject to protection in the public domain, but I would never rely on assuming something is in the public domain when you’re using it for advertising purposes. In this distance this is deemed to be obviously an evocation of the song. The copyright claim ensued and they lost, or I should say the plaintiffs won.

You get into the situation where something is in fact in the public domain, but you’ve utilized various aspects that were created after the fact. Let me give you an example. Here is Frankenstein. Frankenstein is a character that was created a long time ago. In fact, Frankenstein the character is in the public domain and can be used freely by anybody. However, there are many elements of Frankenstein’s depiction that were only created in the motion picture. The motion picture is still subject to copyright protection. Therefore, the Frankenstein that was used in some television commercials for a car I think, was subject to copyright protection. Another really good example of that which I don’t have of photo for is the Wizard of Oz. The Wizard of Oz is in the public domain and so is Dorothy the character, but here ruby red slippers were something that was added by MGM in the motion picture.

Although you could use Dorothy in a television commercial or any type of commercial, you cannot use the ruby slippers. That is where the term expression comes in, in the area of copyright. There can be an idea or something that has fallen in the public domain, that’s not subject to copyright protection. The expression, the element that somebody else has added to that is what can still be protected. You need to dig a little bit and think. If you don’t have the time to think because you’re working so fast that something has to be done in two minutes, my recommendation from a very practical standpoint would be assume it is subject to copyright protection. There is a term that is used by non-lawyers which is isn’t it just fair use? Can’t we just fairly use a certain amount of music, a certain amount of text, eight bars of music, two lines from a poem? The answer’s no.

There is in fact a term of art called Fair Use under the copyright law, which is a defense to somebody’s utilizing a de minimis amount of copyrighted material for certain purposes generally in education. I will say the following, there are four prongs that are listed here. We can do an entire three hour class just on fair use which we’re obviously not going to do now. Judges have great discretion which we’re obviously not going to do now. Judges have great discretion how to determine whether of not something’s is fair use. You wouldn’t want to be in the court of law determining whether what you had done is fair use anyway. I will say for the purposes of this practical recommendation, do not rely on fair use for any commercial speech. It basically will not protect you. The difference between copyright and trademark is that the law of copyright protects the author. It protects the author who has the right to determine how his or her work is going to be used by others.

Trademark law in contrast protects consumers from being confused as to who is the stores of the goods and services their purchasing. You could copy somebody’s trademark without even knowing it. There still could be a trademark infringement claim because the law doesn’t really care too much about trademark owners. It cares about the consumers. If there’s a likelihood of confusion, as to either some sort of connection or affiliation or sponsorship or approval, there’s likely to be a trademark infringement claim. Or I should say a potential trademark infringement claim. If you adapt a new tagline, logo, slogan, hashtag, you should really make sure that you’re not infringing somebody else’s existing trademark. You’re not going to do a full trademark search on every single hashtag. We’ll get into hashtags in a while, but you should at the very least use a internet. Do a Google search, look around a little bit. Maybe get onto the United States patent and trademark office search function which is actually extremely easy to do.

Make sure that what you’re creating … Even if it’s in real time. Is not something that infringes somebody else’s trademark. Again practical advice generally in the advertising realm, permission is required for using somebody else’s trademark in most advertising. Having said that, there is more of a late person vernacular of fair use in the trademark law realm because not every use of somebody else’s trademark is going to be confusingly similar. If it’s de minimis, nobody’s going to really think there’s an affiliation or likelihood of confusion. If you’re doing comparative advertising you obviously need to use somebody else’s trade name or trademark in order to compare your product to somebody else’s. The concept of fair use in more of this is a small use and it’s the only way that I can advertise this, does exist in the trademark realm.

I guess what I will say is that when you’re using somebody else’s trademark, think to yourself, “Is there a possibility that there could be some confusion? If there is, then you have the potential for copyright infringement. In case you thought that, that was so simply, I’m now going to throw a little wrench into that analysis which is we also have under trademark law, tarnishment. You really are not supposed to be able to denigrate somebody else’s trademark and dilution, which is a little bit harder to explain in a short version but I will try. If you have a famous mark and another person is using that famous mark … Even in a way that is not necessarily likely to cause confusion in the marketplace that they are affiliated. There is something called dilution where the courts have held that you’re diluting the good will associated with the famous trademark owner’s rights. An example of that which I think is actually hilarious … It’s an old, old case but I love it. You could actually own trademark rights to trade drafts. Hershey’s owns trademark rights to the way that they package their chocolate bar.

