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Exploring Terms of Cam Use

Exploring Terms of Cam Use

August 16, 2013
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" But in some instances, live content aggregators and those promoting live cam content may also be exposed to both criminal and civil liability associated with the actions of live cam show producers, such as live cam performers. "

The live cam business is one of the adult entertainment industry’s best performing market segments. Consumers now purchase enough live cam show minutes to support thousands of regular live cam performers each day. And the trend is for more and more adult entertainment entrepreneurs to become involved in one or more aspects of the live-cam business, such as by providing the live content, by aggregating access to live performers, or by promoting live cam shows through affiliate marketing or the sale of advertising. Unfortunately, however, widespread participation in the live cam business has not yet resulted in widespread understanding about the numerous laws and legal issues involved in this relatively new part of the adult entertainment business.

The following is a list of 10 key legal matters you should consider if you are operating or promoting an adult web cam business, or considering doing so.

1. LIVE CAM SHOWS ARE SUBJECT TO THE CHILD PORNOGRAPHY LAWS

All live chat performances are subject to child pornography laws. Often live cam performances are also often subject to child pornography laws in more than one country. For example, a sexually-oriented live chat session will often be subject to the child pornography laws, and other laws, of the country in which the subject performance is created and of one or more countries in which the performance is viewed. Needless to say, given the enormous potential liability associated with the creation, transmission and possession of child pornography, this is, in my opinion, the single most important legal consideration associated with the providing or promoting of any live adult chat service. It is imperative for a provider of sexually explicit live cam shows to know what specifically constitutes child pornography and to fully understand that any violation of child pornography laws can result in a long incarceration and huge fines. It is also important to note that the U.S. and many other countries are parties to extradition treaties covering violations of the treaty party country’s child pornography laws. Regardless of whether a company is operating its own live cam business or affiliating with another, great care must be exercised to be sure that appropriate age verification procedures are in place to ensure that each live cam performer, and every other person appearing in a sexually explicit live cam transmission, is provably an adult.

2. THE 2257 REGULATIONS APPLY TO LIVE CAM SHOWS

The federal record-keeping and labeling laws, known as the 2257 regulations apply to live adult cam shows, as well as, to transmitted recordings of live shows, if they depict actual or simulated sexual acts, such as masturbation or lascivious exhibition of the genitals or pubic area (clothed or unclothed). For example, the following pertains to the 2257 regulations’ requirement that a recorded copy of each depiction subject to the 2257 regulations be maintained in the producer’s 2257 records system:

“For any performer in a depiction performed live on the Internet, the records shall include a copy of the depiction with running-time sufficient to identify the performer in the depiction and to associate the performer with the records needed to confirm his or her age.”

Under the 2257 regulations the party that initially creates the content subject to 2257 regulations is defined as a “producer” of the content. Each producer is required to create and maintain certain records pertaining to the content and to affix a statement to the content indicating where and by whom the records are kept. In the case of a solo live chat performer in the business of providing live sexually explicit content via live cam shows, the performer himself or herself will likely be the primary producer obligated to comply with the record-keeping and labeling obligations of the 2257 regulations.

I have found that many persons operating adult live cam businesses are surprised that video chat performances are subject to 2257 regulations, and even more so when I explain that live cam performers may have record-keeping and labeling obligations under the regulations as primary producers. But in my experience, even lesser known is the obligation imposed by the 2257 regulations upon non-producer sellers of content subject to the 2257 regulations. This is an obligation under the 2257 regulations that is separate and apart from the primary and secondary producer’s record-keeping and labeling obligations generally known by most content producers.

Specifically, Section (f)(4) of 18 U.S.C. §2257 and U.S.C. §2257A states that it is unlawful for any person to knowingly sell, offer for sale, or transfer, any content that is subject to the 2257 Regulations which does not have a compliance statement describing where the records required to be kept by the producer of the content are located. Live content aggregators should be particularly mindful of this obligation. This is because their sale or transfer of live content subject to the 2257 Regulations, such as that produced by a solo independent cam performer-producer in a cam show, might subject an aggregator to liability under Section (f)(4) if the content does not have an affixed compliance statement stating where the 2257 records appurtenant to the cam show are maintained.

