While some sources are sounding the death knell for user-generated content (or UGC), by most accounts it is still going strong, with both users and creators of UGC representing an increasing percentage of the overall Internet population in the next five years. Since it appears that UGC is not going anywhere anytime soon, it’s a good time for a brief refresher course on the major legal issues you are likely to encounter in structuring and running a UGC promotion. Follow these simple rules and you will be able to avoid the pitfalls that others have already encountered.
- Structure the Promotion Correctly
First and foremost, make sure you have a legal promotion. Check with legal counsel — but remember, if you have all three elements of prize, chance and consideration, you have an illegal lottery. Don’t forget that allowing viewers to vote on submissions can create chance, and therefore possibly doom an otherwise legally acceptable UGC promotion.
- Don’t Ask Consumers to Do Anything that May Cause Them or Others Harm
If you ask participants to do something dangerous as part of their submission, and they get injured while doing it, there is a very high degree of risk that you will get sued. The case law in this area has consistently held that if a sponsor induces participants to engage in activities that create an unreasonable risk of harm to the public that is foreseeable, the sponsor can be liable.
- Create a Comprehensive Set of Rules
The contest rules serve as the contract between a sponsor and the entrant, and therefore will provide you with a great degree of protection against claims from participants if the rules are drafted appropriately. In the UGC context, you are going to want to be as specific as possible in terms of what participants can and cannot submit. The rules should include prohibitions against (1) using third-party materials; (2) showing anyone else in the video (without written permission); (3) copying any existing works; and (4) showing any activity that violates the law, is obscene, vulgar or defamatory, involves drug or alcohol use, is dangerous, or that disparages competitors. The rules should also contain a provision whereby the consumer represents that anything submitted by the consumer is the consumer’s original work and does not infringe the rights of any third parties. Finally, the rules should provide the sponsor with the right to use the submitted content.
- Make Sure Your Rules Are Flexible
While your rules must be comprehensive, they should also be flexible. It’s not likely that most consumers really understand what it means to not use any third-party materials in their submissions, so most submissions will include shirts with logos, as well as posters, paintings, photographs and other intellectual property in the background. Instead of totally prohibiting such submissions, retain the flexibility of rejecting them only if it is determined that such use of third-party materials actually violates third-party rights.
- Include a DMCA Takedown Notice
The Digital Millennium Copyright Act (DMCA) provides certain protections to Internet service providers against copyright infringement arising out of their facilitation of content posting and data transfer, so long as certain statutory notices and procedures are followed. While it is not yet clear that the DMCA will provide these protections to sponsors of UGC promotions, following these procedures is the least sponsors should do to help minimize risk.
- Consider Limiting the Content the Entrants Can Use in Their Submissions
To further limit any potential liability for violating third-party rights, many sponsors are providing the third-party content that can be used in submissions, including music, photos and video clips. In these instances, the sponsor licenses the content for the promotion in advance, and requires entrants to use only that content.
- Screen Submissions Before Posting
While probably more effective in catching public relations issues as opposed to legal issues, screening will help you avoid embarrassing situations like the one Chevrolet experienced a couple of years ago in connection with its Chevy Tahoe UGC promotion. (Editor’s Note: The problem came about when a UGC contest let people create 30-second spots for the 2007 Tahoe. Unfortunately, the most widely circulated ads were merciless in their attacks, highlighting the SUV’s low gas mileage and environmental threats.)
- Follow Your Rules
If you don’t follow the rules you drafted when reviewing submissions, picking winners and awarding prizes, you are open to claims of breach of contract as well as unfair or deceptive advertising practices. If, for example, you love a submission but it doesn’t comply with the rules, it can’t be chosen as the winner. If the rules don’t permit entrants to revise their entries, you can’t ask the entrant to revise and resubmit. If you follow Item 4 above and make your rules flexible, following them should be less of an issue.
- UGC Is Advertising
The user-generated submissions are likely to be considered advertising by self-regulatory organizations, the courts and regulators, and so should be treated by you as such. This is especially true for any content that is used for more widespread marketing purposes. This means, among other things, that the submission must not be deceptive, you must have reasonable support for the claims being made, and any endorsements or testimonials about your products or services may not be induced without disclosing that fact. Indeed, in a recent case involving Dyson and Euro Pro and some “fictitious” UGC created by Dyson, the National Advertising Division of the Better Business Bureau indicated that “Dyson’s video depicted a comparative product demonstration and was therefore advertising and subject to the legal requirement that it be truthful and accurate.”
- License UGC with Caution
Who hasn’t seen a great piece of UGC that would look perfect as part of a marketing campaign? Don’t forget that you will have to license this content. The question is, however, from whom? The person who filmed the video will be the copyright owner, so it is important to deal with this person first, which sounds easier than it is. The person who posted the video may or may not be the same person who filmed it, so be sure to perform adequate due diligence and find out who controls the video. Once you license the video, you will have to get releases from the people who appear in it, and if there is any music, license that as well.
Joseph Lewczak is a partner in the advertising, marketing and promotions department of New York-based Davis & Gilbert LLP.
For more articles on promotional marketing go to www.promomagazine.com
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