This is an example of a furniture store who had an advertisement for Art Van. As you can see, they’re tearing what’s inside the van and presumably it looks like a Hershey’s chocolate bar. I have to tell you, if somebody bought this to me and asked me to review it I probably would not have thought of a Hershey’s chocolate bar. Guess what Hershey’s did? They sued and they won on the issue of the Art Van Furniture advertisement diluting the value of the Hershey mark. My guess is that it was done intentionally because sometimes when you look at a case like this and you go, “Gee. I wouldn’t have thought of that. I wouldn’t have thought of the connections,” is generally evidence that it was done intentionally. Another example of that might also be Tiffany’s. You can have Tiffany jewelry and obviously if you name your diner Tiffany Diner, nobody’s going to think that you’re somehow associated with the Tiffany trademark. Tiffany over the years and other owners of famous marks have won a number of lawsuits, preventing people from using their name because  it would dilute the value of their own famous mark.

Let’s move on to the right of publicity. Right of publicity is one area where the analysis of editorial and commercial speech is critical. Because if you take a picture of me walking down the street, on a beautiful sunny day in New York city and you write an article about how gorgeous it was in New York on Wednesday … You’ve slashed that front page of the New York Times, as long as that photo was taken of me in a public place I’m not going to have any cause of action against you. However, if you take that same photo and you use it in such a way to advertise your goods or services, I will have a cause of action against you for something called the right of publicity. I have a right to control how you’re going to use my persona for commercial purposes. That could include my name, a photo, a drawing, a nickname, a sound alike, a look alike, an identifying characteristic that I might have and even social media handles.

Some of the more famous cases over the years … We’ve got one with Woody Allen which is shown on the next slide. This is American Apparel took his image, created advertising. He sued and won. That’s a pretty classic, typical, utilizing the likeness of a celebrity for advertising and trade purposes. Pretty clear cut violation of the right of publicity, but then we run into an interesting case which is not a very clear case law but wasn’t at the time. This is a gentlemen who in fact is not Woody Allen. My guess is before this lawsuit he probably made a fair amount of money as a lookalike for Woody Allen. My guess is he probably did a lot of Bar Mitzvahs. In any event, after this case I think his career went up in smoke because it was deemed that any lookalike of an individual was sufficient to violate … In this instance, Woody Allen’s right of publicity. If that case wasn’t enough another court decided after that, that a lookalike was also a problem.

In this advertisement from the 1980s every celebrity in that photo … I don’t remember some of them because it’s the 1980s. Who remembers? But you can see Rick Gordon and Gene Shalit. In the very far background in the middle is what looks like Jackie Onassis. I can assure you that Jackie Onassis would not have associated herself with anybody and she didn’t. She won the lawsuit against Christian Dior for this advertising. Lookalikes, you cannot use any more than you can use somebody’s actual photo without their permission. Fast forward to something that’s far more recent than the 1980s. We have a situation where Michael Jordan sued for the use of his name. After he was inducted to the Hall of Fame in 2009, Sports Illustrated ran a commemorative issue. Some advertisers created their own congratulatory ads in that issue. Here are two congratulatory ads saying, “Wonderful. Isn’t that great? Michael Jordan. Terrific.” Unfortunately instead of saying, “Thank you so much,” Michael Jordan sued. He won eight point nine million dollars against Dominique’s for the use of this ad. I don’t remember how much he won against Jewel-Osco but it was a substantial amount.

Something to think about even though it was a congratulatory ad, is there’s no question. Both of these advertisers were trading off of the good will. I mean they were using Michael Jordan in their advertising, clearly referencing their product or services. Obviously Michael Jordan makes a lot of money licensing his name and likeness to various advertisers. One of the things to think about with celebrities is sometimes they have to sue, even if they’re not ticked off because they have exclusive relationships with advertisers who’ve paid them a ton of money to use their name and likeness. They don’t even have the luxury of sitting back and saying, “I don’t care.” I’m not suggesting that this is the situation with Michael Jordan. I’m just telling you it’s not quite as simple as, “Oh. That celebrity won’t care. We’re doing something really nice.” In fact any use of a celebrity’s name or likeness or persona … We’ll talk about what persona is in just a moment. Is a violation of the right of publicity and can be a legitimate tie damage award against you. Tweeting.

