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The Briefing by Weintraub Tobin
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In The Briefing by Weintraub Tobin, intellectual property attorney Scott Hervey and his guests discuss current IP issues related to trademark, copyright, and entertainment, as well as IP litigation and intellectual property in the news.
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The Briefing: Westlaw v. Ross AI – Is This The End of AI Training or The Future of AI Training
Mar 1, 202500:19:45Tap to summarizeMajor AI copyright ruling – The Delaware District Court’s decision in Thomson Reuters v. Ross AI could have huge implications for AI training and copyright law. On this episode of The Briefing, Weintraub attorneys Scott Hervey and Andy Tan break down the case, its impact on the AI industry, and what it means for content creators. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: This February, the Delaware District Court, in the case of Thompson Reuters versus Ross AI, issued a decision that will have, in all likelihood, profound ramifications on all pending AI copyright infringement cases. I’m Scott Herbie, a partner at the law firm of Weintraub Tobin, and I’m joined today by my colleague, Andy Tan. We’re going to walk through the court’s decision in Thompson Reuters versus Ross AI and discuss how this case will impact the other AI training, copyright infringement cases currently pending. We’ll also talk about what this case could mean, both for the AI industry and the creators of content on this installment of “The Briefing.” Andy, welcome to “The Briefing.” This is your first time on “The Briefing”, so thanks for doing this. Andy: Thanks, Scott. It’s an honor to be part of it. I’ve been a long-time fan and watcher, so it’s great to be on now. Scott Well, we’re glad to have you. This case is right up your alley. You do a lot of deals in the AI space, so I thought this one would be appropriate for you to do with me. Andy Yeah, it’s definitely coming up, and AI is the hot topic in the legal world for the foreseeable future, I think. Scott Yeah, that’s for sure. Well, let’s start. Why don’t we start with the facts of the case because this case, it’s got some interesting twist and turns. Andy, can you take us through the basic facts of the case? Andy Yeah, I would be happy to. I’ll run through the basic facts of the case. If you want a more in-depth discussion, you should check out the November 9, 2023, episode of The Briefing, where Scott and our colleague Tara go over it in detail. I’ll just go over the facts Again. But so, who are the players? Reuters owns West Law. It’s one of the primary legal research tools. Ross was a legal research AI startup. I say was because Ross AI closed down as an operating company in 2020. They said it was due to the Thompson Reuters lawsuit, but its insurance coverage probably allowed it to continue to defend the Thompson Reuters lawsuit, so we’re not sure that’s the reason. Ross hired a subcontractor to create memos memos with legal questions and answers. Now, these questions were meant to be those that a lawyer would ask, and the answers were direct quotations from legal opinions. They used these memos to train Ross’s AI legal research tool so that when a user asks a legal question, Ross’s tool responds with relevant judicial opinions, which Reuters is saying is similar to Westlaw’s headnotes. Reuters, the provider of the Westlaw Service, contended that these questions were essentially Westlaw case notes, and the court found, as a matter of law, that Ross copied portions of the Westlaw headnotes. Andy Ross challenged Reuters’ copyright in the headnotes and raised a fair use defense. Scott That’s right. This case is particularly interesting because it features something rare in federal courts: a judge reversing his own prior summary judgment ruling. Let’s start with the procedural history because that It’s unique. This case, as you said, began in 2020 when Thompson Reuters sued Ross in Delaware district Court. In 2023, Judge Bibas issued a summary judgment opinion that largely denied Thompson Reuters’ motions on copyright infringement and fair use. But then something unusual happened. As the case was heading towards trial that was scheduled for August 2024, Judge Bibas took a closer look at the materials and had what you might say is a judicial epiphany. The judge continued the trial date and invited the parties to renew their summary judgment briefings. Andy That’s pretty remarkable. From what we’ve seen, it’s rare for a judge to admit that they might have gotten something wrong. Scott That’s right. But if a judge is going to make a mistake or have second thoughts about something, there’s no better topic than the evolving world of AI. The judge actually said, A smart man knows when he’s right, and a wise man knows when he’s wrong. Wisdom does not always find me, so I try to embrace it when it does, even if it comes late as it did here. That’s pretty self-deprecating and funny for this judge. The judge does a complete reversal, and let’s dig into the legal analysis. First, there was the question of copyright validity. As part of the court’s original decision, the court initially said that it was going to leave this to the jury to determine whether Westlaw’s headnotes and its key number system had enough originality to be protected by copyright. Initially, Judge Bibas thought that originality depended on how much the headnotes overlap with the underlying court opinions. Now, this analysis was relevant because in doing an infringement analysis, you need to separate the non-protectable elements from what is protectable, and then you analyze the protectable elements and their similarities. In the recent opinion, the judge said he didn’t think this was the right approach. Scott The key insight was that even if a head note quotes from an opinion verbatim, the very act of selecting which portion to excerpt involves creative judgment. The judge drew from the Seminal Supreme Court case of Feist. That’s the telephone bookcase that we all learn about in law school, which held that factual compilations are original works of authorship, protectable under copyright if the compiled makes choices as to selection and arrangement using just a minimal degree of creativity. Based on that, the court found that the notes and key number system were original enough to be protected by copyright. Andy That’s right. As for the infringement aspect, the court handled that quickly. They noted that while they slogged through all the headnotes and determined that out of 2,830 headnotes, the court granted summary judgment findings of actual copying of 2,243 of the headnotes. They made this determination only where copying was so obvious that they said no reasonable jury could find otherwise. Scott That’s right. The court found infringement even after acknowledging that West law had a higher burden of similarities to meet due to the fact that the headnotes contained less protectable expression. Andy Let’s talk about fair use because this is the part that could have huge implications on other AI infringement cases. Let’s break down the four fair use factors. For factor one, the purpose and character of use, the court found Ross’s use was commercial and not transformative, even though the headnotes didn’t appear in the final product. Scott Right. Let’s dig into the court’s finding that Ross’s use was not transformative because, essentially, this was the basis on which the court found fair use in 2023 based on transformative intermediate copying. Ross argued that its copying of the headnotes is part of a building of a search engine that avoids human intermediated materials. Ross said that its AI studied the headnotes and opinion quotes only to find language patterns that would allow Ross to develop a search tool that would produce highly relevant quotations from judicial opinions in response to natural language questions and not to replicate Westlaw’s expression. Andy The court’s 2023 finding relied heavily on cases like Google v. Oracle and Sony v. Connectix. In those cases, the court found that copying computer code as an intermediate step was fair use. But now, Judge Bibas found those cases inapplicable for two reasons. Scott Right. That’s right, Andy. First, the judge said that those cases dealt specifically with computer code, which courts tend to treat differently from other copyrighted works because of its functional nature. Second, in those cases, the copying was necessary to innovate and achieve interoperability. You had to copy the code to make the programs work together. The court found that this wasn’t true here. The court said that Ross didn’t need to copy Westlaw’s headnotes to create a legal research tool. Ross could have created their own summaries of court opinions. The court said that Ross’s use was not transformative because it didnR...
