Kayla Kraft (no known relation to the cheese people) found herself on a Natural Light coaster with a fake handlebar mustache drinking a beer under the heading “Every Natty Has a Story.” She apparently didn’t like that story and just sued Anheuser-Busch, the makers of Natural Light beer, for copyright infringement and invasion of privacy.

According to the complaint, in 2013 Kraft’s friend Kathyrn Belasco snapped the mustachioed photo of her using Kraft’s phone. Kraft then posted the photo on Facebook. Three years later, Belasco assigned all of her rights to the photo to Kraft.

News reports say that the photo was submitted to Natural Light’s Facebook page as part of the “Natty Rewards” contest run in 2014 by Anheuser-Busch where contestants were asked to submit a photo of themselves “acting natural.” (Unknown whether drinking beer with a fake mustache was Ms. Kraft’s natural state.) Rules are here. The Rules provide that photos submitted are the original work of the entrant and do not infringe upon anyone’s copyright or publicity rights. The Rules also grant Anheuser-Busch a license to use the photo in any and all media for any purpose. Basically, the Rules say everything that’s typical for a UGC contest.

The Complaint doesn’t mention the contest, but does allege that the photo has been used as part of Natural Light’s “Every Natty Has a Story” campaign without Kraft’s or Belasco’s consent. Anheuser-Busch has not yet answered the Complaint.

Assuming the photo was submitted as part of the contest, this lawsuit raises a number of interesting issues.

Is an unsigned release to use a photo submitted in a contest enforceable?

Probably. While Official Rules are contracts and binding on entrants, there are arguments that can be made that an unsigned release may not be binding. For example, courts have refused to enforce liability releases on the backs of ski lift tickets and other consumer (unexecuted) terms and conditions.

Can a Sponsor require a contestant to provide a license for use of a photo in a completely different promotional campaign?

Probably. Generally, a court will enforce a broad license given with knowledge by the licensor. But like the release issue, it could be more difficult to enforce this provision when it is buried in long and hard to understand rules and there are questions as to whether the contestant was aware he/she was giving up these rights.

What if the person in the photo and the photographer are not one in the same?

Both the photographer and the person in the photo have rights that cannot be exploited by the Sponsor without proper consent. The photographer – copyright; the person – publicity rights. If the entrant is either the photographer or the person in the photo, the Rules won’t obtain full rights to the photo. Stating in the Rules that the entrant represents that he/she has all rights to the photo may not prevent the disgruntled copyright holder/photographer from suing. The Sponsor could have a misrepresentation claim against the entrant, but the situation may become more of a mess than the Sponsor bargained for.

What are some other options that can be taken by a sponsor?

  • Require the entrant to be both the photographer and the subject of the photo. I hear that selfies are popular these days.
  • Make the release language in the Official Rules clear and conspicuous. Give this section of the rules a heading; make the language understandable to entrants; and consider spelling it out at the beginning of the rules if you plan on having the UGC posted during the term of the contest.
  • For online entries have an “I agree to these Official Rules” box immediately after the Official Rules and require entrants to click it before being allowed to enter. Under the federal ESIGN Act, this is as an electronic signature with the same binding effect as a written signature.
  • Have both entrants and the photographer electronically consent to the rules or actually execute releases prior to or along with submitting an entry. Though more cumbersome, you could ask an entrant to print out the release forms to sign and provide with his/her entry.

This recent case again illustrates that whether you’re the King of Beers or a start-up venture, a Sponsor can try to do everything necessary to run a promotion, but there are always potential litigants out there looking for a (can) opening to sue.