Don’t Fall Down: Mistakes to Avoid
This article originates out of a presentation I gave at the Phoenix Forum legal panel on Friday afternoon, April 5, 2013. It’s a pretty significant honor to join that distinguished panel.
Each of the panelists earned his place at that table, each in a different way, reached by different paths. My own experience includes a significant number of both criminal and civil jury trials to verdict, unlike the other esteemed and accomplished panelists, and that has undoubtedly affected my perspective on the legal troubles of webmasters and content producers so that I see things differently.
I’ve worked as an attorney for adult entertainment interests for nearly 20 years now, more than half of that time with Internet content producers and the operators of sites that distribute their content. Looking back at my experiences with them during those years, it’s easy for me to identify a handful of mistakes that tend to cause serious problems — certainly not every time — but eventually to most operators who make them. Some of these mistakes are easy to avoid once they are identified.
The kind of mistakes I will identify here are mistakes that can cause catastrophic problems, the kind of problems, sometimes, that will not go away even by throwing money on the problems.
Perhaps those other lawyers in this field might chose to identify other kinds of mistakes and other kinds of problems that are easy to avoid based on their own experiences and perspectives, but I must call them just as I see them. I do so here.
No. 1: Copyright Registration
For every 10,000 posts on GFY complaining about copyright infringement, it looks like 9,900 or more are made by posters who’ve never registered a copyright in their lives and who would not know how to register the Mona Lisa if they had painted it themselves. That’s a serious problem. And it’s easy and cheap to avoid.
Registration costs a modest fee, $35 in most cases (but sometimes more expensive for certain kinds of works and in certain circumstances) and a small amount of time in obtaining and completing a form and in transmitting that form, the fee, and copies of the work to be registered to the copyright office. After the first experience and its associated learning curve, in most cases it can be accomplished in an hour.
And without copyright registration, you simply can’t get any kind of a judgment based on infringement from any American judge. That’s simply a requirement of law. Now, in some federal circuits, like the Seventh Circuit in Chicago, it’s possible to stay in court and maintain a lawsuit based on your pending application for registration; judgment will wait for your final registration. In the Second Circuit, based in New York, things are different. If the defendant objects to your lack of registration, the federal judge will dismiss your lawsuit without prejudice, meaning that when your registration finally arrives, you may come back to court, file again, and litigate again. (Your registration date should relate back to the date of your application.)
That’s not all. The law encourages registration by providing two critical benefits only to authors who register within the first three months after first publication of the work or prior to the act of infringement. Those awesome benefits, which often make all the difference between a case that can’t practically go forward and one with a chance or practically prevailing, are the right to an award of your reasonable attorney fees as part of the judgment and an award of presumed statutory damages, damages you may be awarded without actual evidence of your financial loss or the economic benefit to the infringer. Those damages are often difficult to prove, speculative in nature, and both complicated and expensive to prove in the context of the commerce in images within the adult internet. These benefits make a critical difference.
Ask yourself why a guy in a black robe sitting high on a bench should care much about your copyright if it was not worth $35 and an hour of your time to protect. Register all of your content within three months of first publication. Period.
No. 2: Who Owns Your Site? Who Owns Your Content? A Word About Work for Hire Agreements
You might think that if you pay others to create things for you, that you should always own the fruit of the labors for which you paid. But it’s not always so.
The “Workshop Doctrine” generally provides a legal basis for your ownership of the creative works made by your employees in the course and scope of their employment. Actual, formal employment seems to be rare in the operation of the adult internet except in the largest operations. When the overwhelming amount of content is shot and websites designed and scripts composed, it is usually done by independent contractors rather than employees. In the absence of a written work-for-hire agreement, it is those persons who own the rights, and if they are neither bound by a work-for-hire agreement nor assigning (that is selling) the content to you, at best you have a nonexclusive, terminable, oral license to use the content. This puts you in territory that subjects you to such bad things as demands for royalties, threats to revoke the license, and the assignment or license of rights in this content to others — including your competitors.
No. 3: The Importance of Written Agreements With Employees and Contractors
That leads us directly to a closely related issue; it is always a mistake to pay for any ongoing work of any character with anyone without a written agreement that lays the foundation course of the relationship and which adequately protects you from a bunch of other important issues, each of which is a potential, businesscritical, crisis.
The subject of whether a worker is your employee or your independent contractor or your agent has many important consequences, and in the absence of a written agreement, and often even with some kinds of written agreements, the law will apply a variety of different tests, depending on the issue being analyzed (e.g. overtime claims, worker’s injury compensation claims, IRS withholding claims, minimum wage, authority to bind you with others contractually) and ultimately may determine whether that worker owns the content you paid him to create or whether he or she does.