Transcribe →Federal District Court Adopts Problematic “Vibe Copyright” Protection in Influencer Fight
Feb 21, 202500:13:50Tap to summarizeIn the case of Sydney Nicole vs. Alyssa Sheil, a federal district judge ruled that certain vibes and aesthetics can be protected under copyright law. Weintraub attorneys Scott Hervey and Tara Sattler break down this decision and what it means for content creators and brands in the digital age on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: In December of last year, we talked about the report and recommendation of a magistrate judge that would hold that a vibe or a look could be protected under copyright law. That report was adopted by the district Court for the Western district of Texas. So, it seems, at least in the Western district of Texas, that copyright law extends to protection of ideas, concepts, or general styles. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, I’m joined today by my partner, Tara Sattler. Given the adoption of the Magistrate Judges recommendations, we are going to discuss the potential implications of this case, Sydney Nicole versus Alyssa Sheil, on the creator marketing industry on this installment of the briefing. Tara, welcome back to the briefing. Tara: Hi there, Scott. Always great to be here. Scott: Good to have you again, Tara. I think this is going to be a real interesting discussion here. As a quick recap, this case involved a dispute between Sydney Nicole, a content creator, and Alyssa Sheil, another creator, accused of copying Nicole’s online content. Sydney Nicole alleged that Sheil’s work closely mimicked her original content, including the themes, style, and presentation of her videos. However, she’ll argue that she was merely drawing on a general model and idea and concept that copyright law has traditionally deemed unprotectible. Namely, this Clean Girl look, a very popular look among content creators and the creator marketing community. Adopters of this look include the likes of Hailey Bieber, Bella Hadid, Selena Gomez and Kim Kardashian, to name just a few. Tara: The federal magistrate judge issued a report and recommendation, which was later adopted by the district court, siding with Nicole. The ruling found that Sheil’s content bore sufficient similarity to Nicole’s protected expression rather than just her general ideas, effectively expanding the scope of what might be considered copyright infringement in the digital content space. Scott: So we’re not going to analyze the decision itself. For that, I recommend our listeners check out our previous episode on this case back in December. We’re going to put a link in the episode description to make it easy for you to find. What I want to talk about today are the critical issues for content creators and brands and the broader creator economy because of this case. So The first thing I want to talk about is that the finding of this case potentially blurs the line between protecting expression and protecting ideas. Tara: I definitely think you’re right, Scott. One of the foundational principles of copyright law is that it protects the specific expression of an idea, but not the idea itself. However, this ruling raises concerns that court may be moving towards an approach that grants de facto protection to certain creative concepts, especially within digital content creation. Scott: That’s right. The similarities in this case were largely thematic or conceptual. I think there’s a chance that this decision risks chilling the very creative development that copyright law has meant to foster. Creators often build upon common trends and esthetics and industry norms, and if those elements can be locked down as protected expression, it could deter new entrance and limit creative evolution. Tara: That’s right. This case could also open the door to secondary liability for brands that work with influencers. If an influencer unknow post content that closely resembles another creator’s work, there is a distinct possibility that brands that sponsor or collaborate with those creators could be held secondarily liable. Scott: Yeah, I can certainly see that under a theory of vicarious liability. So vicarious liability is generally found where the defendant has the right and ability to control the infringing activity, and the defendant derives a direct financial benefit from the infringement. So for example, where a brand hires or contracts with an influencer to create content, and that brand has the ability to review or direct that content, the brand might be found vicariously liable if the influencer infringes somebody else’s vibe and the brand benefits from it, which they will be deemed to because this is an advertisement. Tara: Courts have historically been cautious about extending liability in such cases. But as influencer marketing becomes a dominant advertising strategy, we may see an increased focus on due diligence and compliance by brands to avoid potential legal entanglements. Scott: Beyond the legal risk, this increased exposure to liability could also slow the growth of brand spend within the creator economy. If brands fear legal consequences, they may reduce investment in influencer partnerships or ship their budgets to lower risk advertising channels. Additionally, companies may impose stricter content review processes and demand more extensive indemnification clauses and contracts, which could make influencer deals more complex more time-intensive, and less attractive, particularly for smaller creators. In addition to potentially stifling brand spend, this decision could potentially stifle competition in the creator economy. Tara: I agree. The creator economy really strives on iteration, remixing, and reinterpreting of popular trends. This decision could make competitors wary of engaging in common industry practices out of fear that their work might be deemed infringing. If courts begin interpreting copyright law in a way that grants broader protection to influencer-driven content, it could discourage new creators from entering the market and inadvertently strengthen the position of already established influencers. Scott: Less competition within the creator economy could lead to a less diverse and not so innovative content landscape. New and smaller creators may struggle to gain traction if they fear illegal consequences for inadvertently producing a similar vibey content to an existing influencer. This could concentrate marketing power among top influencers who, having more resources, are better positioned to assert and enforce their copyright claims, even if those claims are nebulous. Tara: However, there could be some potential benefits for certain groups. Established influencers and content creators might benefit from increased legal protections that shield their work from being copied in the future. Scott: True, but this would come at a cost which creates a huge barrier to entry and also would artificially inflate the cost to advertisers. If there are only a handful of creators that would be able to emulate a specific look or vibe, naturally, the cost to work with those creators would increase substantially. Ultimately, while the ruling might provide some advantage for market leaders, it risks stifling creativity and competition, making it harder for emerging creators to build their presence in the industry and making it tougher for emerging brands to use creator marketing to expand their market share. I also think that this case could result in an increase in copyright litigation among influencers. With the rise of social media content creation, this case might embolden more influencers to file copyright claims against their competitors. Could this Can we create an environment where disputes over content style and approach become more litigious rather than fostering creative competition? I mean, we’ve already seen it in this case. Tara: Yeah, we have, and I agree. It or not, we all know that litigation is a business strategy, and if it makes economic sense to use litigation to whittle down the competitive landscape, more litigation is probably going to come. Scott: I agree. A...