It doesn’t matter whether you tweet or you do a traditional print ad like the one that I showed you before. It doesn’t matter what vehicle. If it’s sponsored by an advertiser remember it’s commercial speech. Duane Reade tweeted a photograph that paparazzi had taken of Katie Heigl coming out of a Duane Reade apparently with two large packages. They went so far as to even imply that she loved Duane Reade with a hashtag, #NYC’s favorite drugstore. She sued, claiming misappropriation of her name and likeness which is the right of publicity. The case settled but this is a very recent example of it doesn’t matter what vehicle, what medium, utilizing anybody’s name and likeliness for advertising purposes is a risk. Obviously utilizing a celebrity’s is a higher risk. Now unlike copyright infringement where you have statutory damages, it doesn’t really matter who’s copyrighted work you’re taking when you do a analysis of the risk. In this instance, in the right of publicity situation, you do often have to prove damages. Many, many, many courts have held and given money awards for people who were not famous when their names and likeness were used for advertising purposes.

Because for the most part advertisers do pay people to be there spokespeople even if they’re not famous, but clearly when you’re reusing a celebrity’s name and likeness the potential for damages … It goes far higher. Here’s a situation just to show that politicians aren’t fair game. There’s no such thing as fair use when it comes to the right of publicity and here we have President Obama and the White House called Samsung out. There was no lawsuit in this instance but you don’t really want to get a phone call from the White House. Persona. Let’s talk a little bit about the right of publicity and what you can get away with. This was a very, very famous case from the 1990s. Vanna White, for those of you who are young on the phone, was the spokesperson or the hostess. In those days it was hostess, of Wheel of Fortune. She was known for wearing gowns, blonde wigs and she turned the letters on the Wheel of Fortune. Samsung came out with a commercial where they utilized a robot, literally a robot as you can see, wearing a blonde wig.

If somebody had come to me in 1992 and asked me, “Whether or not this violate Vanna White’s right of publicity?” I probably would have said, “No,” but that’s because my client wouldn’t have told me all the facts which is every single story board, every reference, every presentation up to the commercial that was sent to the network, called this the Vanna White commercial. The court held that there was no way that Samsung could take the position, that they didn’t mean it to be Vanna White, obviously. This has now created precedent. At this point in time anything that evokes someone’s persona is a death toll in terms of thinking you could get away with it. It is a violation of somebody’s right of publicity. I lifted this photograph from the internet. I have in fact done a copyright infringement but I really wanted to show an example of the naked cowboy because he obviously has unique attributes. If nothing else his body and how he dresses.

You would have to get permission from the guy who’s running with the t-shirt that says, “Obey,” as well. Not to mention some others but I just wanted to show you that it doesn’t have to be somebody’s full on face. It could clearly just be their body. A very famous case that actually held that comes from again, the 1980s. A big decade for the right of publicity which is shown on the next slide. A woman and her toddler apparently were skinny dipping and a photographer shot their photo. Years later he sold his photos to a stock photo house and herbal Concept used it to talk about their diet. The husband sued. The husband and wife sued and the court held that it was sufficient that the husband recognized the wife for it to be a violation of her right of publicity.

It’s conceivable that nobody else would have recognized these two people shown in this advertisement, but it was enough that her husband did. There’s always the exception. In today’s social media real time marketing marketplace … Say that three times fast. You do have the examples of marketers who’ve done something that us lawyers would have cringed about and gotten away with it. Here we have during the Grammy Awards … You can see there. We’ve got the hashtag Grammys. Arby’s reaching out to Pharell, noticing his hat looked just like their logo and saying, “Can we have our hat back?” Low and behold a couple days later, he responds and it gets a number of hits. It’s a trending topic and it works for Arby’s. What do you do with that information? I don’t know. As an attorney it’s tough because here we have not only a potential false association between Arby’s and the Grammys by using hashtag Grammys, we also have the use of Pharell which is clearly a violation of his right of publicity. He didn’t care. He didn’t care, great for Arby’s. Grammys never came after them. Great for Arby’s.

I’m going to leave you with that confusing thought. What I will say is that Arby’s probably has an entire legal department at their disposal, in house. It is either conceivable that their lawyers never knew or that somebody said, “You know what? What’s the risk?” That happens all the time. My job today is really to identify what the risks are so that you know what you’re doing and you do it mindfully. Not necessarily to say stop doing everything but I would never have approved this use. It was very successful for Arby’s. Finally just in the issue of right of publicity, if you’re going to ask for permission, don’t do it after the fact. This was a post by a mother of a child wearing Crocs, totally adorable, pink hat, pink Crocs. Crocs loved it, wanted to use it, asked for permission. The only problem is they asked for permission after they used it for trade and advertising purposes.