While the FBI has admitted that the government is not currently conducting 2257 inspections, the United States Department of Justice (the part of the government charged with enforcing the 2257 regulations) has not backed off its repeatedly stated position that any violation of the 2257 regulations, no matter how trivial, comprises a fully chargeable offense under the 2257 regulations subjecting the offender to up to five years in prison for the first count and up to ten years for each subsequent count.

3. SEXUALLY EXPLICIT LIVE CAM SHOWS ARE SUBJECT TO THE OBSCENITY LAWS

Like sexually explicit videos and photographs, live cam shows are also subject to federal and state obscenity laws. As such, all the potential liability associated with distribution of obscene matter applies to live video conferencing services. This includes the potential for lengthy prison sentences, huge fines, and forfeitures. Obscenity law violations are also predicate acts that can trigger charges under the federal money laundering statutes and charges under the Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act. The application of the obscenity laws also means that promoters could be liable vicariously, for example, for aiding and abetting the distribution of obscene matter if one or more of the live chat shows are found to be obscene.

4. LIVE CAM SHOWS CAN INFRINGE ONE OR MORE COPYRIGHTS

Live cam shows can often include works protected by copyright that are owned by a third party. For example, when a cam performer plays music in the background during his or her show, if the show’s producer (who is often the performer) does not have the right to publicly perform the music being played, such performance may infringe one or more copyrights in the music and in the sound recording of the music. This can subject the show producer to substantial copyright infringement liability. For example, the owner of a registered copyright to a song could seek up to $150,000 in statutory damages for intentional infringement of the owner’s copyright.

But music is not the only kind of artistic work that is subject to the copyright laws. Other types of artistic used or included in a live cam show without authorization, even inadvertently, can also subject the show’s producer to copyright infringement liability. For example, a painting, a photograph or other artwork visible in the background, television shows or movies playing in the background, and even tattoos on the bodies of live performers, could all constitute copyrightable works, which, if infringed, could subject the show’s producer to substantial liability.

Additionally, live content aggregators may also be subject to potential liability for copyrightable works infringed in a live cam show as “contributory” copyright infringers (see No. 10 to the right).

5. LIVE CAM SHOWS CAN INFRINGE ONE OR MORE TRADEMARKS

Live cam shows that include one or more trademarks can also expose the live cam show producer to liability for trademark infringement and other related actions. For example, if a performer provides a live sex show via an adult chat service while using a product that bears a famous trademark, such as a Barbie doll, or a bottle of Coca-Cola, the owner of the mark may be entitled to bring an action against the cam show producer on the ground that the company’s famous mark is being tarnished by the association of the mark with the live sex show.

6. LIVE CAM SHOWS CAN INFRINGE ONE OR MORE PATENTS

Many of the technologies used to provide live video are, or potentially are, subject to one or more domestic and/or foreign patents owned by one or more third parties. Not long ago, for example, one such patent owner, Joao Control & Monitoring Systems of Texas LLC sued several adult live cam providers, claiming patent rights to certain live video technologies.

Patent infringement can result in particularly long and costly litigation for adult entertainment companies. In fact, the mere allegation of patent infringement can often be quite costly regardless of whether the technology used is ultimately found to be noninfringing because there is no provision in the law currently that entitles a wrongly accused patent infringement defendant to collect attorney’s fees.

Since it is likely that live cam technology will continue to improve and be subject to an ever-increasing number of domestic and foreign patents, providers of adult live cam technology should maintain an ongoing awareness of developments in this important area of the law affecting their business.

7. PROVIDING A LIVE CAM SHOW MIGHT BE DEEMED TO BE PROSTITUTION IN SOME INSTANCES

Strange as it may seem, live sexually explicit cam shows performed at the direction of one or more paying cam show customers might possibly constitute prostitution under the laws of some states and some foreign countries. This is because some jurisdictions define prostitution so broadly that the definition includes the mere payment to a person to masturbate (or have sex with a third party) for the purpose of causing a person’s sexual arousal or sexual gratification. Thus, in some locations, an act of prostitution can occur without the prostitute and the person engaging the prostitute ever even touching each other.