Transcribe →Bad Spaniels: Infringement? No. Dilution? Yes
Feb 14, 202500:15:49Tap to summarizeOn this episode of The Briefing, Scott Hervey and Tara Sattler dive into the landmark Jack Daniels v. VIP Products case that changed trademark law. They break down the Supreme Court’s ruling on trademark infringement vs. dilution and explore how a dog toy parody nearly tarnished Jack Daniels’ brand. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: VIP products versus Jack Daniels’ properties brought a landmark Supreme Court case that forever changed the application of the Rogers Test. However, cross-motions for summary judgment at the District Court following the Supreme Court have provided some degree of closure and finality on the trademark and dilution claims raised by Jack Daniels. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and today I’m joined by my partner, Tara Sattler. We’re going to talk about a dog toy, a bottle of whiskey, and the Sometimes-murky waters of Trademark Law on this installment of The Briefing. Tara, welcome back to the briefing. It’s good to have you back. Tara: Thanks, as always, Scott. Scott: We’ve talked about this Jack Daniels case as it has affected other cases I think, boy, almost ad nauseam. But there has finally been a resolution itself of the Jack Daniels case. Let me just give a little brief history of the background, and then you can recap the Supreme Court’s decision. This legal battle began all the way back in 2014, so over 10 years ago, when VIP Products, a company that makes dog toys, filed a declaratory relief lawsuit against Jack Daniels, seeking a declaration that their Bad Spaniels dog toy did not infringe on Jack Daniels’ trademarks. The Bad Spaniels toy was designed to mimic a bottle of Jack Daniels’ Black Label Whisky. Jack Daniels counterclaimed, alleging both trademark infringement and trademark dilution. The case has gone through multiple appeals, including a trip to the Supreme Court. Court. The Supreme Court ultimately vacated the Ninth Circuit’s decision and remanded that case back to the District Court. From there, let’s quickly recap the Supreme Court decision. On June 8, 2023, the Supreme Court decided this case. At the district Court and on appeal to the Ninth Circuit, the issue was framed as whether the dog toy was an expressive work since trademark claims involving expressive works were analyzed under the Rogers test. Tara: Right. But on appeal, the Supreme Court said that the issue was not whether the dog toy was an expressive work, but rather the nature of the use of the Jack Daniels mark. Scott: Right. The Supreme Court found that the IP’s use of the marks, while humorous, was for the purpose of serving as a source identifier, a trademark use, in other words. The Supreme Court held that the Rogers test does not apply to instances where the mark is used as a source identifier, regardless of whether it’s also used to perform some expressive function. Tara: And then from there, the case was eventually remanded to the district Court to determine Jack Daniels’ Lanham Act claims for dilution and infringement. Scott: Before we get into the dilution part, let’s briefly touch on trademark infringement. To win on this claim, Jack Daniels needed to show that its trademarks were distinctive and nonfunctional and that there was a likelihood of consumer confusion. The court had previously ruled that Jack Daniels’ trademarks were distinctive and nonfunctional. The key issue was whether VIP’s Bad Spaniels toy would cause a likelihood of confusion about the source of the product. The Or ultimately found that while Bad Spaniels as a toy did evoke the Jack Daniels brand, it was a successful parody. Tara: That’s right. A successful parody of a famous mark, one that conjures up the original yet creates contrasts from the original so that the message of ridicule or pointed humor becomes clear, is not often likely to create confusion. Scott: All right. The court waved several factors and determined that due to the parotic nature of the toy, consumers were unlikely to be confused about its source. Therefore, the court found that VIP was not liable for trademark infringement. Tara: Right. That’s score one for the dog toy. But now let’s get into the, I think, more interesting part of the case, the trademark dilution claim. This is where the court found VIP liable. Trademark dilution is different from infringement. Trademark dilution is about protecting the distinctiveness and selling power of a famous mark, even if there’s no confusion about the source of the infringing product. The Trademark Dilution Revision Act, or TD as it’s called by trademark lawyers, defines dilution as the, quote, whittling away of the value of a trademark when it’s used to identify different products. It prohibits the use of a mark that is likely to cause dilution, either by blurring or by tarnishment. In this case, Jack Daniels argued that the Bad Spaniels toy diluted their trademark by tarnishment. Scott: To prove dilution by tarnishment, Jack Daniels had to prove three things. First, Fame, that its trademarks were famous before VIP’s use of the Bad Spaniels toy began. Second, Similarity there was a similarity between the Bad Spaniels toy and Jack Daniels trademarks. And third, reputational harm. That the Bad Spaniels toy was likely to harm the reputation of the Jack Daniels trademarks. Tara: Let’s look at each of these in detail. I’ll start with Fame. I think that was an easy one for the court. The court found that Jack Daniels trademarks were famous, and they are famous, noting the brand’s century-long history, excessive advertising, and massive sales. Vip argued that the old number seven trademark, specifically, was not famous enough, but the court rejected this, stating that it was the overall use of Jack Daniels’ marks in a tarnishing way that mattered. The court emphasized that it was VIP’s use of Jack Daniels’ marks on the dog toy and not the bad spaniel’s name in isolation that caused the tarnishment. Scott: Okay, so turning to the second factor, similarity. The court found that VIP intentionally designed the Bad Spaniels toy to mimic Jack Daniels’ trademarks and trade dress, including the shape of the bottle, color scheme, and font. The IP replaced Jack Daniels with Bad Spaniels Old Number Seven with Old Number Two, and also Tennessee Whisky with Tennessee Carpet, while retaining other designer elements. The court determined that this was enough to show a similarity. Tara: As to the third element, reputational harm, the court noted that such harm, the harm to the reputation of the famous Mark, mark arising from the similarity between the famous mark and the junior mark. The court noted that this harm generally arises when the plaintiff’s trademark is linked to products of shoddy quality or where it’s portrayed in an unwholesome or unsavory context, likely to evoke unflattering thoughts about the owner’s products. Jack Daniels argued that the Bad Spaniels toy tarnished their trademark by associating the brand with dog poop. Vips’ toys included phrases like 43% poop by volume and 100% smelly and replaced Old Number 7 with old number two on your Tennessee carpet. To support their argument, I mean, that all just seems funny to me, but to support their argument, Jack Daniels brought in an expert who testified about the negative associations that the Bad Spaniel’s toy was likely to create with Jack Daniel’s whiskey, particularly because the product is intended for human consumption. The court gave prevailing weight to the expert’s testimony, concluding that the toy was likely to tarnish Jack Daniel’s reputation by creating a negative association with dog poop, essentially. Scott: From there, VIP argued that there was no actual evidence of reputational harm and that their dog toy was not as offensive as other products that have been found to cause tarnishment. But the court disagreed. Importantly, the court emphasized that the TDRA only requires a likelihood of dilution, not actual harm. The court also dismissed VIP’s argument that the old number seven mark itself was not famous enough, stating that the tarnishment arose from the use of the overall Jack Daniels marks on a product associated with dog poop. Tara: So VIP also raised ...