This however, I also wanted to show. Not only for don’t be stupid and do it after. Do it before, but also I think it’s a really good example of how you can in real time ask for permission and get permission. This is an example, although they did it too late, of Crocs saying, “We love your picture. We want to use it. Can we use it? If so, let us know.” That hyperlink, URL, tiny URL, went to terms and conditions of how we’re going to use that photo for advertising and trade purposes. If you want to do something like this I can help you do it, but get permission before you use somebody’s likeness in advertising. This is an example of a photo of a child. The last thing you want to do is use a child. I would put a child up there with celebrities because adults, parents and legal guardians are often not very happy when their child’s face is used for trader advertising purposes without their permission. In fact Crocs got a lot of bad press for their use of the photograph because they didn’t ask for permission upfront.

The next topic that I want to talk about are consumer testimonials. Consumer testimonials are incredibly persuasive. They’re so persuasive in fact that the federal trade commission has guidelines on how to properly use them and has coming out recently saying they are so persuasive. They have done a number of enforcement actions against false and misleading consumer testimonials. I want to talk a little bit about how to do it right. The first thing is that endorsements have to be truthful and not misleading. You can’t just go out and create testimonials that aren’t true which a number of advertisers have done. Guess what? A lot of advertisers have gotten into trouble. Not only FCC gone after advertisers who have done that, but even the AGs has. The New York attorney general … A couple of years ago. Went after a lot of small companies intentionally, sending a message that you can’t get away with it just because you’re quote, unquote, “Under the radar.” What a number of companies had done … They have had their employees create fake reviews and fake testimonials about products which were obviously not an accurate consumer testimonial.

Another thing to worry about with endorsements and testimonials is if you are utilizing them for your trade and advertising purposes. You’re taking a consumer testimonial and you think it’s wonderful. You get permission from them and you want to use it in your advertising. You have to be careful because you’re now the mouthpiece of that consumer and you need make sure that what the consumer has said is actually true. If a consumer thinks that your olive oil cures their cancer and you don’t have proof that your olive oil can cure cancer, even though the consumer said it did, you’re not going to be able to use the testimonial in advertising. Finally if there’s a material connection between you, the marketer, and the person who is providing the endorsement … Either because you paid or you asked them to do it and we’ll get into that in a minute. You need to make a clear and conspicuous disclosure about that material connection. Let’s get into that next because that’s really a hard one to kind of figure out.

The Federal Trade Commission has made it really clear that any material connection between and advertiser and a endorser has to be disclosed. It doesn’t matter whether you paid them outright, whether you hired them as influencers, whether you’ve provided discounts, even free product. Even something as small as an incentive, like an entry into a sweep stake can be deemed enough of a connection between you, the advertiser, and the person who’s providing an endorsement or testimonial that it has to be disclosed under the law. That disclosure of that connection has to be clear and conspicuous. That’s a legal term of ours. It has to be upfront in a blog. It can’t just be on a header on some webpage. The Federal Trade Commission has said that if it’s in a video and the video is long, it has to be mentioned many times in the video. We’re not quite sure what long is but I have some thoughts on that.

The Federal Trade Commission very recently came out and said that any disclosure has to be in the beginning of a tweet. Not the end of a tweet, but honestly I think that’s crazy. To date I haven’t seen advertisers doing that. Some of the right ways if you’re dealing with tweets or hashtags would be to say #sponsored, #add, #sweepstakes #spon, S-P-O-N. An abbreviation for sponsor has been deemed not clear enough by the Federal Trade Commission. I am nearly the messenger. I think they’re crazy but hopefully nobody from the FTC is on the phone today. “Promoted by,” is no longer sufficient. The Federal Trade Commission feels that, “Promoted by,” does not adequately convey to consumers that the advertiser has paid for or somehow sponsored that testimonial. We talked before about native advertising where I mentioned that it was a sub category of commercial speech. That’s when something is embedded in what would otherwise be deemed to be editorial copy in such a way that the consumer would not necessarily know

The Federal Trade Commission entered a consent order against ADT which is a security system, because they had a segment on … Not only Kathy Lee and the Hoda show, but also on Fox news and I think on a few others. A couple minute segment where they were talking about security systems. Although I didn’t watch it, I presume that they said good things about ADT since it was sponsored by ADT. The problem is that the show did not disclose that they were sponsored segments. In essence they were advertising without being counted as advertisement. Therefore, were false and misleading. As I have said briefly before, if you have consumer testimonials and you’re using them in advertising, you need to also comply with the laws. One example of that is shown by a Pinterest board that was created by Nutrisystem. Nutrisystem asked their consumers to post their real results, their after pictures after they’ve used the product. All of these people took pictures of themselves. I assume that these were accurate after pictures.

