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Mobile Content Laws: 2

Mobile Content Laws: 2

April 15, 2005
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" to reach the largest possible mobile market requires content and distribution protocol adjustments for a dizzying number of phone types and networks. "

In Part 1, we looked at the growth of mobile technology and how entrepreneurs are exploiting the medium. Today, we'll examine the laws surrounding the distribution of adult content via mobile networks.

  • Know the law. Many of the laws that pertain to the distribution of adult content via the web also apply to distribution of adult content via mobile phones. That means that hardcore materials distributed via cellphones are subject to obscenity prosecutions. Similarly, the materials must also be compliant with the federal record keeping and labeling laws (18 U.S.C. §2257 et seq. and 28 C.F.R. Part 75 et seq.).

Additionally, distribution of sexual materials via telephones is subject to the federal "dial-a-porn" law, 47 U.S.C. § 223(b)(2)(A), which prohibits the use of a telephone for "any indecent communication for commercial purposes which is available to any person under 18 years of age or to any other person without that person's consent, regardless of whether the maker of such communication placed the call."

The existence of this law is one of the main reasons why domestic mobile telephone service providers are unwilling to allow their network servers to be used to distribute sexual materials.

The federal dial-a-porn law does contain a "safe harbor" defense if the provider of the content has notified the relevant common carrier in writing that the provider is providing sexual content and the caller is required to provide payment by a credit card before transmission of the content.

The mobile content company's compliance with all laws also is important because their violation of law could potentially subject you to prosecution for aiding and abetting or conspiracy.

  • Learn about the mobile content provider. Most mobile content companies have been in business for less than five years. Some are barely more than startups. Therefore, before you enter into an agreement with any mobile content company, it is wise to check them out. Appropriate areas of inquiry include length of time in business, annual revenue, track record with other content providers and the company's agreements with telephone service providers.

If they represent to you that they have great relationships with the major telephone service providers, you should obtain independent confirmation from the providers.

Additionally, given your potential exposure to criminal prosecution resulting from the actions of the mobile content company, a background check of the principals may be warranted, particularly if the company is a foreign entity.

Here are some additional issues to consider when negotiating your agreement:

  • Warranties. The contract should contain a number of specific warranties to protect your content, your company and you. For example, the mobile content company should warrant that it will at all times comply with all applicable laws, including the record keeping and labeling laws, laws prohibiting the possession or distribution of child pornography and laws prohibiting the distribution of sexual content to minors.

There also should be warranties that your content, your company name and other trademarks will not be used in any manner other than what you have agreed to.

  • Short-term agreements. You may want to limit the duration of your content license to a year or even six months. The mobile content market is very dynamic and rapidly evolving. There are few if any undisputed leaders in the field of mobile adult content distribution, and many of today's mobile content companies may not even exist in two or three years. Additionally, what is currently technologically complex is likely to become less so over time.

For example, currently, to reach the largest possible mobile market requires content and distribution protocol adjustments for a dizzying number of phone types and networks.

This is an expensive expertise that is currently cost-effectively provided only by certain mobile content companies and telephone service providers. However, greater standardization and ease of web-to-phone distribution is anticipated in the near future. Consequently, what is technologically difficult, complex and costly today may not be so in a year or two.

  • Performance criteria. You may want your agreement to require the mobile content company to meet specific performance criteria to maintain your content license.

For example, you might require that as a condition for renewing your agreement at the end of the first year, the mobile content company must have generated and paid to you a specified threshold amount of licensing fees.

  • Don't over-license. Grant limited licenses. Only grant rights that the mobile content company has the ability or the capacity to actually exploit. For example, if your library contains both explicit and non-explicit content, and the mobile content company lacks the legal means of distributing explicit content in the United States, there is no need to grant to the company exclusive worldwide rights to your entire library.

You may also want to preserve your future options to better exploit your content by only granting nonexclusive licenses to mobile content companies.

  • Maintenance of good relationships with telephone service providers. You may want to require that continued good relations with the telephone service providers be a material term of the agreement.

If, as an inducement for you to enter into the agreement, the company represents that it has great relationships with telephone service providers, you may want to reserve the right to terminate the agreement if the company loses one or more of those relationships.

  • Application of local laws and convenient dispute resolution. When dealing with a foreign mobile content company, it is advisable to require that the agreement be governed by and enforced under the laws of your state and not the laws of a foreign country.

Moreover the agreement should also specify a convenient domestic location, such as your city or town, for the resolution of disputes.

  • Attorneys fees. An attorney's fees provision can also serve as a deterrent to copyright infringement if the licensed party knows that they might be required to pay for your attorneys fees in a dispute regarding their use of your content outside the scope of the rights you granted to them.

Finally, as all the information provided in this article is for educational purposes only and should not be relied upon as legal advice, before entering into any mobile content distribution agreement you should consult with a competent attorney experienced in the fields of adult entertainment, intellectual property and mobile content exploitation.

Gregory A. Piccionelli, Esq. is a senior member of Piccionelli & Sarno, one of the world's most experienced Internet and adult entertainment law firms. He can be reached at (310) 553-3375 or www.piccionellisarno.com.


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