Transcribe →Copyright Troll or Rightful Enforcer? The Fifth Circuit’s Curious Ruling In Sports Doc Copyright Litigation
Feb 7, 202500:21:48Tap to summarizeA motivational passage from Keith Bell’s book Winning Isn’t Normal sparks a legal battle after Ole Miss coach Lane Kiffin shares it on Twitter. Scott Hervey and Tara Sattler dive into the lawsuit, exploring how the Fifth Circuit’s ruling raises important questions about fair use, copyright enforcement, and Bell’s “serial litigant” status. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: In 2021, we reported on the copyright lawsuit filed by inspirational book author, Keith Bell, against the defensive back coach for the Miami Dolphins, Jerold Alexander. This was based on the coach’s inclusion of a passage from Bell’s 1982 book, Winning Isn’t Normal, in a social media post, and a federal court’s refusal to dismiss Bell’s lawsuit based on Alexander’s arguments, including fair use. In that case, the Florida federal court judge said that consideration of the fair use defense on a motion to dismiss was not appropriate unless it’s clear, based on the complaint itself, that fair use is applicable. The party The purpose of that case later settled. However, Bell had a much different result in a lawsuit brought against the University of Mississippi football coach, Lane Kiffin. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin and I’m joined today by my partner, Tara Sattler. We are going to take a look at this particular case and a related case in the Fifth Circuit to try to understand why this federal judge and the Fifth Circuit came to such a different conclusion than the judge in Florida based on essentially similar facts on this installment of the briefing. Tara, welcome back to the briefing. I think this is going to be a real interesting discussion. Tara: It definitely is, and it’s really timely with the Super Bowl coming up here. Scott: It is timely with Super Bowl coming up, but it’s really appropriate that you and I are talking about that Giving all the coverage you and I have done on the Warhol case and the new analysis of fair use. Absolutely. Yeah. So let’s get into this case. Like Bell’s case against Alexander, Bell’s lawsuit against Lane Kiffin, the head football coach at the University of Mississippi, revolves around a passage from Bell’s book, Winning Isn’t Normal. And that passage is known as the win passage. This passage provides motivational advice, and Bell has separately copyrighted that passage. So Kiffin tweeted the passage, the same passage that Alexander had tweeted. However, here, Kiffin included no other commentary or elaborate on the passage while Alexander had. Tara: As we know from our previous coverage, this isn’t Bell’s first lawsuit over this passage. Bell has filed dozens of copyright lawsuits over similar social media uses of the wind passage. This became an issue in Bell’s lawsuit against the Eagle Mountain Saginaw Independent School district for a similar use. In that case, the Fifth Circuit declared Bell a serial litigant who makes exorbitant demands for damages in hopes of extracting disproportionate settlement. Scott: I want to talk about the Court’s criticism of Bell’s litigation strategies. But before we have that discussion, let’s talk about the Court’s treatment of Kiffin’s fair use argument. The Kiffin Court cited the Fifth Circuit’s decision in Bell versus Eagle Mountain, Saginaw, Independent School district, which dismissed a nearly, on a motion to dismiss, a 12: 06 So not a summary judgment motion, but a motion to dismiss just based on a complaint itself and the defense is advanced by the defendant. They dismissed a nearly identical claim on fair use grounds. So Let’s remember that this case is a post-Warhol Fair use case. Tara: Right. The Court’s analysis closely followed the framework established in Eagle Mountain. It applied the four statutory fair use factors codified in the Copyright Act. One, the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. Two, the nature of the copyrighted work. Three, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and four, the effect of the use on the potential market or value of the copyrighted in the war. Scott: So interestingly, both the Fifth Circuit in the Eagle Mountain case and this court, the Kiffin Court, make no mention of the Supreme Court’s analysis in Warhol, which requires an analysis of whether the purpose of the secondary use is different enough to justify copying. Let’s look at what the court did say in looking at those four fair use factors. Tara: As mentioned, the court’s analysis closely followed the framework established in Eagle Mountain. First, regarding the purpose and character of the use, the court found Kiffin’s use to be non-commercial and intended to motivate and inspire, a purpose often protected under fair use. Next, to the nature of the copyrighted work. The wind passage was deemed creative, favoring Bell slightly, though the court noted this is generally the least significant factor. Third, the amount and substantiality of the portion used. While Kiffin tweeted the entire win passage, the court here determined this factor was neutral because the passage was already widely accessible online. Finally, with respect to the fourth factor, effect on the market, this was the decisive factor. The court here found no evidence that Kiffin’s tweet harmed the market for Bell’s book or related merchandise. Bell’s claims of potential licensing revenue were speculative at best. Scott: I have issues with the court’s analysis, and we’re going to get into that in a bit. I think it’s also important to point out, and it’s clear from the Fifth Circuit’s opinion that Bell’s litigation history just highly influenced the court’s decision. The court was critical of Bell’s history of targeting what the court referred to as minor and often harmless uses of the win passage, despite the fact that the uses were not authorized by win. Sorry, not authorized by Bell, calling Bell a serial litigant and comparing his behavior to that of a copyright troll. This bad faith history, as the court calls it, undercut Bell’s argument especially regarding the fair use analysis. Tara: That’s right. And Scott, you mentioned the issues that you have. So I have some, too. Let’s talk about them. Scott: Yeah. So let’s start with the court’s analysis of the first factor. The court said that anyone reading Kiffin’s tweet would assume that the post was Kiffin simply saying in effect, quote, Somebody said this, and I thought it was worth sharing. The The Court said that this is the contribution to the exchange of ideas which the copyright law should be very hesitant to find unlawful, particularly when the quote in question is of such a harmless and non-commercial nature as the wind passage. We’ve covered a number of copyright cases that stem from the post of a photo that a person didn’t take. I mean, think of the numerous celebrity photo cases that we’ve covered. I don’t ever recall any other court applying a similar analysis. Could you imagine the argument? Some photographer took this photo of me and I thought it was worth sharing. I just don’t agree with the court’s analysis here. Tara: That’s true. I agree with We have never seen this, and I can’t imagine that this type of an argument would really go over very well in any other case or any other type of situation. Scott: The court noted that Kiffin’s use was intended for motivational and inspirational purposes. Kiffin shared this post for the same reason that all the other coaches and sports organizations have shared this passage, motivation and inspiration. Now, Bell is an internationally recognized expert in sports psychology and performance enhancement. The purpose behind his book and its content is to motivate and inspire. Now, while...
Transcribe →Creator Contract Liability When Your Platform Disappears: The TikTok Ban
Jan 31, 202500:20:53Tap to summarizeAs TikTok’s future in the US hangs in the balance, influencers and brands are left wondering how a potential ban could impact their posting contracts. In this episode of The Briefing, Scott Hervey and Jamie Lincenberg dive into the potential legal challenges and share insights on how brands can stay ahead of the curve in this ever-changing landscape. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: On January 19, 2025, TikTok went dark, forced to cease operations in the US as a result of a federal law that bans the app in the US unless TikTok divest itself from its Chinese parent company. Now, as we record this podcast today on the 21st, TikTok is back up. It has a 75-day stay granted by current President Trump. While TikTok sorts out whether it’s going to sell itself or some other deal structure that will allow it to continue to operate in the US. For influencers that use TikTok as a content platform, many are concerned, very concerned that this federal law ban will have a serious impact on their livelihood. But here’s something that I haven’t heard much chatter about. What happens to those brand integration contracts where an influencer is required to post content to TikTok after the ban date? Does this Does this mean that an influencer is in breach? Can the influencer be liable to a brand for failure to perform, even though it’s really out of the control of the influencer? I’m Scott Hervia, a partner with the law firm of Weintraub, Tobin, and I’m joined today by my colleague, Jamie Lindsberg, to talk about whether influencers face potential liability due to the TikTok ban on this installment of the briefing. Jamie, welcome back to The Briefing. Jamie: Thanks for having me again, Scott. Scott: This is an interesting topic, and I got to say, from the time that I put our outline together till today when we’re recording this podcast, it really has been about three days, and so much has changed in those three days. But as we’re recording this, we’re recording this on the 21st, yesterday, the 20th, President Trump granted TikTok a 75-day stay for the band to take effect, pending some deal to work out the issues related to this federal law that would ban TikTok’s operations and also would ban