They told real stories about how many pounds they had lost. It just so happens that in the category of weight loss you need to say what a typical consumer … Well actually in any category you do have to convey what a typical consumer’s experience would be with your product and service. Weight loss is a good way to explain this. A number of these people had lost forty, sixty, whatever, how many pounds they indicated. Nutrisystem on its website does convey typically consumers would lose one to two pounds a week and say whatever it is they have to say. Unfortunately that disclosure was not clearly and conspicuously disclosed on the Pinterest page. This was deemed to be a violation because the testimonials that were induced to be pinned by Nutrisystem asking its consumers to do so, did not comply with other laws that had to do with testimonials that do have to do with claims, substantiation and support. I talked a little while ago about how the sweepstakes entry can be deemed to be enough incentive to have to convey that there’s some material connection.

Let me just explain this one, Cole-Haan conducted a promotion where people were called to action that people should post pictures of Cole-Haan shoes with the #WanderingSole. Anybody who did that would be entered into a sweepstakes that would have a random draw so they would win a prize. “That entry,” said the Federal Trade Commission, “Was sufficient to be a material connection between the advertiser and the entrant.” “The reason being,” says the FTC, “That all of a sudden Pinterest or any other social media platform where this might happen, is getting all these photographs of Cole-Haan shoes. Consumers were likely to believe that people just loved Cole-Haan shoes. The pictures of the Cole-Haan shoes did not convey the inherent bias of the consumers who were giving an incentive in order to post those pictures. How do you get around that today would be to include the word sweepstakes or contest in your entrant hashtag.

Here is an illustration of a very big case that occurred relatively recently, the Federal Trade Commission against a company called Machinima. Machinima was a sub agency of Sony who had an agency who subcontracted out getting testimonials and endorsements or advertising in some way. They chose testimonials and endorsements of its new Xbox game. Machinima had it’s employees create fake reviews, fake testimonials and endorsements. Did not disclose that they were employees and or that they had been paid to do so. What’s interesting about this case is not so much that the Federal Trade Commission went after Machinima because they did something that we now know is false and deceptive. Not true so you can’t do it. What’s interesting about this case from my advantage point, is that the Federal Trade Commission declined to go after either Sony or that agency. The reason why the Federal Trade Commission didn’t go after either of those entities is because they in fact had done everything right.

They had a contract in place that said if you use influencers or if you use testimonials and endorsements, they have to be accurate. You have to disclose if they’ve been paid. They monitored what their agencies were doing. They actually had monitoring in place which is very important. It’s not enough that you just have a contract with a third party and then close your eyes and hope that they do it right. Sony actually monitored it’s agency. What happened with Machinima happened in spite of all the good things that Sony and it’s advertising agency had done. That is a lesson to us that if we do everything right and we actually do what the FTC has required in their guidelines. We hire influencers, if you’re trying to get testimonials and endorsements. We indicate that it’s a sponsored advertisement. We indicate that it’s a sponsored advertisement. We monitor what our agents are doing, if God forbid you have a rouge sub agent like you had here, or an influencer who fails to say that it was a paid sponsored ad, or fails to say they got the product for free for their review.

If you do things right it is very possible that you will not be held accountable. Here’s a situation which is the most recent FTC case against Lord and Taylor. This was just a few months ago. The Federal trade commission went after Lord and Taylor against and influencer campaign for this very pretty asymmetrical, [inaudible 00:52:03]. Paisley dress. It was an extraordinary successful campaign. Apparently Lord and Taylor have changed over three hundred and twenty-five thousand brand engagements, which is a lot of brand engagements. They filled up the entire inventory of these beautiful paisley dresses, but it wasn’t without its costs. Because Lord and Taylor had engaged influencers, had paid them from a thousand to four thousand dollars to blog about their experience wearing the dress. They sent them the dresses for free, told them to blog about them, told them to use #LordandTaylor. It was clear that there was some affiliation between the influencer and Lord and Taylor. Or I should say may not have been clear, but there was the #LordandTaylor. What Lord and Taylor sales would do is to advise their influencers that they had to indicate that this was sponsored or paid advertising.

