Today’s corporate marketing campaigns almost invariably involve social media. Forward-looking brands may integrate traditional and social media platforms in a single campaign, sometimes pulling user-generated content from one platform and repurposing it on another. While well-executed cross-platform campaigns generate valuable exposure at reasonable prices, the potential legal issues are far thornier than in traditional campaigns.

For example, Ben & Jerry’s "Capture Euphoria" campaign invited the public to post photos to Instagram, using the #captureeuphoria hashtag. Photos instantly posted to a portion of the Ben & Jerry’s website, and winning photos were selected to appear on billboards, in print media, and in outdoor venues in the winner’s region. YouTube videos promoted the campaign and displayed winning photos.

WHOSE CONTENT IS IT, ANYWAY?

In a traditional campaign, content is usually produced by an agency as a work-made-for-hire for the brand. Actors or models are paid and their images are licensed, music is licensed, location releases are obtained, and no extraneous material is depicted. This protects the advertiser from claims of unauthorized use of content or of people’s images.

But these protections fly out the window for campaigns built around user-generated content.

To create an Instagram or Twitter account, a user must agree to the Terms of Use, including language warranting that the account holder owns or has rights to the content she posts, and that the content she posts does not infringe any third-party intellectual property rights.

"While well-executed cross-platform campaigns generate valuable exposure at reasonable prices, the potential legal issues are far thornier than in traditional campaigns."

All too frequently, however, the user does not actually have all the rights to the content. For example, if people are depicted in the photo, they may have a right of publicity. If products are depicted, the brand owners may have trademark rights. The photographer may have a copyright interest in the photo, but the photographer and poster may not be the same person.

Instagram and Twitter’s terms contain language granting the sites non-exclusive royalty-free licenses to any user content posted, including the right to sublicense the content. Because of the sublicense right, advertisers may purchase the right to repurpose the user content for cross-platform marketing. But, if the content poster did not have the underlying rights to begin with, there is nothing to be licensed to Instagram or Twitter or sublicensed to advertisers.

"Instagram and Twitter’s terms contain language granting the sites non-exclusive royalty-free licenses to any user content posted, including the right to sublicense the content."

Failure to clear the underlying rights to user-generated content exposes advertisers to potential liability for intellectual property/right of publicity infringement and other claims. If a rights holder proceeds against the advertiser, the poster’s representation that all content was clear to post will not be worth the (electronic) paper it’s printed on. Advertisers will not risk the public relations debacle of going after customers for money to defend or pay damages in an intellectual property lawsuit. And since the poster’s representation was made on the site where the content was originally posted, it may be hard to argue that the poster breached any representation or warranty to the advertiser.

Although many rights holders will feel flattered to see their image or content used in a marketing campaign, advertisers should not count on this. As one cautionary tale, Facebook recently settled a right of publicity and unfair competition class action concerning its use of names and profile pictures in advertising without obtaining permission from the users.

THE DIGITAL MILLENNIUM COPYRIGHT ACT

User-generated content online has flourished in part because of the Digital Millennium Copyright Act (DMCA), a federal law containing "safe harbor" provisions against liability for copyright infringement for websites incorporating user-generated content. Such websites are generally protected from copyright infringement claims if they do not have actual knowledge of, and are not willfully blind to, specific copyright infringing material. The law sets forth procedures whereby a copyright holder may contact the website to seek removal of content. Similar principles apply to trademark infringement, although there is not an analogous federal law.

To fall under the DMCA safe harbors, content must be stored on a website "at the direction of a user." While this is clearly the case when a user uploads content to Instagram or Twitter, to this author’s knowledge, courts have not addressed whether an advertiser that deliberately pulls user content from those websites and repurposes it is protected by the DMCA. It seems unlikely that the DMCA would apply, because users did not place the content on the advertiser’s website.

On the other hand, where an automated system pulls content with a certain hashtag onto the advertiser’s website, courts could find that users’ decision to use the hashtag means that the users have directed the content to the advertiser’s website, making the DMCA applicable. As courts have yet to address these issues, advertisers can only guess at whether they will be afforded the DMCA’s protections.

"User-generated content online has flourished in part because of the Digital Millennium Copyright Act (DMCA), a federal law containing ‘safe harbor’ provisions against liability for copyright infringement for websites incorporating user-generated content."

REGULATORY CONCERNS

In addition to intellectual property issues, advertisers should be aware that the Federal Trade Commission’s endorsement guidelines specifically address social media and may apply to cross-platform campaigns. The FTC’s definition of endorsements includes "depictions of the name, signature, likeness, or other identifying personal characteristics [e.g. Twitter handle] of an individual...that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser...."

By asking users to post a certain type of photograph with a particular hashtag, especially if the advertiser’s product is depicted, advertisers are arguably soliciting endorsements. And using the photographs in marketing campaigns, or offering some sort of coupon, donation, or other reward for posts, could be seen by the FTC as compensating the users for the endorsement. If FTC guidelines apply, the compensation to the endorser must be disclosed. The endorsement may not be deceptive, and it must reflect the opinions and experience of the endorser, who must be a bona fide user of the product or service.

"By asking users to post a certain type of photograph with a particular hashtag, especially if the advertiser’s product is depicted, advertisers are arguably soliciting endorsements."

Advertisers may not need to change much, as the connection may be evident from the campaign. Cross-platform campaigns generally explain that, by uploading a photo with a particular hashtag, users may be rewarded by having the photo appear on the website or in other marketing materials. The FTC does not mandate specific language for endorsement disclosures, so the information on the website displaying the photograph may be enough—but it should also be included in other marketing materials.

Another regulatory concern when structuring the cross-platform marketing campaign is running afoul of state laws on contests and sweepstakes, which are heavily regulated in some states. Rules must be clearly available. But unlike an online contest that requires clicking "I Accept" before entering, if the main entry method is applying a hashtag on Twitter or Instagram, the advertiser does not have a way to establish that the user was aware of the contest rules.

WHAT’S AN ADVERTISER TO DO?

Although courts and regulators have not yet weighed in on cross-platform marketing campaigns, advertisers should consider a few possibilities to limit exposure. Human monitoring of posts before they are displayed on the advertiser’s website may be useful in flagging blatant copyright or trademark violations or inappropriate content. But it could eliminate the possibility of a successful DMCA defense. It also may be costly, depending on the size of the campaign.

"Although courts and regulators have not yet weighed in on cross-platform marketing campaigns, advertisers should consider a few possibilities to limit exposure."

Even if the DMCA does not apply, it is wise to establish a simple notice and takedown process that allows rights owners to contact the advertiser requesting removal of infringing content. This process will facilitate removal of any inappropriate content, particularly if no monitoring has taken place. The key to a successful notice and takedown procedure is the responsiveness of the advertiser. If takedown requests end up in an unmonitored mailbox, the situation could escalate into litigation.

Finally, if advertisers intend to make prominent use of a particular photograph, as Ben & Jerry’s did when it displayed winning photos on billboards, posters, and magazines, the advertiser should conduct a formal clearance process, obtaining releases from the photographer and any individuals depicted and coordinating with counsel.

This article originally appeared in Corporate Counsel on September 3, 2013.