any company from hosting or allowing TikTok app to be made available to users in the United States. Let’s first talk about the TikTok ban or sale law. This law was passed in April 2024 as part of a broader For an aid package. It gives ByteDance, TikTok’s Chinese parent company, approximately 9 to 12 months to sell TikTok’s US operations to an American buyer. If ByteDance fails to divest TikTok within the time frame, which we know happened, the app would be banned from US app stores and web hosting services. In between April 2024 and January 19, 2025, which is the band date, there were lawsuits filed by TikTok, lawsuits filed by the FTC and the DOJ, appeals to federal courts, including the Supreme Court, which upheld the ban. As I said, while I was working on our outline for the episode, the Wall Street Journal reported that President-elect Trump said that he would issue in order to reopen TikTok on Monday, January 20th, 2025. As we know, on Monday, President Trump gave TikTok a 75-day stay of the ban. Jamie: Yeah, that’s right, Scott. A lot’s happened in the last couple of days around this, but we have been anticipating the effects of this for quite some time now. The history of TikTok’s bumpy relationship with the US prior to April of 2024 is important to understand. In 2020, the Trump administration had expressed some concerns about TikTok’s Chinese ownership and privacy and security issues, and the administration had threatened to force a sale or a ban through executive orders. You may recall that Trump had even pushed for an acquisition Microsoft. But after that fell through, Oracle entered into a commercial agreement with TikTok for the purpose of protecting US data. Scott: Right. But even after that, and through 2023, various states passed laws banning the use of TikTok on government devices. And in the end, 39 states have banned TikTok on government devices. Also, important to note, the federal government bans TikTok on devices owned by the federal government, and certain universities have banned the use of TikTok on campus WiFi and university-owned computers. And in 2023, there was increased bipartisan pressure and congressional hearings about TikTok’s data practices and potential national security concerns. Jamie: The timeline that you’ve just mentioned creates legal implications for influencer contracts. We can essentially divide those contracts into three distinct time periods, each with its own legal implications. First contract signed before 2020, when TikTok faced its first serious regulatory scrutiny under the Trump administration. Second, contract signed between 2020 and early 2024 during that period of increasing regulatory pressure. Third, following enactment of the law in April 2024. Scott: Let’s explain why this timeline is important in looking at potential influence or liability under a brand agreement that requires posting of integrations on TikTok after the ban. We’re looking at a potential defense to this liability. The first is under a legal doctrine called the doctrine of impossibility, and the other is under the application of any force majeure provision that might be in the agreement. Let’s talk about the doctrine of impossibility first. Under the doctrine of impossibility, a party may be excused from performing a contract if a supervening event prevents compliance with the agreement. In California, the doctrine requires the party a hurting the defense of impossibility to establish the following: one, that the supervening event, in this case, the TikTok ban, makes performance impossible or impractical. Two, the non-occurrence of the event, meaning that the US government’s shutdown of TikTok, was a basic assumption upon which the contract was based. Essentially, was the supervening event foreseeable at the time the contract was entered into. Three, the occurrence of the supervening event resulted without the fault of the party seeking to be excused. Four, the party seeking to be excused did not assume the risk of the occurrence of that event. And five, the parties have not agreed, either expressly or impliedly, to perform in spite of the impossibility or impractability that would otherwise justify on performance. Jamie: It sounds like the doctrine of impossibility could provide a defense to a breach claim depending on when the contract was actually entered into. If there are agreements where performance is still required that were entered into prior to 2020, when TikTok first faced US scrutiny, then the impossibility defense would be strongest as a full platform ban wasn’t widely contemplated at that point. Scott: I agree with you. For any agreement signed after 2020, but before April 2024, I think it’s a mixed bag as some level of platform risk was foreseeable. However, I can also see an argument that TikTok’s deal with Oracle mitigated the potential of any platform ban. Prior to the enactment of the ban or sale law in April 2024, I can see a real strong argument that That impossibility, the doctrine of impossibility would provide a good defense. Jamie: Right. And I think in practice, the concern really has only come up and been a point of conversation over the last maybe 6 to 12 months. So the agreement The arguments that may face bigger problems applying the impossibility defense would be those entered into after April of 2024. At that point, the risk of a potential platform ban was known, and any influencer who entered into an agreement requiring posting on TikTok after the ban date likely did take on the burden of performing despite that risk of impossibility. Scott: Yeah, I can see that. But there is an argument to the contrary because the legislation did provide the possibility of a sale and not just a ban. So as such, courts might view this differently than a straightforward impossibility case. So the question then becomes, Is it the ban that’s foreseeable or the possibility of continued operation under new ownership? Which one is more foreseeable than the other? Or how foreseeable would be the ban over continued operation under new ownership? Jamie:<b...
Transcribe →2025 IP Resolutions Start With a Review of IP Assets
Jan 24, 202500:16:10Tap to summarizeKick off 2025 by reviewing your company’s IP assets! Whether you’re new to IP protection or a seasoned pro, it’s crucial to keep track of your valuable intellectual property. Scott Hervey & Tara Sattler break down key steps in safeguarding your trademarks, copyrights, and patents on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: As 2025 kicks off, it’s time for companies to review and take stock of their intellectual property assets. This applies to every company, whether you are new to IP protection or an old pro. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and I’m joined today by my partner, Tara Sattler. We’re going to break down how to review and safeguard your company’s most valuable intellectual property assets on this installment of The Briefing. Tara, welcome back to the briefing. Happy New Year to you. Happy New Year to you, too, Scott. Great to be here again. Tara: Great to have you. Let’s jump right into this. As you know, intellectual property is a company asset, just like inventory. No CEO or CFO would think of running a company where they didn’t know the extent of company inventory. Likewise, it makes no sense for a company to not have a firm understanding of all of its potential intellectual property assets. Even companies that regularly take steps to protect intellectual property through, for example, registering trademarks or registering copyrights, should yearly review their IP assets, and this can prove to be very beneficial. Scott: Understanding the extent of a company’s IP holdings usually starts with what’s known to the company, such as all registered copyrights, trademarks, or patents, both domestic and foreign. After compiling a list of those IP assets, the next step would be to review what the company is using and compare that to the list of registered or pending marks for registration. Let’s discuss with trademarks since every business has at least one trademark. Outside of any registered trademarks, check your marketing and promotional materials, website, mobile app, and social media. If these materials show use of trademarks, logos, or slogans that are not already the subject of a trademark registration or application, then these marks should be cleared for use to prevent unintended liabilities, and they should be considered for possible registration. Tara: Don’t overlook company social media accounts, as mentioned, domain names and toll-free numbers, which may also serve as potential trademarks. Does anybody use toll-free numbers anymore? I don’t know. They’re not as popular as they used to be. Be sure to confirm that all domain names and social media accounts are registered to the company. You’d be surprised at how many times a domain name or a social media account is registered to to an individual company employee or to the marketing company that created, let’s say, the company website or is doing social media engagement and not the company itself. Also, if the company has changed the graphic user interface to any of its technology products or has changed product packaging, point of sale displays, or product designs, these may also be protectable trade dress. Scott: That’s right. Next up would be assets that are subject to copyright laws. In reviewing for copyrightable content, check the company’s website, marketing materials, manuals, YouTube videos, podcasts, posted content on Instagram, TikTok, social media, and other social media, photos, software, blog posts, articles, white paper, and all things like that. While the cost of registering every piece of content may not be economical, companies should at least maintain inventory of all copyrightable works and then make a decision from there. Tara: Right, I agree. Let’s talk about patents. On the patent front, a company should always be aware of any new inventions under development, and it’s good practice to investigate the status of any inventions developed by company employees during the past year. Such inventions may be protectable