The Federal Trade Commission took the position that it was deceptive advertising and because it hadn’t disclosed the material connection, they also had violated their guidelines. Hashtags need to be vetted as well. If you’re using #LordandTaylor, obviously you don’t have to vet it. If you’re using #LordandTaylorsweeptstakes, you don’t have to vet it. If you’re using a hashtag, like a client of mine wanted to use a hashtag. I think it was Sushi Newbie, to identify if this was the first time you’d ever eaten sushi. That’s the type of innovative hashtag where you really should make sure that nobody else is using it. Is it a trademark infringement? It very well could be. Is it just something that somebody else has used so that you using it can be confusing? It very well could be. You also have to make sure that the hashtag works. Instagram apparently … I just found this out recently. Has prohibited words. Most of those prohibited words are ones you think of. Either inappropriate or sexual connotations, but in fact I’ve been told that photography is a prohibited Instagram word.

You need to make sure your hashtag works because if you’re creating a campaign where somebody’s going to be entered by utilizing a specific hashtag, you want to make sure that it works for the marketplace. Finally you also have to think about whether that hashtag could potentially be deceptive. If your hashtag is number one hot dog and you do not have more sales than any other competitor, that’s going to be a claim that you cannot support. The hashtag in and of itself would be false and deceptive. Just because a hashtag is trending doesn’t mean you should use it. This is an example where Twitter erupted in what we call a hundred and forty characters of anger. Against Entenmann’s. They unintentionally used #notguilty to discuss their product. That was a hashtag that was used at that time to discuss the Casey Anthony murder verdict. Not exactly what Entenmann’s had in mind. Don’t forget bad taste. Maybe it’s not actionable but it can really hurt your reputation.

Here’s an example where again, you should go out there and read the news. Make sure you know what you’re doing if you’re going to use real time marketing and do tweets or anything else that you can do fast. This is the NRA that had this tweet. Unfortunately it was right after the Colorado shooting. Their believable explanation was that it was done unintentionally. The reason why there’s reason to think that it’s true is because they utilized the service that lets you schedule tweets ahead of time.

Whoever created those tweets and knows what’s going on in the future really needs to keep track of the news, because you can imagine how incredibly inappropriate this was right after a shooting. I call this the Double Oy, another one of those prescheduled tweets. This was a tweet that went out after Joan River’s death. Again if you’re going to do real time marketing you need to be really on top of what you’re doing. Some marketers just need sensitivity training. This is an example of IHOP, who used a social media campaign to try and make themselves more hip. By all accounts it was actually really succeeding. They had some really cute advertisements until they came to this one. I think some of you on the phone or on this webinar could imagine why this fell flat, if you’ll forgive the pun. More sensitivity training. Epicurious used real events and this was done intentionally of the Boston Marathon to try and sell their product. You can imagine the uproar that occurred in Boston in particular over these posts.

However, you can do it right. These are some examples of the best marketing utilizing something that’s trending, something that it’s in the news, something that’s happening now. This is Papa John advertisement that took off because it was trending off of the news that when you use an iPhone and sat on it, it bent. That was used by a number of different marketers. Here’s another example by Kit Kat. Totally cute, got a lot of press. The Super Bowl utilized the black out. Sorry. Oreos utilized the Super Bowl blackout to ambush … Which I’m going to talk about in a minute, and get a lot of press of their post, “Power out, no problem.” That was a tweet that went all over the place. It was a fabulous I thought take which they did immediately, I think during the Super Bowl blackout. Ambush marketing is when a country attempts to associate its goods with an event that already has official sponsors, the Super Bowl, the Grammys, all the red carpet events.