You should understand each of these tests — and assess the copyright ownership issue — and do your best, under the watchful eye of an attorney, to create a written agreement that characterizes the relationship, protects your copyright and your trade secrets and confidences, and generally covers the waterfront. It should be repeated that the character of the relationship is not determined exclusively by a contract or any other document, but it is also importantly established largely by your pattern of dealing with workers and the factual circumstances in that pattern. You can and should engineer and structure these matters, too, for your benefit, before the relationship begins. Once it starts, it may be too late to characterize it as you wish.
A word of caution: a worker is not an “independent contractor” just because you and he or she entered into a written agreement saying so. The law is not blind to the facts, and some legal responsibilities — such as overtime claims — are not entirely congruent with traditional notions about the employee/contractor divide in the same manner that its assessed by the IRS.
Unless you have a written work-for-hire agreement, the law will not imply or suppose it. Unless you have a written (and reasonable!) noncompete agreement, the law will not infer its existence. Unless you bind your workers to silence for a reasonable time about your communications and secrets and special means and methods, you will have no recourse in most cases when they pillory you in public after the relationship goes sour. (A much more detailed article about nondisclosure agreements in particular was published in XBIZ World’s April issue or online among the articles on my site, XXXLaw.com.)
It’s a dumb idea — which will surely come back to hurt you eventually — to begin a new relationship with any kind of worker without a competently and well-crafted agreement that protects you to the maximum extent possible — and the creation of protocols for dealing that dovetail with that agreement, support it, and establish a pattern consonant with your legal theory of the nature of the relationship.
No. 4: Watch What You Say and Write To Your Workers
The subject of NDAs directly and logically leads to just what things you may need to keep confidential.
Some folks are just motor-mouths who say whatever pops into their heads, and some of them, especially in this industry, are keen to express some very not-politically correct social and political — and even ethnic — ideas, and even matters that should be their darkest secrets, to the unfortunates who depend upon them for income, as a captive audience. You might think that this sort would fail, but many of them actually succeed in this space. An NDA is a step in the right direction, one that mandates confidentiality at least for a reasonable time about what is communicated within the control group or with superiors.
But it’s far easier, and much surer as a remedy to this problem to keep your mouth shut and to make your conversations professional. You should not be talking about your sex life with the people who work for you, strange as that might sound in this industry to some ears. It may come back to haunt you in many ways, from allegations of a sexually intimidating workplace to outright blackmail. And if you are antisemetic, or harbor hatred for black people or undocumented aliens or Roman Catholics or whatever, just keep your thoughts to yourself because to do otherwise in the presence of people who will, some day, have a motive to hurt or extort you, is simply a sign of idiocy.
Oh, and by the way, you should not have sex with the people you pay. At least off-camera, anyway. It leads to really bad trouble sometimes; when it hits, it hits with a fury, and the only way to protect yourself against the catastrophe it may lead to is to avoid it. Always. No matter how attractive that worker seems. OK, now you’ve heard it from a lawyer, so don’t say you weren’t warned.
No. 5: Try As Hard As You Can To Leave Everyone Who Deals With You Smiling
So far as I have been able to learn, “bad luck” is very rarely the cause of serious adversity in the adult industry. What people call bad luck is often payback. Sometimes the impetus of the “bad luck” is a mystery, but very often it becomes known to the target. (Even if they won’t tell others about it. It’s so much easier than telling the people around you that you had it coming!) Though it’s hard to pin down from the available facts, it looks to me like every (or damn close to “every”) criminal obscenity case that we’ve read about in recent years was the consequence of an adverse contact between someone and the person who eventually became a defendant. This so-called bad luck can happen in many different ways — and the payback can take a nearly endless variety of forms. Once you’ve majorly honked someone off, it’s essentially impossible to stop the freight train that may roll over you. All you can do is to try like all hell to detain that train at the station.
The very most important advice that I’ve given each business client of mine over several decades is to try as hard as you can to create no enemies, to leave people feeling good and fairly-treated by you, and when you hurt people, to try as hard as you can to make it up to those persons.
Disregard this most-important suggestion at your own risk.
This article is written to generally inform the public and does not provide legal advice nor does it establish an attorney-client relationship. If you have a legal issue or question, contact a lawyer. If you are arrested, make no statement and contact a lawyer immediately.
J. D. Obenberger is a trial lawyer who has represented adult interests since 1993 and has practiced law since 1979. He represents clients from Budapest to Hong Kong with stops in every region of the U.S. His email address is firstname.lastname@example.org, his firm website is XXXLaw.com, and he can be followed on Twitter at @2257JD.