A North Carolina woman has commenced legal action against Anheuser-Busch, LLC (“Anheuser-Busch”) and its North Carolina distributor, R.A. Jeffreys Distributing Company (“R.A. Jeffreys”), in connection with Anheuser-Busch’s “Natty Rewards” promotional contest and “Every Natty Has a Story” marketing campaign.

How can well-drafted contest rules help protect sweepstakes and contest sponsors?

“Natty Rewards” Promotional Contest

From March 6 to June 1, 2014, Anheuser-Busch sponsored the “Natty Rewards” promotional contest, which encouraged participants to submit photos via Facebook of themselves “acting natural” (e.g., hanging out with friends or acting with spontaneity) while incorporating Anheuser-Busch’s Natural Light beer brand. According to the applicable contest rules, an independent panel of judges selected the contest winners, who were then awarded Natty Light-branded merchandise or a redeemable prize code.

Further, the “Natty Rewards” contest rules specified that, as a condition of participation in the contest, each entrant:

  • had obtained permission to use the likeness of the photo’s subject (to the extent that it was not the entrant him/herself); and
  • granted Anheuser-Busch an irrevocable worldwide license to exploit each submitted photo (and the likeness of the photo’s subject(s)) for commercial purposes.

User-Generated Content and Lawsuit

In 2013, Greenville, North Carolina resident Kayla Kraft was photographed by a friend at a local bar while wearing a fake mustache and drinking a bottle of Natty Light. Years later, Kraft learned that Anheuser-Busch had incorporated the subject photo onto coasters and posters distributed at bars and restaurants as part of its “Every Natty Has a Story” promotional campaign. Subsequently, Kraft obtained ownership of the photograph’s copyright from her friend, then registered the work with the U.S. Copyright Office.

On February 20, 2017, Kraft sued Anheuser-Busch and R.A. Jeffreys in the U.S. District Court for the Eastern District of North Carolina (Case No. 17-cv-22) for alleged copyright infringement and misappropriation of Kraft’s right of publicity. Kraft is seeking unspecified monetary damages, as well as injunctive relief that would ban the defendants’ continued use of her photograph.

In response to Kraft’s lawsuit, Anheuser-Busch has denied all wrongdoing, claiming that the subject photograph was submitted to Anheuser-Busch’s Natural Light Facebook page as part of its 2014 “Natty Rewards” promotional contest and, therefore, that its use is governed by the associated contest rules. It is not immediately clear who submitted the subject photograph to Anheuser-Busch, or whether the contestant was awarded a prize of any kind.

Well-Drafted Contest Rules: Invaluable When Trouble Is Brewing

As the above-referenced case illustrates, well-drafted contest rules can help protect promotional contest and sweepstakes sponsors from substantial liability in the event of a dispute. As such, before sponsoring any contest, sweepstakes or other promotion, businesses should retain an experienced promotional marketing attorney to help formulate the contest and draft associated contest rules.