Advertisers pay, as you know, tons of money to be used as the official sponsors of those events Every other marketer in the world wasn’t to somehow trade off on that and get some sort of additional publicity, to associate itself in such a way where they won’t get in trouble. That’s called ambush Marketing. There is successful ambush marketing and there is unsuccessful ambush marketing. There’s not question that when you were intentionally, strategically using ambush marketing, you could in fact have a cause of action against you. This is an example of Jim Bean, again trading off on the Super Bowl blackout, using ambush marketing, using … In this instance the #Superbowl and getting away with it. Sometimes it’s a judgement call. They did it right away. They did it right as the blackout was happening. I do not think the Super Bowl would worry too much about utilizing their hashtag during a blackout, during their game. Sometimes it’s just a matter of luck. Sometimes it’s a matter of judgment. Sometimes it’s a matter of recognizing that you’re not going to go so far. Sometimes it’s a matter of recognizing that you really can get away with it.

This is an example of L’Oreal. All of the photographs of the actresses in this ad, in fact were L’Oreal models or spokes people. Using their photos and talking about the Golden Globes when they were all up for awards during the Golden Globes, is something that in my opinion would be a very low risk. It didn’t have no risk but it’s unlikely that the Golden Globes would have gone after L’Oreal for this type of usage, particularly since they had the rights from all of the various celebrities. Practical advice. What can you take away? I know it sounds too yoga like but be mindful and be smart. Hopefully you’ve learned a little bit about what you can’t do or if you’re doing it, do it carefully. A couple of takeaways. The first would be we all know marketers are taking photos, images, text all over the place on all different social media platforms and using it to somehow benefit their brand. The first thing I would recommend is if you’re going to do that, stay within a social media platform. Again you have a license presumably to all of the content that’s in Twitter, for instance.

If you’re re tweeting a Tweet presumably at least you have a license to the content. As you know though, you don’t have the right of publicity. Avoid celebrities, avoid using likeliness of people if you’re re tweeting. Try to use real life events without utilizing somebody else’s trademark if you can do it. The red carpet, the major game, something of that nature. If you’re using celebrities it’s at your own risk. You really need to be prepared for that lawsuit and you need to be prepared for that. You may be able to assume that risk but it’s not something that you should do lightly. My strong recommendation would be to avoid children. It’s just asking for trouble. Unless you have a product and your demographic is children, I would be very careful about children just like I’d be very careful about celebrities. Get permission first if you can. There are ways to do it in real time and fast. Avoid music since the music industry is so pretentious. If you happen to start a campaign and you’re using videos, get rid of the music.

Again, you need to be aware of what the risk is and do an analysis before you do something because doing it blind is not in you or your advertiser’s best interest. It’s not easy. I know that you don’t have very much time. Trying to come up with some rules of the road before you start getting into it is not a bad idea. I’m happy to set up some parameters. We talked about the fact that Machinima got in trouble with the FTC but Sony did not. Having some guidelines in place, agreements in place with your advertising agencies, making them responsible if you in fact are using an ad agency. There are things that you can do to mitigate risks. What I hope to do today is at least identify what some of those risks are first. You can litigate risks later and that’s all I have to say.

Kathy:

Wow, that’s a lot of information. I know Lisa, my head is spinning. The one point about the stock photography really is eye opening. I know we’re passed the top of the hour, but I want to make sure that we have a chance to answer questions because everybody online here has been great. We really appreciated reading all your comments about what you wanted to learn today. Dana, Geoffrey, Janice, Kent, Arthur have all been asking questions. I’m going to pull a few questions up and ask you, Lisa, those questions. If we don’t have time to get to all of your questions or if you want to follow up with myself or Lisa directly, just put Lisa’s name in parenthesis at the beginning of your question and ask the question. We’re recording all the questions and we can follow up with you afterwards. As you can see, we have our contact information here.

Let’s just get into a few questions. Arthur asked this question just as I was thinking about it so I’m going to go to this one first. Does businesses liability insurance protect for situations that you described, if a copyright or claim action were brought up against a business?

Lisa:

It should. I will say that errors and omissions Insurance can be what I have coined Swiss cheese, which is to say it has more holes in it than a lot. You shouldn’t rely on a broker and you should make sure that an attorney reads you errors and omissions Insurance policy. Because believe it or not I’ve seen insurance policies that have exclusions, that are really hard to understand. Even as an attorney they’re hard to understand but, yes. Errors and omissions Insurance would normally cover copyright, trademark, right of publicity, a lot of these issues.

Kathy:

That’s great. Since it’s right here, another question from Arthur. How would the Papa John’s example you provided be an example of an illegal tweet, since they used the #iPhone6 which would technically be owned by Apple as a trademark?

Lisa:

Ask that question again because I thought you just said Arby’s. Did I misunderstand?

Kathy:

Oh, Papa John’s.