under federal patent laws. Now, an inventor must secure a patent application within a very short period of in order to prevent the work from falling into the public domain. And that’s even shorter internationally. Companies that routinely produce new inventions should put to place a process which enables inventors to disclose a potential invention to a responsible executive well prior to the invention being disclosed to the general public in order to protect international patent rights and watch the clock for US patent rights. Scott: Trade secrets are a category of proprietary assets that companies may not truly understand or appreciate. This is probably because something can either be a trade secret or not a trade secret, depending on the manner in which the company treats it. Trade secrets are items not generally known by the public, but have economical value and are the subject of reasonable precautions to maintain their secrecy. Tara: Trade secrets can lose their protected status if they’re no longer kept secret. Specifically, if a company’s trade secret or a bit of information or items like a customer list or vendor list that a company considers to be proprietary and trade secret, if that becomes generally known to the public, then it loses its trade secret status. Also, if the company does not take steps to keep that information secret, it can also lose its protected status. Now, this includes physical security measures, also contractual security measures, and internal policies regarding data sharing. Scott: It’s worth noting that unlike patents or copyrights, trade secrets have no set duration of protectability. However, this protection depends entirely on maintaining the secrecy like you were talking about. Scott, Scott. If the information becomes public or the owner fails to take reasonable precautions to keep it secret, the trade secret then loses its protection. Tara: Trade secrets, as you said, they have no saturation of protectability. Some companies choose instead of filing a patent, for example, the the formula for Coca-Cola. My understanding of that is that it is a trade secret. It’s It’s not subject to a patent. It could be, but it’s not subject to a patent because patents have a duration. After that, the invention itself becomes available to the public. But as long as a company keeps something secret, like the formula to make Coca-Cola, that can live on forever. Let’s talk about items that can be protected by state trade secret laws. It includes source code and related documentation, customer lists, employee knowledge, training and experience, proprietary technologies, definitions and formulas, specifically developed customer information, sales practices, negative information, such as negative results from research and development projects, and customer and consumer surveys. Each of the above could constitute proprietary trade secrets depending on whether its owner took reasonable steps to maintain its trade secret status. Scott: A special note about customer data. In addition to regularly reviewing IP assets, a company should regularly make sure that its privacy and data use policies comply with the manner in which it collects and uses customer and employee data. In the US, privacy laws are generally driven by state law, but there may be applicable federal law depending on the nature of the information collected. Tara: That’s a great point. Data security and customer data laws are changing rapidly and continue to change yearly. Also, like you said, if a company conducts business internationally, it may have to adhere to the privacy laws of foreign countries. What company that’s providing either goods or services online is not doing business internationally. Almost every consumer product company that sells online is doing business internationally. Scott: Yeah, that’s right, Scott. Now I think we’ve talked about IP assets that are known to a company. The other thing the company should do is to look into what may not be known. Sometimes, marketing departments and independent divisions spin out valuable intellectual property assets that, for one reason or another, never made it past the desk of general ...
Transcribe →About Face: Courts Weigh AI Face-Swapping Technology and Celebrity Rights
Jan 17, 202500:17:13Tap to summarizeThe Ninth Circuit recently upheld a ruling allowing a class action against NeoCortex, the creators of the Reface app, over the unauthorized use of content creator Kyland Young’s likeness. This case highlights the growing tension between AI innovation and individual rights. Scott Hervey and Jamie Lincenber discuss the lawsuit and what it means for AI companies using digital likenesses on this installment of The Briefing. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: Recently, the Ninth Circuit upheld the District Court’s refusal to throw out a proposed class action brought by a one-time reality star based on the use of his face by an AI-based face-swapping application. The tech company, NeoCortex, argued that its use of the TV star’s face didn’t violate his publicity rights and moved to dismiss the case under California’s anti-slap laws. Both the District Court and the Ninth Circuit on appeal rejected NeoCortex’s This is Motion to dismiss. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and I’m joined today by my colleague, Jamie Lincenberg. We are going to talk about this case and its broader implications for AI companies whose business playbook involves exploiting the likeness of others on today’s installment of the Briefing. Jamie, welcome back to the briefing. Jamie: Thanks, Scott. It’s always good to be here. Scott: Yes, this one, I think, is going to be a real fun one, Jamie. How about we get into this one? Kylin Young brought this suit against Neocortex. Neocortex is the creator of the Reface app. Jamie, have you used the Reface app? Jamie: I haven’t. No, but it sounds fun. Scott: It does sound fun. I haven’t used it either. I’m going to have to give it a shot here. Okay, so Mr. Young alleged that Neocortex used his likeness without consent to promote the Reface app. Reface, it’s an app that allows users to superimpose their faces onto celebrities and images and videos. Kyla Dylan was a cast member of a few reality shows, including Big Brother. The Reface preset catalog contains videos and images of Young from his appearance on Big Brother. Jamie: Young claimed that Neocortex used Young’s likeness in promotional watermarked clips to advertise their subscription service. He argued that the watermarked images created with the free version of Reface were teasers and that the watermarks incentivized users to pay to remove them. They serve as free advertising to attract new downloads of the Reface application. He also alleges that the images generated with the pro-version of Reface are paid products that would then constitute commercial use and purpose. Scott: He alleged that this all violated California’s right of publicity statute, specifically, Section 3344 of the Civil Code. We’re all very familiar with 3344, and anybody who listens to this podcast knows we talk a lot about 3344. So Section 3344 prohibits the use of another person’s name, voice, signature, photograph, or likeness in any manner on or in products, merchandise, or goods, or for the purpose of advertising or selling such products, merchandise or goods without such person’s prior consent. Young brought a class action on behalf of all other individuals whose name, voice, and likeness were used to promote the Reface app without their consent. Jamie: So on the surface, this case probably seems rather cut and dry, but we all know that’s rarely the case. At the district Court level, Neocortex filed a motion to dismiss under California’s anti-slap statute. Scott: Right. So procedurally, the district Court denied Neocortex’ motion to dismiss. Neocortex appealed, and the Ninth Circuit upheld the district Court’s decision. So I I thought it would be good to look at where the district Court and the Ninth Circuit were aligned, because that’s going to be very informative for both AI companies whose playbook involved using individuals likenesses, and also maybe for potentially future aggrieved individuals. Jamie: Right. Yeah. To set the stage, California’s anti-slap statute is designed protect defendants from lawsuits that might stifle their right to free speech or petition. California’s anti-slap statute is a two-step process. The first step, the defendant must show that the plaintiff’s claims arise from an act in furtherance of their right to free speech or petition. Step two, if the defendant makes that showing, the burden shifts to the plaintiff to demonstrate a likelihood of prevailing on the merits their claim. Scott: In this case, Neocortex argued that its use of Young’s likeness and promotional watermarked clips was part of its constitutionally protected commercial speech aimed at promoting its app. Thus, it contends ended the claims fell within the scope of the anti-slap statute. The District Court essentially agreed. It said, wrongful or not, Neocortex use of Jung’s image as a tool to provide users with a mode of creative expression is conduct in furtherance of a user’s free speech rights. Jamie: On appeal, the Ninth Circuit assumed, without really deciding, that Neocortex satisfied the first step of the anti-slap test. Scott: Right. I think that’s really because all the action is really in the second part of the analysis, determining whether Jung demonstrated a probability of prevailing on the merits of his claim. Jamie: So The Neocortex argued that Jung failed to show that Neocortex violated his right of publicity on three grounds. The first is copyright preemption. The second was that Neocortex used was First Amendment transformative use. And thirdly, that Neocortex lacked knowledge that it was specifically using Jung’s likeness. Scott: So let’s take those one step at a time. As to copyright preemption, the district Court found that Young’s claim was not preempted. The reasoning is rooted in the nature of publicity rights. Unlike copyrights, which protect creative works, publicity rights protect a person’s