Consider, for example, Nevada’s definition of prostitution. In short, in Nevada prostitution is engaging in sexual conduct for a fee. “Sexual conduct” in Nevada is, in turn, defined as any act set forth in the state’s statutory definition of a “prostitute” which states that a “prostitute” is a male or female person who for a fee engages in sexual intercourse, oral-genital contact or any touching of the sexual organs or other intimate parts of a person for the purpose of arousing or gratifying the sexual desire of either person.” Therefore, using the foregoing definition, if a live cam performer touches his or her sexual organs or other intimate parts for the purpose of arousing or gratifying the sexual desire of an online cam show customer, that performer might well be engaging in “sexual conduct” for a fee, which, under Nevada law would fit the definition of prostitution.

8. LIVE CAM PERFORMERS MAY BE SUBJECT TO LOCAL LICENSING REQUIREMENTS

As the live cam business evolves, so too will new business models. There has already been a departure from the now-standard live cam fare of sexually explicit conduct on demand. In some instances live cam performers provide other types of services, such as fortune telling, dating advice, life coaching, heath counseling, etc. In some jurisdictions, however, services, such as fortune telling, psychological counseling, investment counseling, etc., are subject to local licensing requirements and other governmental regulations. Providers of such services via live cam communications, and related live content aggregators and promotion affiliates should be aware of, and comply with, all such applicable regulations.

9. ACTIVITIES IN A LIVE CAM SHOW MAY BE SUBJECT TO FOREIGN REGULATIONS

Live online cam shows, while performed in one location, might well be viewed and interacted with from literally anywhere on the planet where such performances can be accessed via the Internet. As such, explicit live cam shows, and those who perform in them, produce them, and/or promote them, are often subject to numerous laws in numerous states and countries. Live cam performers and related live content aggregators and promoters should be aware of this, and take steps to learn about, and comply with, all applicable regulations. This can, of course, be quite difficult, and will likely be economically unrealistic on a global basis for most live cam enterprises. But that will not eliminate the potential liability that can result from the violation of one or more laws in one or more foreign jurisdictions. To address this issue some companies geo-limit access to their live cam shows to those countries for which they have sufficient knowledge of applicable laws and for which compliance is economically reasonable.

10. LIVE CAM PERFORMANCE AGGREGATORS AND PROMOTERS OF LIVE CAM SHOWS MIGHT BE EXPOSED TO LIABILITY ARISING FROM THE ACTIONS OF LIVE CAM PERFORMERS

Many of the legal concerns discussed above directly arise from the creation and/or source transmission of sexually explicit live cam performances. As such, the persons primarily liable for criminal law violations and intellectual property rights infringement arising from such performances are usually those responsible for the production and/or initial transmission of the performances.

But in some instances, live content aggregators and those promoting live cam content may also be exposed to both criminal and civil liability associated with the actions of live cam show producers, such as live cam performers. This could occur, for example, in situations where a live cam content aggregator knows or should have known of criminal activity associated with a live cam performer’s shows (e.g., use of under age performers, non-compliance with the compliance statement provisions of 2257 regulations, etc.), and the aggregator profits or is otherwise paid from revenues directly generated by such shows. Similarly, a live cam company might be exposed to civil liability for the infringement of a third party’s intellectual property rights as a contributory infringer, if the company knowingly provides to a live cam performer the means by which copyrights, trademarks or patents are infringed.

In some instances, the risk of contributory copyright infringement can be reduced for some live content aggregators through the effective use of certain statutory limitations of liability for copyright infringement provided by the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA).

It is in the best interest of each live content aggregator and each provider of transmission means for live cam shows, to endeavor to become familiar with the DMCA’s safe harbor provisions, if not already.

The list above is by no means comprehensive. And as new technology develops to bring videoconferencing to virtually every computing device we own with a display, it is clear that this area of adult entertainment will continue to present numerous new legal responsibilities and challenges on par with the expanding business opportunities that will develop. Therefore, if you are in, or are affiliated with, a live cam business, or you are considering starting one, I strongly urge you to consult with an attorney experienced in the area of live online adult entertainment, if you have not already done so.

This article is not intended to be, nor should it be considered to be, legal advice. If you have a legal question or other matter related to the any of the topics discussed in this article, I strongly suggest that you either contact our office at the number below or seek the counsel of another qualified and experienced adult entertainment law firm familiar with the legal matters discussed in this article.

Gregory A. Piccionelli is an intellectual property attorney specializing in adult entertainment matters. He can be reached at Piccionelli & Sarno at (818) 201-3955 or greg@piccionellisarno.com.


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