Lisa:

Oh. Papa John’s. A very good question. In fact Apple is very litigious, but in the world of real time marketing we have learned over the years that when you’re trending off of something that’s happening and it’s news worthy, advertisers rarely would come after you. There’s no question that there’s some risk associated with using that hashtag. If I had been reviewing that and vetting it, I probably would have suggested a hashtag that was just phone. At that moment and time everybody was talking about #iPhone. They were trading off on that news worthy event. They decided to take the risk to do it and it swirled into what was happening there. That’s an example of arguably ambush marketing where they got some advantages associated with the iPhone and determined that it was worth of the risk. That’s why unfortunately it’s hard to do in a bathroom but it’s an excellent question.

Kathy:

I have another question from Diane. I’m going to try and get a few more questions in. Diane asked, “Can commenting on something but providing a link rather than a photo, ever be subject to trademark infringement?”

Lisa:

I’m trying to understand the question. You’re commenting on something and then you’re linking to the other person’s post, I think is what we’re talking about.

Kathy:

That’s how I understand it. Yeah.

Lisa:

Yeah. It kind of depends on the context because if you somehow have commented on it in such a way to imply, or even expressly state that you’re associated with that link, yes. Chances are linking to something is the safest way to go. I’m sorry I can’t be more specific but it’s a little hard again without the explicit scenario.

Kathy:

This is from Geoffrey, “Will UGC on a site protect you or do you still need specific permission?”

Lisa:

That’s a great question and one I get all the time. It is a very good idea and usually that’s not in your privacy policy. It’s usually in your terms of use or your terms of service that says, “Anything that you post you have the right to use it no matter what.” The problems with terms and service is they’re not signed quote, unquote, “By the consumer.” If you have somebody click I agree, I accept, then chances are in most courts it would be held to be an enforceable contract. Therefore, Lisa Dubrow would have given permission for you to use her photo for anything you want. First of all most advertisers do not get somebody clicking. They just say, “By using our service you agree to our terms of service.” Second of all … All this is important. You’re dealing with brand reputation and consumers who are angry. Even if they’ve signed that terms of service by clicking I agree, they may not necessarily understand what they’re agreeing to.

I do think that when you’re trying to deal with getting good will, which is the whole attempt here, it’s not a bad idea to have something that’s more clear and more conspicuous in their face. You might want to have something on your website right where somebody would upload a photo that says, “Don’t forget you’re giving us permission to use it. Click here for more details,” which can be done in augmenting your terms of use, but again you do need to have a signature. If somebody has not clicked I accept, that terms of service although a nice thing to have, is not necessarily binding.

Kathy:

Okay. Geoffrey you just asked a question. Can you re-ask that in the chat box because I don’t understand your question? I think I do so if you can rephrase it. I’m going to go to Janice’s question while you do that, Geoffrey. Janice’s question is in healthcare a company called Simplorer acts as a informal registry of hashtags. Are there any other formal or informal registries for hashtags that you know of?

Lisa:

No. I don’t know of any.

Kathy:

Okay. Well that’s unique. All righty. Okay. Geoffrey’s question is about, “What makes commercial versus editorial content? If your website carries ads, are you blog posts on that site considered commercial or editorial?”

Lisa:

That’s a really, really good question. The fact that you have published ads on your site is meaningless for making your blog commercial speech. You are merely providing a vehicle where the advertisements can sit, but if you have a sponsor who’s paying for what you’re writing and has sponsored what the blogs are saying, then you do have commercial speech. Sometimes it’s a little bit of the church and state which is just dissipating like crazy as well know, which is why native advertising is so critical. There’s a very fine line between that. If your entire sponsor is Dannon water, you’re writing articles about how great it is to drink water, and all the money for this site is given to you by Dannon, that can be an issue. Chances are if you’re just talking about the fact that you have paid advertisers advertising on your site and they are not involved in what you’re writing, your blogs would not become commercial speech.

Kathy:

In fact the FTC a few months ago wrote up guidelines on native advertising. We actually have a write up and a guide on that if anybody’s interested. I’m going to actually call it here and I want to thank everybody who’s been online. Feel free to send us more questions. I’m going to leave the chat box open but we will answer your questions offline. Lisa, thank you very much.

Lisa:

You’re welcome. I’m sorry I went over for those of you who had to leave. There was a lot in there.

Kathy:

It was. Everybody, have a great day. Thank you and hope to see you again online soon. Bye.