name and likeness. The Court emphasized that the claim targeted the misuse of Young’s likeness in advertising, not the distribution of a creative work. Because Young’s allegations center on how his name and likeness are used in Neocortex products and not on the ownership rights to the image itself, Young’s claim in the complaint does not fall under the subject matter of copyright, and his claim is, therefore not preempted under the Copyright Act. Jamie: Right. The Ninth Circuit agreed with the district Court on this. Scott: Right. That’s correct. Jamie: Let’s now talk about the transformative use argument. The transformative use defense assesses whether a person’s likeness is merely a raw material for creating something new or if it’s the core substance of the work. Neocortex argued that the refaced generated clips were transformative, but the District Court didn’t quite buy that. Scott: Right, it didn’t. The District Court noted that the clips still portrayed Jung in roles that aligned with his public persona, not as something distinct or creatively altered. Neocortex would only be entitled to the defense as a matter of law if no trial or fact could reasonably conclude that the resulting clips or images were not transformative. However, a trial of fact could reasonably conclude that the neocortex’s use of Jung’s likeness was not sufficiently transformative, given Jung’s allegation that the resulting clips and images featured Jung in the roles for which he is known. Jamie: Right. And so the Ninth Circuit upheld the District Court’s conclusion. Scott: Right. And I think this is an important takeaway for establishing transformative use of an individual’s likeness. Using a likeness in a way that doesn’t significantly alter its context or meaning likely won’t qualify as transformative under California law, and therefore, that use probably still could be actionable under 3344. Jamie: Lastly, both the District Court and the Ninth Circuit addressed Neocortex’s contention that Young failed to show that Neocortex had knowingly used Young’s identity in the re-face application. The court highlighted that Neocortex made its database searchable, potentially allowing users to identify specific individuals, including Jung. This level of customization really suggests Neocortex likely knew they were using Young’s likene...
Transcribe →Navigating the Legal Risks for Brands in Social Media Marketing – Part 2 (Archive)
Jan 3, 202500:08:23Tap to summarizeIn part 2 of our social media marketing series, Scott Hervey and Jessica Marlow deep dive into the unique legal risks brands face when navigating social media. From FTC compliance to IP infringement and content clearance, discover the essentials for protecting your brand in the digital age on this archive episode of The Briefing. Find part one here. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: Brands spend a lot of money on social media marketing, and that amount continues to grow. According to a recent survey, ad spend on social media is projected to reach 129 billion in 2024. However, social media marketing presents unique legal issues, not generally present in more traditional advertising. Last week, we discussed the legal risks for the celebrity endorser in social media marketing. This week, I’m joined again by my partner, Jessica Marlow, and we’re going to discuss the legal risks for brands in social media marketing. I’m Scott Hervey with Weintraub Tobin; this is “The Briefing.” Jessica, welcome back. Jessica: Pleasure to be back. Scott: Last week, we discussed the risks celebrities or influencers face in social media marketing. Today, we’re going to talk about the risks brands face in social media marketing. Let’s first talk about FTC compliance. Like influencers, brands have FTC compliance requirements. As you mentioned last week, Jessica, we did an entire episode on this. Jessica: Right, but let’s review a few points because it seems that this can be one of the biggest blind spots for brands. Scott: Sure, you’re right because this really is the biggest blind spot for brands. Previously, the FTC would hold an advertiser liable for misleading or unsubstantiated statements made through endorsements when there is a connection between the advertiser and the endorser. Now, the FTC has recently deleted the wording when there is a connection between the advertiser and the endorser. So generally, there’s always a connection between an advertiser and an endorser because it is, after all, a marketing or a promotional message. However, the FTC pointed out that a connection is not always needed for an advertiser to be liable for an endorsement. If, for example, an advertiser retweets a positive statement made by an unrelated third party or publishes in an advertisement a positive review by an unrelated third party, those statements or reviews become endorsements for which an advertiser may be liable. The despite the lack of any connection. Jessica: Right. Then, there are performance claims. Performance claims must be for the typical result. If the results being hyped are atypical, then the advertiser must clearly and conspicuously disclose the generally expected performance in the depicted circumstances. To be effective, the disclosure must alter the net impression of the advertisement so that it’s not misleading. Scott: If the brand is reposting content from a paid endorser or someone who received anything of value to make that initial post, the brand must make sure that the material connection between the brand and the endorser is conspicuously disclosed. Jessica: In boosting, upvoting, reposting, pinning, or liking consumer reviews of products, a brand should not take action that have the effect of distorting or otherwise misrepresenting what consumers think of their product. This includes suppressing or deleting negative reviews or comments. Scott: Like risks with FTC compliance, similar to influencers, brands also face IP infringement risks. In an influencer marketing campaign, a brand will hire an influencer to create content for the purpose of endorsing and promoting a product. Even though the contract between the brand and the influencer generally requires the influencer to create the original content and not use content that belongs to someone else, sometimes that doesn’t happen. Sometimes an influencer may use, whether intentionally or unintentionally, content that doesn’t belong to them. If that happens in an integration post, the brand faces a risk of being tied up in the copyright infringement case. Jessica: True. As an example, let’s look at the O’Neill versus Ratajkowski case. In that case, model Emily Ratajkowski posted a photo of her outside of a flower shop in downtown Manhattan. The photo showed Ratajkowski with her face covered by the bouquet of flowers. O’Neil sued Ratajkowski and her loan-out company for copyright infringement. But it’s important to note that the content used doesn’t necessarily have to be the entire photo. It could be many things, an image, footage, or even music. The infringement by the influencer may not be intentional. It’s amazing how many people who make their living by posting content think that if something’s on the internet, it’s available to be used. Scott: That’s so true. Even though the agreement between the brand and the influencer may have an indemnity provision, as we said last week, indemnity is only as good as the indemnitor’s pocketbook. While an influencer may contractually have an obligation to indemnify the brand, if the influencer doesn’t have the resources to mount a defense, the defense will end up falling on the brand. Jessica: Right. Occasionally, brands will use UGC or user-generated content on a brand’s social media account. What may be okay in an ordinary person’s post, such as a photograph with multiple cosmetic brands, could become trademark infringement if a brand were to post the same image on its own social media accounts. Scott: That’s right. That could present a big problem for a brand. It’s not so much of the risk that comes from the brand’s interaction with the person that originally created the post or its interaction with the UGC. It’s more that the brand’s social media manager not really understanding the the complexity of the risks involved in using that post as an endorsement. Jessica: Sometimes, it’s also social media representatives who believe that just because something is on the internet means it’s available to be used, or they think that just because an image is in a meme generator, that meme that includes someone else’s image may be freely used by the brand. Failing to understand that just because content is on the internet doesn’t mean it’s available for use can be legally problematic for a brand. Similarly, failing to review the license agreement or terms of use for that meme generator site or photo library site could also be legally problematic. I can’t tell you how many times I’ve looked into a library or a meme site’s terms of use, and I found that they make no representations or warranties whatsoever about having any licenses and don’t provide any indemnity. Scott: Another area where I see brands have issues with is using a stock library where they fail to understand the limitations on the usability of image designated as editorial only. Generally, when an image is designated as editorial only, this means that some type of necessary clearance element, an element that would make the image safe for commercial use, is missing if a brand uses an image that is marked as editorial only, that could have fairly significant legal issues. Jessica: True. If that stock photo contains an image of a person and that person’s rights have not been cleared, then the brand could be facing a right of publicity lawsuit, and if that person is famous, a false endorsement claim. Scott: So, as you can see, there are a fair number of risks that need to be navigated when it comes to brands and social media marketing. Now, these risks can be navigated. We do it all the time, and brands do it all the time. But, it does require thoughtfulness. I think one key takeaway here, Jessica, tell me if you agree, is start ...
Transcribe →Navigating the Legal Risks for Brands in Social Media Marketing – Part 1 (Archive)
Dec 27, 2024Tap to summarizeWhile influencer marketing has become popular in the creator space, it doesn’t come without risks. From IP infringement to FTC compliance, Scott Hervey and Jessica Marlow discuss the key issues surrounding brand endorsement deals in this archive two-part episode of The Briefing. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: Influencer social media marketing is big business, whether it’s a brand integration on Instagram by an influencer or a long-term brand endorsement deal by an A-list movie star. Each deal is different, but there are similar issues that are apparent in all brand deals. I’m Scott Hervey with Weintraub Tobin, and I’m joined today by my partner, Jessica Marlow. Today is part one of our profile on understanding and navigating risks in brand marketing deals on today’s installment of “The Briefing” by Weintraub Tobin. Jessica, welcome back to “The Briefing.” Jessica: Thank you. Happy to be back. Scott: This is something we both deal with frequently from both the brand and the talent side. There are certain risks that celebrities and brands have to navigate in these types of deals. Making these risks more prevalent is the fact that we’re talking about digital marketing, where things tend to move quicker. And for whatever reason, people, even marketing professionals, may sometimes believe that the laws applicable to terrestrial or regular advertising don’t apply to the Internet. Let’s talk about our top general risks from a talent perspective and how to deal with them. Now, we have a bunch of lawyers that listen to our podcast, and you might have a different list, and we would love to hear from you if you think we should have covered something that we didn’t. But this is what we think are the top legal issues in a talent brand deal. Jessica: One of the major risks is IP infringement. Now, this is multifaceted, and the risk of infringement comes from a few different places. First, there is infringement risks that the celebrity or influencer imposes on themselves, which can happen in a few ways. The first way is by using content where the copyright is owned by a third party, for example, where a celebrity or influencer posts an image that they don’t own. You’ve covered a few cases on “The Briefing” about this. Scott: That’s right. One of the more well-known case is what is O’Neill versus Ratajkowski. While that case didn’t necessarily involve brand marketing, it’s a perfect example of this type of risk. In 2009, O’Neill, who was a professional paparazzi, took a photo of Ratajkowski outside of a flower shop in downtown Manhattan. Now, the photo showed Ratajkowski with her face covered by this bouquet of flowers. O’Neill subsequently registered his photograph with the Copyright Office. Now, shortly after O’Neill posted the photo online, Ratajkowski posted the photo on her own Instagram account. The photo she posted was the same, except that she added the words “Mood Forever” to the bottom of the Instagram post. Now, O’Neill, of course, sued Ratajkowski and her loan-out company for copyright infringement. Jessica: Right. And Ratajkowski tried to get out of the case on a fair use defense on a motion to dismiss, but she was unsuccessful. And this case was before the Supreme Court ruling in Warhol versus Goldsmith. Under the new fair use analysis, it’s almost certain that Ratajkowski would not have had a fair use defense. Scott: Yeah, that’s true. And this type of liability isn’t just limited to cases where the photo that is used makes up the entire post. This type of potential liability can exist where the third-party photo only makes up a portion of the poster video. Jessica: Right. It’s just not limited to photos. This could be a video or other similarly copyrighted, protected material like music or logos. Scott: Yeah, and music can be a bit tricky. You would think that almost everyone would understand that you can’t just use your favorite band sound recording in a YouTube video or Instagram story. Unless, of course, it’s offered as music library content from the platform. But you still see that happening. Jessica: True. But where there tend to be more problems with music is not in the use of the sound recording, but in the use of the composition. As you know, there are two copyrights in music. One copyright covers the actual sound recording, and those rights are generally owned by the record company. The other copyright is in the composition, meaning the actual music and the lyrics. The copyright in the composition is generally owned by either a music publisher if the song have a publishing deal, or by the songwriters themselves. When you normally see issues of publishing is where the celebrity or influencer performs as in sings the song. Scott: Now, normally, if you are a celebrity or influencer and you want to record the performance of a song, you have to get what is called a synchronization license from whoever holds the publishing rights in the music, whether that be the publisher or the songwriters. Without obtaining a sync license, your recording and subsequent broadcast of the performance of the song is copyright infringement. Jessica: So not only is this a potential issue for the endorser with the owner of the copyright, but this also could result in a big issue for the brand. First, it’s likely to constitute a breach of the agreement with the brand and result in the endorser not getting paid. Also, if there’s any action by the copyright holder, then the endorser will likely have to indemnify the brand. Scott: Yeah, that’s right. Now, there is another type of infringement risk that an endorser potentially faces. And this one usually comes as a big surprise to endorsers and, frankly, their agents. That’s the endorser’s exposure to either a trademark or a copyright infringement claim based on something the brand does. Now, we previously talked about a trademark case where Molly Sims was sued for trademark infringement, all because of a of a sponsored post she did for a beauty product, which another cosmetic company claimed infringed its trademark. Jessica: I remember that case well. Sims’ involvement in the matter was no different than any other influence or marketing campaign. As part of a product launch, the defendant cosmetic company hired Sims to post a review of its product on her blog. Sims’ blog post acknowledged that the review was sponsored, as she’s required to for the FTC, and included a link to the defendant’s website. The plaintiff, a competing cosmetic company, sued the defendant cosmetic company and Sims for trademark infringement and other related claims. Scott: So, Sims tried to get out of the case early, but the court denied her motion to dismiss. In order to establish direct trademark infringement, the plaintiff must establish the use of its mark by the defendant in commerce and the likelihood of confusion. The judge found that the plaintiff had adequately pled that the blog post was likely to cause confusion as to the source of the product and that Sims’ post was essentially advertising, thereby satisfying the use and commerce requirement. Sims raised some arguments why her use should not constantly trademark infringement as a matter of law, including that the blog post was non-commercial editorial speech. The court said that because this was paid content, it crossed the line from editorial or consumer commentary to commercial use. Jessica: Most endorsers don’t appreciate that a one-off integration for a brand could land that endorser right in the middle of a trademark infringement case. This is why we always fight hard to get indemnity from the brand in every deal we do. But as mentioned in your coverage of the Sims case, indemnity is only as good as the solvency or the corporation of the indemnitor. Scott: Speaking of solvency of the indemnitor, this brings to mind the rash of promoter liability lawsuits against the celebrity endorsers from t...
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